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Frontera Copper Corporation
TORONTO FCC.TO 0,74 CA$ 60,87%
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Reports Annual and Fourth Quarter 2007 Results

Publié le 20 mars 2008

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News Release

Thursday, March 20, 2008

Frontera Copper Reports Annual and Fourth Quarter 2007 Results

(All dollar amounts are expressed in United States currency unless otherwise noted)

View News Release in PDF Format


Toronto, ON - March 20, 2008 - Frontera Copper Corporation (FCC: TSX, FCC.NT, FCC. NT.A: TSX) today reports financial and operating results for the year and quarter ended December 31, 2007.

2007 Highlights

  • Cash flow from operating activities of $55.7 million
  • Cash and cash equivalents increased by $20.9 million to $54.5 million
  • Earnings of $31.8 million
  • Copper cathode production of 53.7 million pounds
  • Copper cathode sales of 54.1 million pounds
  • Average cash cost per pound of $1.30
  • C$8.9 million paid to repurchase outstanding notes payable
  • Phase II Construction project completed and Phase III leach pad construction initiated
  • One million man hours without a time lost accident

Alan Edwards, President and Chief Executive Officer, said, "2007 was our first full year of operations at Piedras Verdes and I am pleased to say that we produced and sold approximately 54 million pounds of "LME Grade A" quality copper cathode at an average cash cost of $1.30 per pound.

 
Financial Results
(millions of dollars, except per share)
??????????????????????????? 2007 Quarters????????????????????? Years
????????????????? Dec?????? Sept????? June???? March????? 2007????? 2006
??????????????? --------? --------- --------- --------? --------- --------
Revenues (1)??????? 37.5?????? 50.1????? 50.8???? 29.0????? 167.4???? 24.6
Net earnings???????? 6.7?????? 10.3?????? 9.8????? 5.0?????? 31.8???? (2.6)
Net earnings
 per share -
 basic????????????? 0.11?????? 0.16????? 0.15???? 0.08?????? 0.50??? (0.05)
Cash flows from
 operating
 activities???????? (3.1)????? 23.6????? 36.3???? (1.1)????? 55.7??? (12.1)
Closing cash
 balances?????????? 54.5?????? 58.8????? 48.7???? 24.4 ??????54.5???? 33.5
??????????????? --------? --------- --------- --------? --------- --------
(1) The Piedras Verdes operations commenced production in October 2006.

Capital expenditures for property, plant and equipment totaled $29.8 million for the 2007 year and $1.3 million in the fourth quarter of 2007, compared to $83.2 million for the 2006 year and $10.2 million in the fourth quarter of 2006.

 
Results from Operations
???????????????????????????????????????????? 2007 Quarters?????????? Year
???????? ?????????????????????????????Dec??? Sept??? June??? March?? 2007
??????????????????????????????????? ------- ------- ------- ------- -------
"LME Grade A" quality
 copper
 cathode (millions of lbs.):
? Produced???????????????????????????? 12.3??? 15.1??? 15.9??? 10.4??? 53.7
? Sold???????????????????????????????? 12.6??? 15.7??? 15.7??? 10.1??? 54.1
Cash costs per pound sold ($):
? (Excluding prepaid royalties)??????? 1.39??? 1.13??? 1.10??? 1.37??? 1.22
? (Including prepaid royalties)??????? 1.46??? 1.21 ???1.18??? 1.43??? 1.30
Revenue ($ millions)?????????????????? 37.5??? 50.1??? 50.8??? 29.0?? 167.4
Average price per pound:
? Realized ($)???????????????????????? 2.97??? 3.20??? 3.23??? 2.87??? 3.09
? COMEX ($)??????????????????????????? 3.26??? 3.48??? 3.46??? 2.70??? 3.23
??????????????????????????????????? ------- ------- ------- ------- -------


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. Average cash costs per pound for 2007, including prepaid royalties, were $1.30. 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. The lower production is primarily the result of the continuing strike at the Company's major supplier of sulfuric acid, which limited the operation to receiving only 75% to 80% of its normal acid requirements during the fourth quarter of 2007. Average cash costs per pound for the fourth quarter of 2007, including prepaid royalties, were $1.46. The higher than planned unit operating costs reflect the lower production levels and the higher cost of acid that was purchased from alternate sources.

Cash and cash equivalents were $54.5 million at December 31, 2007. During the year ended December 31, 2007, cash and cash equivalents increased by $20.9 million and during the fourth quarter of 2007, cash and cash equivalents decreased by $4.4 million. During the year and quarter ended December 31, 2006 cash and cash equivalents decreased by $1.3 million and increased by $26.6 million, respectively.

For the year ended December 31, 2007, cash flows from operating activities were $55.7 million compared to a negative $12.1 million for the year ended December 31, 2006.

The Company will continue to evaluate its operating plans in light of the availability of reasonably priced acid. At current copper prices, the Company's current operating plan indicates positive earnings and cash flows for 2008. This plan is predicated on receiving sufficient acid at acceptable prices to enable the operation to achieve full production.

The Company's December 31, 2007 Financial Statements and Management's Discussion and Analysis have been filed on SEDAR and are available on the Company's website.

On February 25, 2008, Frontera Copper provided an update on operations. The Company will provide a further operations update following completion of the 2008 first quarter. The Company also plans to hold a conference call after it releases its 2008 first quarter results in mid-May.

The Company will be filing an updated Technical Report and its 2007 Annual Information Form on SEDAR later this month.

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:

Alan Edwards
President and Chief Executive Officer
Tel.: 602-424-5488
Toll-free: 888-323-0973
Email: alan.edwards@fronteracopper.com

Dave Peat
Vice President and Chief Financial Officer
Tel.: 602-424-5484
Toll-free: 888-323-0973
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.

 
Frontera Copper Corporation
Consolidated Balance Sheet
US$ (in thousands)
????????????????????????????????????????????????? December 31, December 31,
????????????????????????????????????????????????????? 2007???????? 2006
?????????????????????????????????????????????????? ----------?? ----------
????????????????????? Assets
Current
???? Cash and cash equivalents???????????????????????? 54,479?????? 33,547
???? Restricted cash??????????????????????????????????????? -??? ????1,233
???? Accounts receivable????????????????????????????????? 705??????? 1,645
???? Commodity taxes recoverable??????????????????????? 4,181??????? 5,817
???? Inventory???????????????????????????????????????? 24,918?????? 19,511
???? Prepaid expenses and deposits????????????????????? 6,440??????? 5,741
???? Future tax asset?????????????????????????????????? 2,883??????????? -
?????????????????????????????????????????????????? ----------?? ----------
??????????????????????????????????????????????????? ???93,606?????? 67,494
Restricted cash???????????????????????????????????????? 1,825??????? 1,825
Long-term inventory??????????????????????????????????? 20,912????????? 813
Long-term deposits????????????????????????????????????? 1,854??????????? -
Deferred finance charges??????????????????????????????????? -????????? 653
Property, plant and equipment???????????????????????? 136,036????? 118,927
?????????????????????????????????????????????????? ----------?? ----------
?????????????????????????????????????? ???????????????254,233????? 189,712
?????????????????????????????????????????????????? ==========?? ==========
?????????????????? Liabilities
Current
???? Accounts payable and accrued liabilities????????? 17,547?????? 21,325
???? Deferred revenue????????? ???????????????????????????326??????????? -
???? Income taxes payable????????????????????????????? 14,501??????????? -
???? Derivative instruments???????????????????????????? 8,143??????????? -
???? Current portion of notes payable?????????????????? 6,915 ???????6,704
?????????????????????????????????????????????????? ----------?? ----------
?????????????????????????????????????????????????????? 47,432?????? 28,029
Accounts payable and accrued liabilities??????????????? 3,197??????? 1,825
Notes payable???? ?????????????????????????????????????73,446?????? 65,663
Asset retirement obligation???????????????????????????? 4,907??????? 5,235
Derivative instruments????????????????????????????????? 3,440??????????? -
Future income taxes????????????????????????????? ???????7,849????????? 288
?????????????????????????????????????????????????? ----------?? ----------
????????????????????????????????????????????????????? 140,271????? 101,040
?????????????????????????????????????????????????? ----------?? ----------
Shareholders' Equity
Capital stock???????????????????????????????????????? 102,807????? 101,412
Contributed surplus???????????????????????????????????? 1,174??????? 1,734
Accumulated other comprehensive income???????????????? (7,388)?????????? -
Retained earnings (deficit)??????????????????????????? 17,369????? (14,474)
?????????????????????????????????????????????????? ----------?? ----------
????????????????????????????????????????????????????? 113,962?????? 88,672
????????????????????????????? ?????????????????????----------?? ----------
????????????????????????????????????????????????????? 254,233????? 189,712
?????????????????????????????????????????????????? ==========?? ==========
Frontera Copper Corporation
Consolidated Statements of Operations
US$ (in thousands except per share amounts)
?????????????????????????????????????????? 4th Quarter????????? Year
??????????????????????????????????????? ----------------? ----------------
????????????????????????????????????????? 2007???? 2006???? 2007???? 2006
??????????????????????????????????????? -------? -------? -------? -------
?????????????????????????????????????????? (unaudited)
Revenue????????????????????????????????? 37,471?? 24,639? 167,382?? 24,639
Cost of sales and expenses
???? Cost of sales?????????????????????? 18,355?? 11,237?? 70,297?? 11,237
???? Depreciation, depletion and
????? amortization??????????????????????? 2,530??? 1,706?? 10,785??? 1,706
???? Exploration??????????????????????????? 191????? 154????? 550????? 154
???? Administration?????????????????????? 2,360????? 278??? 6,995??? 8,115
??????????????????????????????????????? -------? -------? -------? -------
???????????????????????????????????????? 23,436?? 13,375?? 88,627?? 21,212
??????????????????????????????????????? -------? -------? -------? -------
Other (income) and expenses
???? Interest income?????????????????????? (772)??? (159)? (2,180)? (1,627)
???? Long-term interest and accretion???? 3,042??? 2,958?? 12,462?? 10,664
???? Foreign exchange loss????????????????? 297?? (2,588)? 11,443????? 525
???? Loss on repurchase of notes
????? payable???????????????????????????????? -??????? -????? 944??????? -
???? Unrealized losses on derivatives
????? contracts??????????????????????????? (406)?????? -??? 1,322??????? -
??? ????????????????????????????????????-------? -------? -------? -------
????????????????????????????????????????? 2,161????? 211?? 23,991??? 9,562
??????????????????????????????????????? -------? -------? -------? -------
Income (loss) before income taxes? ??????11,874?? 11,053?? 54,764?? (6,135)
Income taxes???????????????????????????? (5,142)?? 3,504? (22,921)?? 3,504
??????????????????????????????????????? -------? -------? -------? -------
Net income (loss) for the period????????? 6,732?? 14,557?? 31,843?? (2,631)
??????????????????????????????????????? =======? =======? =======? =======
Income (loss) per share - Basic??????????? 0.11???? 0.28???? 0.50??? (0.05)
??????????????????????? - Diluted????????? 0.10???? 0.27???? 0.49??? (0.05)
Weighted average common shares
??? outstanding - Basic????????????????? 64,238?? 52,554?? 63,976?? 49,327
??????????????? - Diluted??????????????? 64,963?? 53,594?? 64,657?? 49,327
Frontera Copper Corporation
Consolidated Statements of Retained Earnings (Deficit)
US$ (in thousands)
????????????????????????????????? 4th Quarter??????????????? Year
??????????????????????????? ----------------------- ----------------------
?????????????????????????????? 2007??????? 2006??????? 2007??????? 2006
??????????????????????????? ----------- ----------? ----------? ----------
????????????????????????????????? (unaudited)
Retained earnings (deficit),
 beginning of period???????????? 10,637??? (29,031)??? (14,474)??? (11,843)
Net income (loss) for the
 period?????????????????????????? 6,732???? 14,557????? 31,843????? (2,631)
??????????????????????????? ----------- ----------? ----------? ----------
Retained earnings
 (deficit), end of period??????? 17,369??? (14,474)???? 17,369???? (14,474)
??????????????????????????? =========== ==========? ==========? ==========
Consolidated Statements of Comprehensive Income (Loss)
US$ (in thousands)
????????????????????????????????? 4th Quarter??????????????? Year
??????????????????????????? ----------------------- ----------------------
?????????? ????????????????????2007??????? 2006??????? 2007??????? 2006
??????????????????????????? ----------- ----------? ----------? ----------
????????????????????????????????? (unaudited)
Net income (loss) for the
 period?????????????????????????? 6,732???? 14,557????? 31,843????? (2,631)
Unrealized gain (loss) on
 derivatives designated as
 cash flow hedges, (net of
 tax of $(6,571) and $2,873)???? 16,895????????? -????? (7,388)????????? -
Tax valuation allowance?????????? 9,444????????? -?????????? -?????????? -
??????????????????????????? ----------- ----------? ----------? ----------
???????????????????????????????? 26,339????????? -????? (7,388)????????? -
??????????????????????????? ----------- ----------? ----------? ----------
Comprehensive income (loss)
 for the period????????????????? 33,071???? 14,557????? 24,455????? (2,631)
??????????????????????????? =========== ==========? ==========? ==========
Frontera Copper Corporation
Consolidated Statements of Cash Flows
US$ (in thousands)
???????????????????? ???????????????4th Quarter?????????????? Year
??????????????????????????????? --------------------? --------------------
?????????????????????????????????? 2007?????? 2006?????? 2007?????? 2006
??????????????????????????????? ---------? ---------? ---------? ---------
???????????????????????????????????? (unaudited)
Cash flows from operating activities
Net income (loss) for the period??? 6,732???? 14,557???? 31,843???? (2,631)
?? Items not involving cash:
????? Stock-based compensation????????? -???????? 30????????? -??????? 121
????? Future income taxes???????????? (55)??? (3,504)???? 7,551???? (3,504)
????? Unrealized foreign exchange???? 273???? (3,137)??? 11,752?????? (462)
????? Depreciation, depletion and
?????? amortization???????????????? 4,098????? 1,838???? 15,011????? 1,838
????? Accretion?????????????????????? 685??????? 938????? 3,166????? 2,540
????? Write-off of deferred
?????? finance costs??????????????????? -????????? -??????? 522????????? -
????? Unrealized (gains) losses
?????? on derivative contracts?????? (406)???????? -????? 1,322????????? -
????? Long term inventory???????? (16,099)????? (813)?? (20,099)????? (813)
????? Long term deposits?????????? (1,854)???????? -???? (1,854)???????? -
????? Loss on note repurchase?????????? -?????? ???-??????? 944????????? -
??????????????????????????????? ---------? ---------? ---------? ---------
?????????????????????????????????? (6,626)???? 9,909???? 50,158???? (2,911)
Changes in non-cash working
 capital balances?????????????????? 3,521???? (3,854)???? 5,581???? (9,164)
??????????????????????????????? ---------? ---------? ---------? ---------
Cash flows from operating
 activities??????????????????????? (3,105)???? 6,055???? 55,739??? (12,075)
??????????????????????????????? ---------? --------- ?---------? ---------
Cash flows from investing
 activities
???? Property, plant and
????? equipment??????????????????? (1,344)?? (10,241)?? (29,765)?? (83,209)
???? Decrease in restricted
????? cash????????????????????????????? -????? 3,487????? 1,233??? ?32,555
??????????????????????????????? ---------? ---------? ---------? ---------
Cash flows from investing
 activities??????????????????????? (1,344)??? (6,754)?? (28,532)?? (50,654)
??????????????????????????????? ---------? ---------? ---------? ---------
Cash flows from financing
 activities
???? Issuance (repurchase) of
????? notes???????????????????????????? -????????? -???? (8,385)??? 22,085
???? Exercise of warrants?????????????? -???? 38,438????????? -???? 39,815
???? Exercise of options????????? ?????69??????? 145??????? 835??????? 317
???? Loan proceeds, net???????????????? -??? (11,034)???????? -?????? (753)
??????????????????????????????? ---------? ---------? ---------? ---------
Cash flows from financing
 activities?????????????????????????? ?69???? 27,549???? (7,550)??? 61,464
??????????????????????????????? ---------? ---------? ---------? ---------
Effect of exchange rate changes
 on cash?????????????????????????????? 15?????? (204)???? 1,275????????? 4
??????????????????????????????? ---------? ---------? ---------? ---------
Change in cash and cash
 equivalents during the period???? (4,365)??? 26,646???? 20,932???? (1,261)
Cash and cash equivalents,
 beginning of period?????????????? 58,844????? 6,901???? 33,547???? 34,808
??????????????? ????????????????---------? ---------? ---------? ---------
Cash and cash equivalents, end
 of period???????????????????????? 54,479???? 33,547???? 54,479???? 33,547
??????????????????????????????? =========? =========? =========? =========
Cash and cash equivalents
 consist of:
???? Cash?????????????????????????? 9,771????? 6,907????? 9,771????? 6,907
???? Cash equivalents????????????? 44,708???? 26,640???? 44,708???? 26,640
??????????????????????????????? ---------? ---------? ---------? ---------
?????????????????????????????????? 54,479???? 33,547???? 54,479???? 33,547
??????????????????????????????? =========? =========? =========? =========
Supplemental information:
???? Interest paid????????????????? 3,259????? 4,215????? 9,164????? 8,673
???? Income taxes paid????????????? 1,209????????? -????? 1,209????????? -

 

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