Mr. Allen Lone reports

AUGUSTA ANNOUNCES PRIVATE PLACEMENT OF CONVERTIBLE DEBENTURE

Augusta Industries Inc. has agreed to the issuance of up to $1-million principal amount Series B 10-per-cent convertible senior debentures pursuant to a non-brokered private placement.

The debentures shall have the following features:

• Convertible into units in the capital of the corporation at a conversion price of 15 cents per unit;
• Units comprise one fully paid and non-assessable common share and one common share purchase warrant. Each warrant entitles the holder thereof to obtain one common share in the capital of the corporation at an exercise price of 25 cents per share for a period of 24 months from date of conversion;
• Have a term of 36 months;
• Annual interest rate of 10 per cent, which shall be payable quarterly.

The issuance of the debentures is conditional upon the corporation receiving the approval of the TSX Venture Exchange. Proceeds from the private placement will be used for general working capital.

We seek Safe Harbor.