Augusta buys Rosemont deposit

Vancouver — Augusta Resource (ARS-V) has acquired the Rosemont copper-molybdenum project in Pima Cty., Ariz.

The purchase price is US$20.8 million, to be paid over three years, and a 3% net smelter return royalty applied.

Rosemont consists of three copper-moly skarn deposits, namely Rosemont, Peach Elgin and Broadtop Butte. These are close to several large copper mines operated by Phelps Dodge (pd-n) and Grupo Mexico (gmbxf-q).

Prior to the implementation of National Instrument 43-101, the three deposits that comprise Rosemont were found to contain the following resources:

– Rosemont — 340.5 million tonnes grading 0.64% copper and 0.02% moly in the sulphide portion, and 28 million tonnes of 0.46% copper in the oxide zone.

– Peach Elgin — 13.7 million tonnes grading 0.78% copper in the sulphide zone, and 9.7 million tonnes of 0.72% copper in the oxide.

– Broadtop Butte — 8.8 million tonnes grading 0.77% copper and 0.04% moly.

Augusta intends to carry out prefeasibility work and infill drilling.

To help finance the initial, US$6.7-million tranche of the acquisition, Augusta recently closed a $6-million convertible debt instrument with a 1-year term. The debt instrument bears 9% interest and is convertible into 2.2 million shares at $2.75 apiece.

In recent months, the company has acquired several advanced-stage precious and base metals projects in Nevada, New Mexico and Arizona.

With 23.6 million shares outstanding, Augusta has a market capitalization of $72 million. The stock recently traded at $3.05.