DENVER, CO, Aug. 14, 2012 /PRNewswire/ - Augusta Resource Corporation (TSX/NYSE MKT: AZC) ("Augusta" or "the Company") is pleased to announce that the Company and RK Mine Finance Trust I ("Red Kite") have signed a term sheet for a US$40,000,000 increase ("Additional Loan") to the existing US$43,000,000Red Kite loan ("Existing Loan"), on terms substantially similar to the Existing Loan. The Additional Loan and the Existing Loan, together totalling US$83,000,000, are referred to as the Expanded Loan. The terms for the Expanded Loan include interest payable at LIBOR plus 4.50% and an origination fee of 2% of the Additional Loan. The Expanded Loan is substantially similar to the Existing Loan except that the final maturity date has been extended by 15 months to July 21, 2014. In connection with Red Kite's granting of the Expanded Loan, Augusta will extend the expiry of the existing 1,791,700 share purchase warrants held by Red Kite from April 22, 2014 to July 22, 2015.Augusta and Red Kite have also agreed to change the exercise price of the warrants from C$3.90 per share to US$3.85 per share. In addition, Rosemont Copper Company ("Rosemont"), a wholly owned subsidiary of Augusta, has executed a term sheet to amend the existing Red Kite Copper Concentrates Sales Agreement ("Amended Offtake Agreement"). Under the Amended Offtake Agreement, Red Kite will purchase 20% of gross annual production until 1,500,000 tonnes has been delivered. This compares to the existing offtake agreement under which Red Kite would purchase 16.125% of gross annual production with a cumulative limit of 483,750 tonnes. Upon closing of the Expanded Loan and the 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 will both be cancelled and deemed void. Gil Clausen, Augusta's President and CEO comments, " Red Kite is a strong advocate of the Rosemont Copper Project and we appreciate their continued support. This Expanded Loan provides us with the funding needed to continue development of Rosemont through to the start of construction, expected in early 2013, and fits our financing objective of minimal equity dilution. Our entire focus can now be placed on finalizing the project debt financing and completing the permitting process." Closing of the Expanded Loan agreement is subject to customary due diligence for these types of loan transactions, all regulatory approvals, final legal documentation, and Board approvals.