SOURCE: Frontera Copper Corporation

January 22, 2008 08:00 ET

Frontera Copper Reduces Hedging Program

(All Dollar Amounts Are Expressed in United States Currency Unless Otherwise Noted)

TORONTO--(Marketwire - January 22, 2008) - Frontera Copper Corporation (TSX: FCC) (TSX: FCC.NT) (TSX: FCC.NT.A) today reported that it had reduced its outstanding hedge position by approximately 30%.

During December 2007 and January 2008, the Company repurchased 2.8 million and 10.2 million pounds, respectively, of its outstanding forward copper sales positions. The approximate $2 million cost associated with these repurchases will be deferred and recorded in income based on the original maturities of the positions.

Frontera originally entered into the limited hedging program to help ensure that it would generate sufficient revenues from its copper cathode sales during the two-year period March 2007 through February 2009 to cover certain known financial obligations. The financial obligations included the repayment of the outstanding Notes Payable and deferred and sustaining capital expenditures. Since the time that the hedging program was initiated through December 31, 2007, Frontera has funded approximately $21 million of capital expenditures and has repurchased approximately C$8.9 million of the Notes Payable.

Alan Edwards, President and Chief Executive Officer, said, "In light of the improved copper forward market curve and the current lower production levels resulting from shortages of sulphuric acid, we believe that reducing our hedge position at this time is prudent and in the Company's best interest."

As at January 21, 2008, the Company had the following copper forward sales contracts outstanding with a major financial institution:

                           Pounds Sold     Average Sales
               Year      Forward (000's)  Price per Pound
               2008          21,494           $2.65
               2009           6,118            2.52
              Total          27,612           $2.62

The remaining copper forward sales contracts represent about 3% of the recoverable copper contained in the remaining 17-year project life. The Company has no plans to further reduce its hedge book at this time.

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. Existing resources and prospective exploration targets adjacent to the main open-pit have the potential to extend the 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 or contact:

    Dave Peat
    Vice President and Chief Financial Officer
    Tel.: 602 424-5484
    Email: Email Contact