SOURCE: Frontera Copper Corporation

January 15, 2008 08:00 ET

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--(Marketwire - January 15, 2008) - Frontera Copper Corporation (TSX: FCC) (TSX: FCC.NT) (TSX: FCC.NT.A) 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       Total Cu  Contained Cu  Contained Cu
                         Tonnes(000)   Grade%    Tonnes(000)     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.

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.

Contact Information

  • 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: Email Contact