WATER

The Rosemont design avoids impacts to the Davidson Canyon and Cienega Creek watershed. Central Arizona Project water (CAP) is already being purchased and stored in advance. Rosemont will import available CAP water and has plans to recharge more than it will use, leaving a net water gain in the community. By the end of 2007, a supply of water will have been stored sufficient to sustain the operation for three years. In addition, new water conservation and recycling techniques at Rosemont will save 50%-60% of the total water used in traditional mining.

Historically, mining companies that had evaluated development of the rich ore deposits in the Rosemont area had planned to develop the associated water supply for mining operations from groundwater aquifers to the east of the mine site within the Cienega Creek groundwater basin. Because of the environmental sensitivity of Cienega Creek, Augusta determined at the beginning of its planning process to instead acquire the Project mining water supply from the Tucson Active Management Area (AMA) groundwater basin to the west of the project site.

This water supply decision, though quite expensive to implement, allows Augusta to achieve important water management goals in addition to meeting the mining operational requirements. Using water from the Tucson AMA eliminates the water supply impact of the Rosemont operations on the sensitive Cienega Creek drainage. It also allows Augusta to purchase and recharge water from the Central Arizona Project (CAP) aqueduct, which reaches the Tucson AMA basin but not the Cienega Creek basin. Purchasing and recharging CAP water allows Augusta to replace more than its entire consumption of Tucson AMA water with renewable Colorado River supplies, thereby creating a net positive impact by the Project on the groundwater resources of the region.

Augusta has no legal obligation to replace any of the water it will produce for the operation of the Rosemont mine. No other mining operation in the region has previously done so. However, Augusta has made a commitment to the local community to recharge 105% of the total mine water production within the Tucson AMA basin, as close to the water production site as is feasible. The total life-of-mine usage is currently estimated to be 100,000 acre feet, resulting in a recharge commitment of 105,000 acre-ft.

In addition to the commitment to offset 105% of total project pumping with recharge in the Tucson AMA basin, Augusta also plans to utilize state-of-the-art water conserving technologies in the Rosemont operation, and to always have its cumulative recharge volume be larger than its cumulative pumping quantity. To this end, Augusta has begun its recharge program in 2007, with contracts in place to recharge 15,000 acre-ft (approximately 3 years of planned mine usage) of Colorado River Water into the Tucson AMA basin in calendar year 2007. As of July 2007, two years of water supply have already been stored.

Augusta Resource, developer of Rosemont Copper, has signed a letter of intent with the Community Water Company of Green Valley to fund a CAP extension that could be delivering water to the Green Valley/Sahuarita area in as little as two years. The water delivery system plan includes a seven-mile extension of the CAP pipeline into the Water Company's service area and a water recharge facility in the Green Valley/Sahuarita area. The plan would enable Community Water to construct a water delivery system and bring much-needed recharge of CAP water into its service area many years sooner than would have otherwise been possible. Community Water will also make its unused CAP water allocation available to Augusta Resource for recharge in the Green Valley/Sahuarita area.

AIR QUALITY

The Project will require either a Class I or Class II air quality permit, depending upon the potential and magnitude of emissions from point sources. Key elements of the air quality permit process are the development of an emission inventory and demonstration of protection of all applicable federal, state, and local air quality related standards and guidelines. Augusta has initiated a monitoring program in anticipation of the air quality permit application submittal. The Project will require engineering and physical controls to manage dust. The engineering controls will play an important role as good design and proper implementation will provide the primary control mechanism for dust. The physical controls will provide an additional protection and ensure that dust is managed in accordance with regulatory requirements.

TRAFFIC

Access to the property will be via two routes: the primary access route from the east, and a secondary access route from the west. The primary access road to the property will extend approximately 3.7 miles from State Highway SR-83 at a point between mile markers 46 and 47 and end at the main guard building at the entrance to the plant. There is no rail service into the plant and all materials arriving and leaving will be transported by truck.

The intersection of the access road with State Highway SR-83 will be at a point that provides clear line of sight for up to 2,500 ft in each direction. State Highway 83 will be modified to provide safe ingress and egress from the access road.

A secondary access road will be located to the west over the ridge of the Santa Rita Mountains, connecting to Santa Rita Road at Helvetia Road. This west access road is considered a secondary access for plant maintenance employees to reach the fresh water pump stations, associated water pipeline and for utility companies to reach the electrical transmission line.

POWER

The available electrical power supply for the Rosemont mine and process facilities falls within the Tucson Electric Power (TEP) and the TRICO service territories. Geographically, the area east of the Rosemont pit (which includes part of the mine and all the process facilities), falls in the TEP service territory. The area west of the Rosemont pit (including the balance of the mine and the fresh water pumping system) falls in the TRICO service territory. Because most of the mine's estimated electrical load and power requirements fall within TEP's service territory area, TEP will be the main electric utility service provider for the entire facility, including the fresh water system.

In addition to traditional electrical service from commercial providers, the Rosemont Project will also generate energy onsite using solar technologies. By using significant available surface area on facility roofs for the installation of solar systems (approximately 300,000 sf), Rosemont will be able to enhance the overall energy efficiency of the operation.

LIGHTING

Rosemont Copper is located in Pima County where certain types of activities fall under building, construction and operations requirements. On August 21, 2000, Pima County, along with the Town of Marana and the City of Tucson, adopted Final Ordinance No. 2001-138: The Outdoor Lighting Code (OLC).The purpose and intent of the OLC is to preserve the unique desert environment and night sky by controlling the obtrusive aspects of excessive and careless outdoor lighting usage.

Rosemont Copper is located in two of the most restrictive lighting areas, defined by the OLC as E1a and E1b. Areas in E1a are around astronomical observatories and include all areas within 15 miles of the summit of Kitt Peak and 12.5 miles of the summit of Mount Hopkins. They also include those areas within any national park, monument or forest boundary. In these areas, the preservation of a naturally dark environment, both in the sky and visible landscape, is of paramount concern.

Mining operations of more than five acres are exempt from Pima County zoning ordinances under ARS 11-830. Therefore, compliance with the OLC is technically not required for the Project. However, Rosemont Copper has voluntarily elected to comply with the requirements of the OLC during the projected life of the Project, including the design, construction and daily operation phases.

RECLAMATION

The University of Arizona’s School of Natural Resources is using a $280,000 grant from Rosemont Copper to fund a five year-long research project evaluating native plants and soil used for large scale reclamation efforts. The target of the Rosemont mine reclamation effort is to reclaim the land’s capacity for productive use, prevent soil loss and return the site to a higher functioning plant community. The Rosemont site is currently in less than ideal condition with substantial cover of juniper and mesquite, recreation-related damage, and many old mine sites. Last April, Dr. Jeffrey Fehmi, assistant professor in the School of Natural Resources, and his team carefully chose 29 native plant species for greenhouse testing under a range of controlled environmental variables. The plants are being grown in three types of soil from the proposed mine site, with several soil amendments and fertilizer combinations, and watered to simulate low, average and high rainfall years. The goal of the team is to determine what combination of plants and soils will reclaim land most effectively. The first phase of greenhouse test results is expected by July, with additional onsite test plots scheduled for late summer 2008. The 10 to15-acre onsite plots are a necessary tool in verifying the greenhouse findings, which will run concurrently for two years.

Reclamation will begin within the first year of mine operation.

The Project was designed from its inception to facilitate state-of-the-art reclamation practices, including greenhouse studies to determine optimum plant species for re-vegetation, utilization of cattle to prepare the seedbed for re-vegetation and the construction of perimeter buttresses to stabilize soils and enhance re-vegetation. In addition to employing reclamation practices from the beginning of mining activities, construction of the tailings and waste rock storage facilities will be designed and built to facilitate closure. Significant planning has gone into the staging of facility construction as well as the facility design itself in order to minimize the footprint of the mine. In addition to limiting facility placement to a single drainage, visual impacts of the site, both during operations and at closure, were also considered in the mine's overall design. As much as practicable, perimeter buttresses are staged around the facility footprint to minimize the visual impact of both construction and operation from SR-83. Only a small portion of the final pit configuration will be visible from the highway.