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Press release from CNW Group

Augusta Closes Increased Red Kite Loan Facility

Friday, October 05, 2012

Augusta Closes Increased Red Kite Loan Facility17:00 EDT Friday, October 05, 2012DENVER, CO, Oct. 5, 2012 /CNW/ - Augusta Resource Corporation (TSX/NYSE MKT: AZC) ("Augusta" or "the Company") is pleased to announce the closing of the previously announced US$83,000,000 loan facility ("Expanded Loan") with RK Mine Finance Trust I ("Red Kite").  The Expanded Loan represents an increase of US$40,000,000 over the previous loan facility with Red Kite.As previously announced, the terms for the Expanded Loan include interest payable at LIBOR plus 4.50% and a final maturity date of July 21, 2014.  The 1,791,700 Red Kite share purchase warrants were split into two tranches, each with the new exercise price of US$3.85 per share.  The expiry date for 1,374,951 warrants was extended to July 22, 2015 and the expiry date for the remaining 416,749 warrants is unchanged at April 22, 2014.  Since not all of the warrants were extended, the origination fee on the additional loan amount of US$40,000,000 was increased from 2% to 2.2925%.Rosemont Copper Company ("Rosemont"), a wholly owned subsidiary of Augusta, has also closed the amended Red Kite Copper Concentrates Sales Agreement ("Amended Offtake Agreement") under which Red Kite will purchase 20% of Rosemont's gross annual copper concentrate production until 1,500,000 tonnes has been delivered.Concurrent with the closing of the Expanded Loan and Amended Offtake Agreement, the Copper Cathode Purchase and Sale Agreement between Rosemont and an affiliate of Red Kite and the US$10,000,000 working capital facility between Augusta and Red Kite were cancelled and deemed null, with no liability to any of the parties.ABOUT AUGUSTAAugusta is a base metals company focused on advancing the Rosemont Copper deposit near Tucson, Arizona. Rosemont hosts a large copper/molybdenum reserve that would account for about 10% of US copper output once in production (for details refer to www.augustaresource.com). The exceptional experience and strength of Augusta's management team, combined with the developed infrastructure and robust economics of the Rosemont project, propels Augusta to becoming a solid mid-tier copper producer. The Company trades on the Toronto Stock Exchange and the NYSE MKT under the symbol AZC.CAUTIONARY STATEMENTS REGARDING FORWARD LOOKING INFORMATIONCertain of the statements made and information contained herein may contain forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995 and forward-looking information within the meaning of applicable Canadian securities laws. Such forward-looking statements and forward-looking information include, but are not limited to statements concerning: expectations surrounding, short term financing, future project financings or refinancing; the Company's plans at the Rosemont Project including timing for final permits and construction; estimated production; and capital and operating and cash flow estimates. Forward-looking statements or information include statements regarding the expectations and beliefs of management. Often, but not always, forward-looking statements and forward-looking information can be identified by the use of words such as "plans", "expects", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", or "believes" or the negatives thereof or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved.Forward-looking statements or information are subject to a variety of risks and uncertainties which could cause actual events or results to differ from those reflected in the forward-looking statements or information, including, without limitation, risks and uncertainties relating to: history of losses; requirements for additional capital; dilution; loss of its material properties; interest rates increase; global economy; no history of production; speculative nature of exploration activities; periodic interruptions to exploration, development and mining activities; environmental hazards and liability; industrial accidents; failure of processing and mining equipment; labour disputes; supply problems; commodity price fluctuations; uncertainty of production and cost estimates; the interpretation of drill results and the estimation of mineral resources and reserves; legal and regulatory proceedings and community actions; title matters; regulatory restrictions; permitting and licensing; volatility of the market price of Common Shares; insurance; competition; hedging activities; currency fluctuations; loss of key employees; as well as those factors discussed in the section entitled "Risk Factors" in the Company's Annual Information Form dated March 19, 2012. Should one or more of these risks and uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in forward-looking statements or information. Accordingly, readers are advised not to place undue reliance on forward-looking statements or information. The Company disclaims any intent or obligation to update forward-looking statements or information except as required by law, and you are referred to the full discussion of the Company's business contained in the Company's reports filed with the securities regulatory authorities in Canada and the United States.SOURCE: Augusta Resource CorporationFor further information: Augusta Resource Corporation Letitia Cornacchia, Vice President, Investor Relations and Corporate Communications Tel: (416) 860 6310 Email: lcornacchia@augustaresource.com