SOURCE: Frontera Copper Corporation

September 24, 2007 09:00 ET

Frontera Copper Reports Cash Balances of $55 Million and Provides an Update on Third Quarter Production at the Piedras Verdes Operations

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

TORONTO--(Marketwire - September 24, 2007) - Frontera Copper Corporation (TSX: FCC) (TSX: FCC.NT) (TSX: FCC.NT.A) is pleased to provide the following update on the Company's cash balances and third quarter operating results at the Piedras Verdes operations.

Frontera Copper reports that following the repurchase of approximately C$8.9 million of its outstanding senior unsecured notes, its cash balances are approximately $55 million. The Company's cash balances are primarily invested in guaranteed investment certificates or similar high-quality instruments with two major Canadian financial institutions. The Company has no exposure to asset-backed commercial paper and intends to continue investing its excess cash balances in the same secure manner that it has to date.

The Company continually evaluates the best uses of its cash on behalf of shareholders and has recently repurchased a portion of its senior unsecured notes in the open market. The repurchases, consisting of C$4.5 million of the notes maturing on June 15, 2010 and C$4.4 million of the notes maturing on March 15, 2011, were purchased at approximately their par value of C$1,000 per note and will be cancelled. The senior unsecured notes bear interest at the rate of 10% per year and this repurchase will result in annual interest expense savings of approximately C$890,000. The Company will continue to evaluate additional note repurchases as opportunities arise.

Frontera Copper continues to focus on maintaining its annual production rate of 70 million pounds of copper cathode at the Piedras Verdes operations. During the third quarter, sulfuric acid deliveries to the operations were reduced due to a strike at the operations of its major sulfuric acid supplier. The Company has been supplementing the acid shortfall to a limited extent by obtaining additional supplies of sulfuric acid from other sources. In addition, in early September Hurricane Henriette caused record rain to fall at the Piedras Verdes operations, which negatively impacted leach pad performance by diluting the pregnant leach solution for a number of days. As a result, the Company now expects third quarter production to be approximately 15 million pounds of "LME Grade A" quality copper cathode. Mining and placement of ore on the leach pad were interrupted to a lesser extent during the third quarter. Therefore, with the resumption of normal acid deliveries, production improvements are expected to resume in the fourth quarter and the Piedras Verdes operations are now expected to achieve production for the full year of between 57 and 60 million pounds of copper cathode. The Company's 2007 forecasts for cash operating costs and capital expenditures remain unchanged at $1.19 to $1.27 per pound (including prepaid royalties) and $37 million, respectively.

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. A total of 942 million pounds of copper is projected to be produced during the 18-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 project.

For further information, please see Frontera Copper's website at or contact:

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

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