Securities Law & Instruments

Headnote

MutualReliance Review System for Exemptive Relief Applications - Reliefgranted from the requirement in National Instrument 43-101 tohave a qualified person inspect a property that is the subjectof a technical report - access to the property is not possibledue to seasonal lack of daylight.

ApplicableOntario Provisions

NationalInstrument 43-101 Standards of Disclosure for Mineral Projects,ss. 6.2 and 9.1

INTHE MATTER OF

THESECURITIES LEGISLATION OF

BRITISHCOLUMBIA, ALBERTA AND ONTARIO


AND


INTHE MATTER OF

THEMUTUAL RELIANCE REVIEW SYSTEM

FOREXEMPTIVE RELIEF APPLICATIONS


AND


INTHE MATTER OF

AUGUSTARESOURCE CORPORATION

MRRSDECISION DOCUMENT

WHEREASthe local securities regulatory authority or regulator (the"Decision Maker") in each of British Columbia, Alberta and Ontario(the "Jurisdictions") has received an application from AugustaResource Corporation (the "Filer") for a decision under thesecurities legislation of the Jurisdictions (the "Legislation")that the requirement contained in the Legislation that at leastone qualified person preparing or supervising the preparationof a technical report inspect the property that is the subjectof the technical report (the "Personal Inspection Requirement")will not apply to the Filer in respect of technical reportsto be prepared in connection with the Filer's public offeringof securities;

ANDWHEREAS under the Mutual Reliance Review System for ExemptiveRelief Applications (the "System") the British Columbia SecuritiesCommission is the principal regulator for this application;

ANDWHEREAS the Filer has represented to the Decision Makersthat:

1.the Filer is a corporation governed by the Canada Business CorporationsAct with its head office located in British Columbia;

2.the Filer is a reporting issuer under the Legislation of eachJurisdiction and is not in default of any requirements of theLegislation;

3.the authorized capital of the Filer consists of 100,000,000 commonshares without par value, of which 13,198,437 common shares wereoutstanding as at December 21, 2001;

4.the Filer's common shares are listed on the Canadian Venture Exchange,Inc. (the "CDNX");

5.the Filer has entered into an option agreement dated January 4,2002 (the "BH Agreement") with 4763 NWT Ltd. to acquire a 70%interest in the BH property (the "BH Property") located in theBear Province of the Slave Craton region of Nunavut;

6.the Filer has also entered into eight separate option agreementsdated January 15, 2002 (collectively the "Eight Properties Agreements")with 4763 NWT Ltd. to acquire a 20% working interest in the ALS-1,ALS-3, GT, TH, VT, JR and HK properties (the "Eight Properties"),located in the Bear Province of the Slave Craton region of Nunavut;

7.the BH Property and the Eight Properties will be material propertiesof the Filer;

8.the BH Property and the Eight Properties have not had any explorationwork performed on them and no resource has been defined to date;

9.the Filer is having a technical report (the "BH Report") preparedrelating to the BH Property and a technical report (the "EightProperties Report") prepared relating to the Eight Propertiesand has retained Robert F. Brown, a qualified person as definedin National Instrument 43-101 Standards of Disclosure for MineralProjects ("NI 43-101"), to prepare the BH Report and Eight PropertiesReport;

10.the only access to the BH Property and the Eight Properties isby fixed wing aircraft or helicopter; due to the seasonal lackof daylight since the Filer acquired the options on the BH Propertyand Eight Properties, air transportation to the properties isnot possible so the qualified person is unable to complete a personalinspection of the BH Property and Eight Properties;

11.the Filer intends to make an offering (the "Offering") of itssecurities to the public in British Columbia through the facilitiesof the CDNX under a short form offering document (the "OfferingDocument");

12.the Offering Document will describe the mineral project on theBH Property and the Eight Properties based on the informationcontained in the BH Report and the Eight Properties Report; and

13.the Filer intends to use a portion of the proceeds from the Offeringto perform work on the BH Property and the Eight Properties asrequired to exercise the options under the BH Agreement and theEight Properties Agreements;

ANDWHEREAS under the System, this MRRS Decision Documentevidences the decision of each Decision Maker (collectively, the"Decision");

ANDWHEREAS each of the Decision Makers is satisfied thatthe test contained in the Legislation that provides the DecisionMaker with the jurisdiction to make the Decision has been met;

THEDECISION of the Decision Makers under the Legislationis that the Filer is exempt from the Personal Inspection Requirementin respect of the BH Report and Eight Properties Report for usein connection with the Offering provided that the Offering Document,the BH Report and the Eight Properties Report include a statementthat a personal inspection has not been conducted by the qualifiedperson, as defined in NI 43-101, and the reasons why a personalinspection was not conducted.

February11, 2002.

"BrendaLeong"