Frontera Copper Updates 2007 Production Guidance,
Reports an Increase in Ore Reserves and the
Appointment of a New Director
(All dollar amounts are
expressed in United States currency unless otherwise noted.)
Toronto, ON - January 15, 2008 - Frontera Copper Corporation (FCC:
TSX, FCC.NT, FCC.NT.A: TSX) today reported updated 2007 production guidance,
an increase in ore reserves that will add approximately two years to the
projected life of the Piedras Verdes operations and the appointment of a new
Director.
Production Guidance
For the year ended December 31, 2007, the Piedras Verdes operations produced
53.7 million pounds of "LME Grade A" quality copper cathode and
sold 54.1 million pounds of copper cathode compared to our previously
announced guidance of approximately 57 million pounds of copper cathode
production for 2007. The lower production is primarily the result of the continuing
strike that commenced in July, 2007 at the Company's major supplier of
sulfuric acid, which has limited the operation to receiving only 75% to 80%
of its normal acid requirements. Preliminary unaudited average cash costs per
pound for 2007, including prepaid royalties, are approximately $1.30 per
pound. During the fourth quarter of 2007, the Piedras Verdes operations
produced 12.3 million pounds of copper cathode and sold 12.6 million pounds
of copper cathode. Preliminary, unaudited average cash costs per pound for
the fourth quarter of 2007, including prepaid royalties, are approximately
$1.47 per pound and reflect the lower production levels and the higher costs
for acid that is currently being purchased from alternate sources.
Frontera Copper continues to focus on achieving and maintaining its annual
production rate of 70 million pounds of copper cathode. However, the strike
at the Company's major sulfuric acid supplier, which started in July 2007,
has continued much longer than previously expected. The Company has been
supplementing the acid shortfall to the extent economically practical by
obtaining additional supplies of sulfuric acid from other sources, but it has
not been able to acquire sufficient acid on a regular basis and at an
acceptable cost to appropriately acidify the ore that has been placed on the
leach pads. As a result, the rate of recovery of copper in the leach pad is
slower than planned. The Company is continuing to look for additional sources
of acid while it monitors the strike at its major acid supplier.
The Company's preliminary unaudited cash balance as at December 31, 2007 was
approximately $54 million. The Company will report its full 2007 financial
and operating results when it releases its 2007 fourth quarter earnings in
mid-March.
Ore Reserves
At January 1, 2008, based on a long term copper price of $1.65 per pound, ore
reserves at the Piedras Verdes property were as follows:
|
|
Ore
Tonnes (000)
|
Total
Cu Grade %
|
Contained
Cu Tonnes (000)
|
Contained
Cu Pounds (millions)
|
|
Proven
|
158,063
|
0.36
|
564
|
1,244
|
|
Probable
|
35,576
|
0.40
|
141
|
311
|
|
Proven and Probable (1)
|
193,639
|
0.36
|
705
|
1,555
|
(1) Excludes
ore already placed on the leach pads, which based on actual copper production
to date and an estimated average final recovery of 62.5%, contained an
estimated 71.8 million pounds of recoverable copper as at December 31, 2007.
This reserve update has been calculated in accordance with the requirements
of Canadian National Instrument 43-101 and was confirmed by Mr. Herb
Welhener, Independent Mining Consultants, QP Member, MMSA, Tucson, Arizona,
and Mr. Tim J. Swendseid, P. Engr., Vice President of Engineering, Frontera
Copper Corporation. Mr. Swendseid and Mr. Welhener are Qualified Persons as
defined by NI 43-101.
The new ore reserve represents a net increase of 13.1 million tonnes over the
ore reserves reported as of January 1, 2007. During 2007, mining activities
reduced ore reserves by 20.4 million tonnes, and a re-evaluation of the pit
economics, particularly in the east end of the Piedras Verdes deposit,
increased ore reserves by 33.5 million tonnes. The increase is primarily due
to the higher copper price assumption, which has allowed the incorporation of
reserves previously excluded from the mine plan due to the higher stripping
ratio associated with this material. The additional ore reserves are expected
to add an additional two years to the life of the Piedras Verdes operations. Existing resources and
prospective exploration targets adjacent to the main open-pit have the
potential to further extend the life of the project.
Alan Edwards, President and Chief Executive Officer said, "While our
operations have been significantly affected by the acid shortage, once we are
able to obtain our full acid requirements on a consistent basis, I am
confident that we will get to our full annual production capacity of 70
million pounds of copper. The recent reserve expansion should add another two
years to the economic life of the operation."
New Director Appointment
The Company is pleased to announce the appointment of Mr. Wolf K. Seidler to
Frontera's board of directors effective January 1, 2008. Mr. Seidler is
replacing Mr. Wayne Beach, who retired from the board on January 1, 2008. Mr.
Seidler is a mining engineer with over 35 years of Canadian and international
mining experience. His employment history includes positions with Normandy
LaSource SAS, Williams Resources Inc., Inmet Mining Corp., J.S. Redpath Ltd.,
Teck Corporation and Gold Fields Mining Corp.
"We are very pleased to have Wolf Seidler join our Board of Directors.
Wolf is a seasoned mining industry professional who brings a tremendous amount
of relevant experience to our organization", said Mr. Edwards. "I
would also like to thank Wayne Beach, who was one of our founding directors,
for his valuable guidance through the development and commencement of
operations at Piedras Verdes."
About Frontera Copper
Frontera Copper is a Canadian mining, development and exploration company
whose principal activity is the production of copper cathode from the Piedras
Verdes run-of-mine heap-leach copper operation in Sonora, Mexico. Based on
the January 1, 2008 ore reserves and the estimated recoverable copper
contained on the leach pads at December 31, 2007, approximately 1 billion
pounds of copper is projected to be produced over the remaining 17-year life
of the operation.
For further information, please see Frontera Copper's website at
www.fronteracopper.com or contact:
Dave Peat
Vice President and Chief Financial Officer
Tel.: 602 424-5484
Email: dave.peat@fronteracopper.com
Information in this news release that
is not current or historical factual information may constitute
forward-looking information or statements within the meaning of applicable
securities laws. Implicit in this information, particularly in respect of
statements as to future operating results and economic performance of the Company,
and resources and reserves at the Piedras Verdes operations, are assumptions
regarding projected revenue and expense, copper prices and mining costs.
These assumptions, although considered reasonable by the Company at the time
of preparation, may prove to be incorrect. Readers are cautioned that actual
results are subject to a number of risks and uncertainties, including risks
relating to general economic conditions and mining operations, and could
differ materially from what is currently expected. The Company disclaims any
intention or obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise.
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