SOURCE: Frontera Copper Corporation

November 11, 2008 06:00 ET

Frontera Copper Announces the Temporary Suspension of Mining at Its Piedras Verdes Mine in Mexico, With Leaching Operations to Continue; Third Quarter 2008 Earnings Release Scheduled for November 12; Conference Call Scheduled for November 13

TORONTO and PHOENIX, AZ--(Marketwire - November 11, 2008) - Frontera Copper Corporation (TSX: FCC) (TSX: FCC.NT) (TSX: FCC.NT.A) today announced that in response to the recent downturn in copper prices, mining activities at its Piedras Verdes Operations in Mexico will be temporarily suspended. Copper production will continue on a gradually declining basis while leaching operations will proceed on an uninterrupted basis to recover copper from ores previously placed on the leach pads. This action will result in the near-term reduction of approximately 100 employees at Piedras Verdes, not including people who are employed by the Company's mining and engineering contractors.

Alan Edwards, President and Chief Executive Officer, said, "We are disappointed in the recent developments in the copper market and the precipitous decline in copper prices. After careful study, we have decided to take proactive measures to generate cash and protect the long-term viability of our operation. Our cash flow will be substantially enhanced by the cessation of mining as we eliminate the most significant component of our production costs. We are also able to generate revenue from the nearly 100 million pounds of recoverable copper contained in our leach pads during this period of uncertainty in the global economy and the copper market.

"We look forward to a smooth restart of mining activities once the outlook for the copper market improves and prices stabilize at a level that would justify a resumption of full operations. In the meantime, we are fully committed to cooperating with and assisting our employees, suppliers and contractors as we transition into this new operating environment."

Copper production for the fourth quarter of 2008 is estimated to range from 9 million to 11 million pounds, based on the temporary cessation of mining activities scheduled to be completed during the next several days. Copper production for the first quarter of 2009 is estimated at approximately 6 million to 8 million pounds, assuming the suspension of mining activities continues for the duration of the quarter. Since copper will be recovered from leach pad inventories, cash outflows per pound of copper produced are expected to range from $0.85 to $1.10 per pound during the first quarter of 2009. When combined with the expense of previously-incurred and inventoried mining costs of approximately $0.60 per pound, total reported cash costs are estimated at $1.45 to $1.70 per pound.

Coupled with current cash balances, the cash flow generated by the Piedras Verdes Operations at present copper prices (including the costs associated with the temporary suspension of mining activities) is expected to provide sufficient funds to enable the Company to meet all of its financial obligations during 2009.

THIRD QUARTER 2008 EARNINGS RELEASE AND CONFERENCE CALL

Frontera Copper Corporation will issue its third quarter 2008 Earnings Release, Financial Statements and Management's Discussion and Analysis before the market opens on Wednesday, November 12, 2008. A conference call will be held at 11:00 a.m. ET on November 13 to discuss the quarterly results and the suspension of mining activities announced herein. The conference call will be hosted by Alan Edwards, President and Chief Executive Officer. He will be joined by Dave Peat, Vice President and Chief Financial Officer; Tim Swendseid, Vice President, Engineering and Rod Prokop, Vice President, Investor Relations.

Those wishing to participate should dial 612-332-0725 or toll free 800-288-8968. A replay of the call will also be available through Thursday, November 27, by dialing 320-365-3844 or toll free 800-475-6701 and entering access code 968643.

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 contact:

    Rodney Prokop
    Vice President, Investor Relations
    (602) 424-5483
    Email Contact

    Alan Edwards
    President and Chief Executive Officer
    (602) 424-5488