Frontera Copper Corporation
TSX : FCC.WT
TSX : FCC
TSX : FCC.NT
TSX : FCC.NT.A

Frontera Copper Corporation

March 29, 2006 16:27 ET

Frontera Copper Reports Year End 2005 Results

TORONTO, ONTARIO--(CCNMatthews - March 29, 2006) -

(All dollar amounts are expressed in United States currency unless otherwise noted)

Frontera Copper Corporation (TSX:FCC)(TSX:FCC.NT)(TSX:FCC.NT.A)(TSX:FCC.WT) today reports results for the year and fourth quarter ended December 31, 2005.

Financial Results

Frontera reported a net loss of $9,121,827, ($0.20 per share) for the year ended December 31, 2005 as compared to a net loss of $1,919,062 ($0.15 per share) for the year ended December 31, 2004. A significant portion of the increase ($4.1 million) is the result of interest and accretion on the notes payable issued in June and July 2005. This was partially offset by interest income ($1.9 million) on the balance of unexpended funds from the initial public offering completed in December 2004 and the June 2005 offering. Increases in administrative expenditures and professional fees ($2.0 million) related to expanded corporate and project activity and foreign exchange losses ($1.2 million) added to the net loss.

At December 31, 2005, Frontera had a working capital surplus of $59,288,602 as compared to $46,736,685 at December 31, 2004. The June 2005 public offering less expenditures for the year accounted for the increase. At December 31, 2005, $32,184,300 of working capital was represented by cash which has been placed in escrow and restricted for project purposes and future interest payments associated with the notes issued in June and July of 2005. The Company also had long-term restricted cash of $3,428,908 as of December 31, 2005 related to commitments under an agreement with mining contractor, PEAL Mexico.

Expenditures on mineral property and deferred exploration and development were $29,272,575 during the year to total $34,117,304 at December 31, 2005.

Frontera's net loss for the three months ending December 31, 2005 was $6,380,842or $0.133 per share versus a loss of $962,024 or $0.063 per share for the three months ended December 31, 2004. Major expenses in the fourth quarter of 2005 included foreign exchange loss of $2.5 million, notes payable interest and accretion of $2.0, administrative expenses of $0.9 million, income tax expense of $0.9 and stock-based compensation of $0.8 million. Total expenses were partially offset by interest income of $0.7 million.

Company Developments

During 2005, the Company achieved significant milestones towards bringing the Piedras Verdes project into production in the second half of 2006.

In December, the Company announced the completion of basic engineering and the results of an updated technical report on the Piedras Verdes project. The report was prepared to reflect December 2005 capital and operating cost estimates for the project, including the terms of the contract mining agreement with PEAL Mexico. The net present value and internal rate of return of the Piedras Verdes project, based on the revised capital and operating costs, are estimated at $100.9 million (at an 8% discount rate) and 23.1%, respectively, at a copper price of $1.31 per pound. The initial capital cost of the project is estimated to be $90.0 million, including $6.1 million of initial working capital. The life-of-mine average cash costs are projected to be $0.79 per pound of cathode copper produced, including royalties.

The Company appointed M3 Engineering & Technology Corporation in June to provide engineering, procurement and construction management services to the project. In its 19 year history, M3 has designed 6,000 projects, including a number in Mexico, and has considerable expertise in optimal layout, detailing and safe operation of SX-EW facilities. M3 Engineering was chosen for this experience and, as authors of Frontera's feasibility study and technical reports, for their knowledge of the Piedras Verdes project. Working with M3 Engineering, the Company has moved aggressively to procure critical infrastructure items and long lead time equipment for the processing facility to minimize cost pressures and ensure it meets its second half 2006 target for production. Frontera has committed to over $69 million or 83% of capital costs and is finalizing long-term contracts for power and diesel fuel.

Frontera has received all of the required environmental permits from Federal, State and local authorities for construction of the Piedras Verdes project during the year. Construction of the access road and power transmission line for the project commenced immediately upon receipt of the final permit in September. Construction of Phase 1 of the heap leach pad is nearing completion and ore is being placed on sections that are complete. The concrete foundations for the electrowinning processing plant have been poured and setting of cells continues and final alignment has begun.

In July, Frontera entered into a contract mining services agreement with PEAL Mexico, S.A. de C.V., a wholly-owned subsidiary of PEAL OP, S.A., for the provision of contract mining services at the Piedras Verdes project. PEAL Mexico will provide mining services at the Piedras Verdes project for a six-month pre-production period followed by a contract period of five years. PEAL Mexico mobilized its fleet to the Piedras Verdes project in late 2005 and has begun preproduction mining activities.

Prior to the commencement of construction, the Company relocated the Piedras Verdes community from land required for project development. Forty nine homeowners in the original village agreed to move 6 km south of the mine site to a new townsite with infrastructure including utilities for the homes (power, water, sewage disposal system and roads), a kindergarten, a primary school, a secondary school, playgrounds, plaza area, health clinic and school masters' houses provided by Frontera. In October, Frontera delivered the town site infrastructure to the Municipality of Alamos, which formally recognized the completion of the relocation.

The Company was granted a water consumption permit by the National Water Commission (CNA) for more than the 4 million m3 of water required annually for the Piedras Verdes project during the year. Water wells have been constructed and Frontera is completing the requirements for the CNA to grant licenses to operate the individual water wells.

During the year, Frontera announced encouraging initial results from an exploration trenching program at Cerro Chato, an area located 1.5 km to the west of the proposed open pit. These initial results establish the potential for extensive near-surface copper oxide mineralization, which, if confirmed, could add low stripping ore to the mine plan early in the mine life and thus significantly improve the economics of the Piedras Verdes project.

In June and July 2005, the Company issued 69,000 units at a price of Cdn$1,000 per unit for gross proceeds of Cdn$69,000,000. Each unit issued consisted of a Cdn$1,000 principal amount senior unsecured note and 100 common shares of Frontera. The notes are not convertible, mature on June 10, 2010 and pay interest semi-annually at a rate of 10% per annum.

Subsequent to the year end, Frontera issued Cdn$28,750,000 principal amount of senior unsecured notes of the Company. The notes were priced at 93%, or Cdn$930 per Cdn$1,000 principal amount, for total gross proceeds of Cdn$26,737,500. The notes bear interest at 10% per annum, are not convertible and mature on March 15, 2011. The offering, together with the over-allotment option, closed in March.

About Frontera Copper

Frontera was incorporated in March 2002 to purchase and bring into production the Piedras Verdes open pit, run-of-mine, heap leach, SX-EW copper project in Sonora, Mexico. Construction activities are well underway at the site along with preproduction mining activity. Copper production is expected to commence in the second half of 2006 at an annual rate of 70 million pounds per year of LME Grade A cathode at an average life-of-mine cash operating cost of $0.79 per pound, including royalties. A total of 942 million pounds of copper is projected to be produced during the 18 year life of the project. Existing resources and prospective exploration targets adjacent to the proposed open pit have the potential to improve the economics and extend the life of the project.

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