Centenario Copper Corporation

Centenario Copper Corporation

November 20, 2008 07:46 ET

Centenario Copper Completes Partial Copper Hedge Monetization for USD $26 Million of Net Proceeds

TORONTO, ONTARIO--(Marketwire - Nov. 20, 2008) - Centenario Copper Corporation ("Centenario" or the "Company")(TSX:CCT) has completed the repurchase of a portion of its outstanding 2010 copper hedge contracts.

On November 13, 2008 the Company reported that it had received the consent of the lenders under the Franke Credit Facility (the "Lenders"), to repurchase a portion of the 2010 copper hedge book to yield $26 million in net proceeds. On November 19, 2008, all relevant documentation was completed, and the Company repurchased 30.2 million pounds of outstanding copper hedge contracts, dated from May 2010 through December 2010, at an average price of $1.79/lb, for net proceeds to the Company of $26 million.

After this transaction, the Company still has forward sales in place of 25.5 million pounds at an average price of $2.80/lb, for delivery between May and December, 2009 and 18.8 million pounds at an average price of $2.73/lb for delivery between January and May 2010, for a total of 44.3 million pounds of copper at an average price of $2.77/lb.

The proceeds from the Copper Hedge Repurchase (the "Hedge Proceeds") will be placed into an escrow account. The release of the Hedge Proceeds to the Company will be subject to the completion, to the satisfaction of the Lenders, of due diligence activities underway by the Lenders' Technical Agent in relation to an updated Franke Development Plan. This updated plan is based on a revised mine plan, which incorporates a China starter pit of oxide material into the previously standalone Franke mine plan, and a revised capital cost and development schedule. The revised mine plan is progressing, and it will be incorporated into a NI 43-101 compliant Technical Report currently underway. The release of the Hedge Proceeds and drawing of the remaining $5 million available under the Franke Credit Facility will also be subject to the Company's ability to continue to meet the terms of the existing Franke Credit Facility, or such amendments as the Lenders shall require, which may include, but may not be limited to, revised pricing, covenant terms and loan amortization schedule and additional copper hedging.

The Company currently anticipates that the Lenders' Technical Agent will complete its due diligence review in the next several weeks and that it will be able to finalize a satisfactory agreement with the Lenders shortly thereafter in relation to any modifications that may be required to the Franke Credit Agreement in order to satisfy the conditions of release of the Hedge Proceeds to the Company. However, there can be no assurance that the Company will be able to reach definitive agreements with the Lenders, or will be able to meet the Lenders' conditions for the release of the Hedge Proceeds to the Company.

Other Information

Additional information related to the Company, including risk factors as set out in the Company's Annual Information Form, is available for viewing on SEDAR at www.sedar.com and at the Company's website at www.centenariocopper.com.


Richard Colterjohn, President and CEO

About Centenario Copper Corporation:

The Company was founded in 2004 with the goal of becoming a mid-tier copper producer and consolidator, active in regions of low sovereign risk. Centenario currently operates exclusively in Regions II and III of Chile. The Company intends to achieve its goal through the acquisition and development of advanced, mid-sized copper projects. It then plans to enhance the scale and value of its principal projects through the roll-up of smaller satellite copper resources which exist regionally around the principal projects.

The Franke Property, located in Region II, is currently in construction and is projected to produce 30,000 tonnes of cathode copper per year, starting in early 2009. The Company believes that the contiguous Pelusa Property is highly prospective for developing additional leachable copper resources and is evaluating possible production scenarios, including processing at the Franke plant. The Pan de Azucar Property, located 45 km. from the Franke Property, is currently being evaluated as a possible nucleus for a second property cluster. The Company continues to evaluate other "in region" clustering opportunities which could reinforce its existing property portfolio.

Copies of NI 43-101 Technical Reports are posted on SEDAR and on the Company's web site. For more information, please visit the Company's website at www.centenariocopper.com.

CAUTIONARY STATEMENT: This News Release includes certain "forward-looking statements". All statements other than statements of historical fact, included in this release, including, without limitation, statements regarding future plans and objectives of Centenario Copper Corporation, are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from Centenario's expectations are the risks detailed herein and from time to time in the filings made by Centenario Copper Corporation with securities regulators.

No stock exchange, securities commission or other regulatory authority has approved of disapproved the information contained herein.

Contact Information