Rosemont Copper Project Updated Feasibility Study Volume I NI 43-101 Technical Report Prepared for: AUGUSTA RESOURCE CORPORATION ARCHITECTURE ENGINEERING M3-PN08036 CONSTRUCTION MANAGEMENT January 2009 (Amended March 17, 2009) M3 Engineering & Technology Corporation 2440 W. Ruthrauff Road, Ste 170 Tucson, Arizona 85705 520-293-1488 NI 43-101 Technical Report For The Rosemont Copper Project Updated Feasibility Study Pima County, Arizona, USA Date: January 14, 2009 (Amended March 17, 2009) Prepared for: Augusta Resource Corporation 4500 Cherry Creek South Drive, Suite 1040 Denver, Colorado 80246 Prepared by: M3 Engineering & Technology Corporation 2440 W. Ruthrauff Drive, Suite 170 Tucson, Arizona 85705 Principal Author and Qualified Person: Dr. Conrad Huss, P.E. Other Contributors and Qualified Persons William L. Rose, P.E. – WLR Consulting, Inc. Robert Fong, P.E. – Moose Mountain Technical Services Thomas L. Drielick, P.E. – M3 Engineering & Technology Corporation John Ajie, P.E. – URS Washington Division M3-PN08036 January 14, 2009 (Amended March 17, 2009) AUGUSTA RESOURCE CORPORATION Rosemont Copper Project Updated Feasibility Study VOLUME I – EXECUTIVE SUMMARY (NI 43-101) 1 EXECUTIVE SUMMARY 1.1 TITLE PAGE 1.2 TABLE OF CONTENTS 1.3 SUMMARY .................................................................................................................................1 1.3.1 Property ......................................................................................................................1 1.3.2 Location......................................................................................................................1 1.3.3 Ownership...................................................................................................................2 1.3.4 Geology and Mineralization ......................................................................................2 1.3.5 Exploration and Sampling .........................................................................................2 1.3.6 Mineral Resource and Mineral Reserve Estimates...................................................3 1.3.7 Mining ........................................................................................................................7 1.3.8 Metallurgical Testing.................................................................................................8 1.3.9 Process Flowsheet......................................................................................................9 1.3.10 Extraction Rates.........................................................................................................9 1.3.11 Process Reagents......................................................................................................10 1.3.12 Power ........................................................................................................................10 1.3.13 Water.........................................................................................................................11 1.3.14 Permits ......................................................................................................................11 1.3.15 Operating Costs........................................................................................................11 1.3.16 Capital Cost Estimate...............................................................................................12 1.3.17 Financial Analysis....................................................................................................13 1.3.18 Author’s Conclusions...............................................................................................14 1.3.19 Author’s Recommendation......................................................................................14 1.4 INTRODUCTION AND TERMS OF REFERENCE.......................................................................14 1.4.1 Units and Abbreviations ..........................................................................................17 1.5 RELIANCE ON OTHER EXPERTS............................................................................................19 1.6 PROPERTY DESCRIPTION AND LOCATION ...........................................................................20 1.6.1 Location....................................................................................................................20 1.6.2 Land Tenure.............................................................................................................20 1.7 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY......................................................................................................................22 1.7.1 Accessibility .............................................................................................................22 1.7.2 Climate......................................................................................................................22 1.7.3 Local Resources.......................................................................................................22 1.7.4 Infrastructure ............................................................................................................23 1.7.5 Physiography............................................................................................................23 1.8 HISTORY .................................................................................................................................23 1.9 GEOLOGICAL SETTING..........................................................................................................26 1.10 DEPOSIT TYPES ......................................................................................................................27 1.11 MINERALIZATION ..................................................................................................................27 1.12 EXPLORATION ........................................................................................................................28 1.13 DRILLING................................................................................................................................29 1.13.1 Banner Mining Company Drilling...........................................................................30 M3-PN08036 January 14, 2009 i AUGUSTA RESOURCE CORPORATION Rosemont Copper Project Updated Feasibility Study 1.13.2 The Anaconda Company Drilling ...........................................................................30 1.13.3 ASARCO Mining Company Drilling......................................................................31 1.13.4 Augusta Drilling.......................................................................................................31 1.14 SAMPLING METHOD AND APPROACH...................................................................................32 1.14.1 Banner, Anaconda and Anamax Sampling .............................................................32 1.14.2 ASARCO Sampling.................................................................................................33 1.14.3 Augusta Sampling ....................................................................................................33 1.15 SAMPLE PREPARATION, ANALYSIS AND SECURITY.............................................................36 1.15.1 Sample Handling and Security ................................................................................36 1.15.2 Banner, Anaconda and Anamax Sample Preparation and Analysis ......................37 1.15.3 ASARCO Sample Preparation and Analysis ..........................................................37 1.15.4 Augusta Sample Preparation and Analysis .............................................................38 1.15.5 Quality Assurance and Quality Control Protocol ...................................................39 1.16 DATA VERIFICATION .............................................................................................................43 1.17 ADJACENT PROPERTIES ........................................................................................................44 1.18 MINERAL PROCESSING AND METALLURGICAL TESTING ...................................................45 1.18.1 Metallurgical Testing...............................................................................................45 1.18.2 Mineral Processing...................................................................................................48 1.19 MINERAL RESOURCE AND MINERAL RESERVE ESTIMATES ..............................................50 1.19.1 Model Extents...........................................................................................................51 1.19.2 Surface Topography.................................................................................................51 1.19.3 Drill Hole Database..................................................................................................51 1.19.4 Geologic Model........................................................................................................53 1.19.5 Mineralization Controls...........................................................................................54 1.19.6 Compositing of Drill Hole Data and Statistics........................................................54 1.19.7 Variography..............................................................................................................54 1.19.8 Block Grade Interpolations......................................................................................55