Mr. Allen Lone reports

AUGUSTA SELLS LEAK DETECTION SYSTEM TO ONE OF NORTH AMERICA'S LARGEST PIPELINE COMPANIES AND PROVIDES UPDATE ON THE PROPOSED SALE OF FOX-TEK

Augusta Industries Inc.'s wholly owned subsidiary, Fox-Tek Canada Inc., has received a contract for a complete leak detection system to monitor pipelines and tanks carrying petroleum products from one of North America's largest pipeline companies. The customer is an existing client of the corporation.

The leak detection system is based on an innovative fully passive, multisection sensor cable FLD-HSC and is suitable for detecting non-conductive hydrocarbon fluids such as propane, butane, gasoline, jet fuel and diesel oil. The FLD-HSC sensor cable allows detection of very small quantities of fluid in physical contact with the sensor. The contract covers materials, labour, equipment, and installation of hardware and sensing cables for the tank header at the customer's tank terminal to monitor five separate locations in close proximity. The system will be connected to the existing PLC infrastructure.

The customer's decision to acquire the leak detection system was based on successful performance testing as well as the low cost of the technology as compared with other currently available technologies.

"This is yet another milestone in Fox-Tek becoming a leader in the smart sensing technology field," said Allen Lone, the president of the corporation. "The corporation is encouraged by this second contract for our novel leak detection system. The corporation will continue to develop new technologies to address the needs of our clients."

Update on proposed sale of Fox-Tek

The corporation would also like to provide an update with respect to its proposed transaction with Mooncor Oil & Gas Corp., whereby Mooncor will acquire all of the issued and outstanding securities of Fox-Tek for an aggregate purchase price of up to $21.5-million. For complete details on the proposed transactions, please refer to the corporation's press release dated May 28, 2018.

In its press release of May 28, 2018, and in its information circular dated June 11, 2018, which was mailed to shareholders in connection with the coming shareholder meeting to be held on July 11, 2018, the corporation mistakenly stated that the transaction was subject to Multilateral Instrument 61-101, Protection of Minority Security Holders in Special Transactions, and, as such, the corporation was to obtain disinterested shareholder approval for the transaction at the meeting pursuant to the requirements of MI 61-101.

The corporation initially determined that the transaction was subject to MI 61-101 on the basis that Mr. Lone is a director and officer of both the corporation and Mooncor, and Mr. Lone owns, directly and indirectly, 6.92 million common shares (4.13 per cent) in the capital of Mooncor and 76,754,264 common shares (29.97 per cent) in the capital of the corporation. However, Mooncor and the corporation are not related parties for purposes of MI 61-101 and, as such, the transaction is not a related party transaction within the meaning of MI 61-101. Mr. Lone will not be receiving any consideration pursuant to the transaction.

Despite the fact that the transaction is not a related party transaction within the meaning of MI 61-101, the corporation will voluntarily obtain disinterested shareholder approval at its shareholder meeting, excluding the shares held by Mr. Lone.

In addition to approving the transaction at the meeting, shareholders will be asked to approve the following matters:

1. The election of directors;
2. The appointment of Wasserman Ramsay, chartered accountants, as auditor of the corporation;
3. The confirmation of the corporation's stock option plan (which requires the approval of the majority of votes cast at the meeting);
4. Changing the name of the corporation to IntellaEquity Inc. (which requires the approval of 66-2/3rds per cent of votes cast at the meeting);
5. Changing the business of the corporation from an industrial issuer to an investment issuer (which requires the approval of the majority of votes cast at the meeting);
6. The delisting of the corporation's common shares from the TSX Venture Exchange and the listing of the common shares on the Canadian Securities Exchange (which requires the approval of the majority of the minority votes cast at the meeting);
7. The consolidation of the corporation's common shares on the basis of one postconsolidated common share for every 20 preconsolidated common shares (which requires the approval of 66-2/3rds of votes cast at the meeting).

In the event that the shareholders do not approve the transaction, the corporation will still be seeking shareholder approval for the name change, change of business and delisting.

About Augusta Industries Inc.

Through its wholly owned subsidiaries, Marcon International Inc., Paragon Blockchain Inc. and Fox-Tek, the corporation provides a variety of services and products to a number of clients.

Marcon is an industrial supply contractor servicing the energy sector and a number of U.S. government entities. Marcon's principal business is the sale and distribution of industrial parts and equipment (electrical, mechanical and instrumentation).

Fox-Tek develops non-intrusive asset health monitoring sensor systems for the oil and gas market to help operators track the thinning of pipelines and refinery vessels due to corrosion/erosion, strain due to bending/buckling, and process pressure and temperature.

We seek Safe Harbor.