Mr. Allen Lone reports

AUGUSTA PROVIDES SALES UPDATE, ENTERS INTO DEBT CONVERSION

Augusta Industries Inc.'s wholly owned subsidiary, Marcon International Inc., has been awarded contracts from various departments of the United States government for the supply of instrumentation and equipment. The aggregate value of the contracts awarded was $226,474 for the month of October. The current backlog of orders, including these new contracts, is $1,491,346 as of Oct. 31, 2016.

"The corporation's continuing success in securing new contracts with various entities of the United States government is proof of the efforts and hard work of the corporation's sales staff," stated Allen Lone, president of the corporation. "The awarding of these new contracts is proof of the success of the corporation's sales strategy that has resulted in increased sales and continued growth. While the corporation continues to build long-term strategic partnerships in the oil and gas industry and the pipeline space, it maintains a strategy to continue driving new sales and maintaining positive cash flow."

The corporation has negotiated a debt conversion agreement with an arm's-length creditor. Pursuant to the terms of the debt agreement, the corporation has agreed to issue an aggregate of two million units to the creditor in exchange for the cancellation of an aggregate of $100,000 in debt owning to the creditor.

The debt units are being issued at a deemed price of five cents per unit and each unit comprises one common share and one common share purchase warrant. Each debt warrant entitles the holder thereof to acquire one common share of the corporation at an exercise price of 10 cents per share at any time for a period of one year from date of issuance.

The issuance of the debt shares and debt warrants is subject to the approval of the TSX Venture Exchange.

We seek Safe Harbor.