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

Frontera Copper Corporation

March 29, 2007 10:41 ET

Frontera Copper Reports Year End 2006 Results and Outlook for 2007

TORONTO, ONTARIO--(CCNMatthews - March 29, 2007) -

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

Frontera Copper Corporation (TSX:FCC)(TSX:FCC.NT)(TSX:FCC.NT.A) today reports financial results for the year and quarter ending December 31, 2006 and outlook for 2007.

Results from Operations

With the commencement of commercial operations, Frontera Copper reported net income of $14.6 million, or $0.28 per share, for the 2006 fourth quarter. During the quarter, the Company sold 8,537,129 pounds of cathode copper and recorded revenues of $24.6 million. Net income for the quarter also included a favorable income tax adjustment of $3.5 million ($0.07 per share) and a foreign exchange gain of $2.6 million. Cash flow from operating activities during the 2006 fourth quarter amounted to $5.8 million and net cash flow was $26.6 million. For the year 2006, Frontera Copper reported a net loss of $2.6 million, or $0.05 per share.

The first copper cathodes were harvested on October 6, 2006, and the commencement of the SX-EW facility operations marked the completion of the development phase of the Piedras Verdes Project. A total of 9,193,359 pounds of LME Grade "A" quality copper cathode was produced during the fourth quarter of 2006.

Sales revenue is received from Gerald Metals, Inc. who, through an agreement completed in July 2006, will purchase 100% of Piedras Verdes copper cathode through December 2010. The company sells its copper cathode FCA, mine site. The price the Company receives for its copper cathode sales is calculated on the average COMEX price for the month following the month of shipment plus or minus an adjustment to account for a premium over the COMEX price and freight, insurance and financing costs incurred by Gerald Metals. During the fourth quarter the Company's realized price was $2.91 per pound.

Cost of sales during the fourth quarter totaled $11.2 million. Total cash costs per pound were $1.25, ($1.32 including prepaid royalties) compared to the life of mine cash costs estimated in the December 2005 Technical Report of approximately $0.80 per pound (including royalties). Higher initial costs are normal with the start-up of operations and since a significant portion of the operations costs are fixed, lower output produces higher unit costs. As production achieves design capacity, these per unit operating costs will come down.

At December 31, 2006, the Company had capitalized property, plant and equipment expenditures totaling $118.9 million compared to $34.1 million at December 31, 2005. Prior to October 1, 2006, all pre-production costs and revenues related to operations were capitalized to construction in progress. Upon commencement of commercial production, all deferred costs were allocated to specific property, plant and equipment categories.

In December 2006, Frontera Copper announced that an aggregate of 14,992,890 Series A Warrants were exercised, representing 99.95% of the 15,000,000 Series A Warrants originally issued. The Series A Warrants had traded on the Toronto Stock Exchange under the symbol, FCC.WT, were exercisable at Cdn$3.00 per share until December 11, 2006. The aggregate proceeds from the exercise of the Series A Warrants was Cdn$44,979,000 (US$39.8 million). The unexercised warrants have expired and have been delisted from the Exchange.

Project Status

Following the successful start-up, management focus immediately shifted to maximizing the operating efficiencies of the plant and the concentration of copper in the leach solution to achieve the plant's full production or design capacity. Solution flow rates are now slightly above design rates, however, the copper grade of the solutions is below requirements for full production output. During the later part of March, the annualized rate of production reached 75% of full potential. The SX plant has had 98.71% overall availability while the EW plant has had 99.38% overall availability.

Ore is now being placed on the heap leach pad in lifts of five meters (previously 10 meter lifts). To accelerate copper dissolution and improve solution grade, approximately two thirds of the ultimate acid application is being applied by pre-soaking the ore with a strong solution of sulfuric acid prior to rinsing with normal raffinate solutions. With the lower five meter lifts, the leach cycle can be reduced from about 120 days to 60 days and the top-down acid cure is expected to increase the amount of copper recovered during the first cycle leach by providing most of the acid earlier in the cycle.

Phase 2 of the project includes construction of additional leach pad space, as well as surface flood water diversion structures and a truck shop. The construction of the next phase of the leach pad is well advanced and ore loading will commence in April, thus providing a larger area under leach.

Outlook for 2007

The Company currently anticipates production of 60 million pounds of "LME Grade A" quality copper cathode during 2007 at a cash cost of approximately $1.10 per pound. Capital expenditures are forecast at $28 million.

Management continues to review all aspects of the operating processes and will make appropriate adjustments to improve efficiencies in order to safely reduce costs.

The Board and Management believes that there is significant scope for consolidation amongst mid-tier copper producers and continues to evaluate opportunities to grow the business through mergers, acquisitions, joint ventures and exploration. The Company has concentrated on opportunities in Canada, United States, Mexico, Peru and Chile with the focus on copper projects, given the considerable experience which management has in these countries and in the copper industry. During the past year, the Company evaluated 16 projects, of which 7 were copper projects in Mexico.

Conference Call

Frontera Copper will hold a conference call to report fourth quarter 2006 results and the outlook for 2007 on Thursday March 29, 2007 at 11:00 a.m. EST.

The conference call will be chaired by Mr. Gary Loving, President and Chief Executive Officer. Mr. Loving will be joined by Dr. Patrick Ryan, Chairman and Dave Peat, Vice President and Chief Financial Officer.

If you wish to participate, please dial 416-695-5259 or Toll-Free 1-800-565-0813.

The call will be available for replay until April 12, 2007. Please dial 416-695-5275 or Toll-Free 1-888-509-0081 and enter Passcode: 642197.

About Frontera Copper

Frontera Copper is a Canadian mining, development and exploration company whose principle activity is the production of copper cathode from the Piedras Verdes run-of-mine heap-leach copper operation in Sonora, Mexico. Production commenced in October, 2006 and is expected to reach the operations' full annual production capacity of 70 million pounds of copper cathode in 2007. 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 improve the economics and extend the life of the project.

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.



Frontera Copper Corporation
Consolidated Balance Sheet
US$ (in thousands)

December 31,
---------------------
2006 2005
---------------------
Assets
Current
Cash and cash equivalents 33,547 34,808
Restricted cash 1,233 32,184
Accounts receivable 1,645 -
Commodity taxes recoverable 5,817 1,361
Inventory 20,324 -
Prepaid expenses and deposits 5,741 115
---------------------
68,307 68,468

Restricted cash 1,825 3,429
Deferred finance charges 653 -
Property, plant and equipment 118,927 34,117
---------------------
189,712 106,014
---------------------
---------------------

Liabilities
Current
Accounts payable and accrued liabilities 21,325 4,076
Current portion of notes payable 6,704 5,104
---------------------
28,029 9,180

Accounts payable and accrued liabilities 1,825 1,500
Notes payable 65,663 43,409
Asset retirement obligation 5,235 -
Future income tax liability 288 875
---------------------
101,040 54,964
---------------------

Shareholders' Equity
Capital Stock 101,412 55,102
Warrants - 5,969
Contributed Surplus 1,734 1,822
Deficit (14,474) (11,843)
---------------------
88,672 51,050
---------------------
189,712 106,014
---------------------
---------------------


Frontera Copper Corporation
Statement of Income
US$ (in thousands except per share amounts)

4th Quarter December 31,
------------------- -------------------
2006 2005 2006 2005
------------------- -------------------

Revenue 24,639 - 24,639 -
Cost of sales and expenses
Cost of sales 11,237 - 11,237 -
Depreciation, depletion and
amortization 1,706 - 1,706 -
Exploration 154 - 154 -
Administration 278 1,689 8,115 4,099
------------------- -------------------
13,375 1,689 21,212 4,099
------------------- -------------------

Other (income) and expenses
Interest income (159) (701) (1,627) (1,963)
Long-term interest and
accretion 2,958 2,000 10,664 4,110
Foreign exchange (gain) loss (2,588) 2,518 525 1,588
Loss on foreign exchange
contract - - - 413
------------------- -------------------
211 3,817 9,562 4,148
------------------- -------------------

Income (loss) before income
taxes 11,053 (5,506) (6,135) (8,247)
Income tax 3,504 (875) 3,504 (875)
------------------- -------------------

Net income (loss) 14,557 (6,381) (2,631) (9,122)
------------------- -------------------
------------------- -------------------

Weighted average number of
common shares outstanding
- basic 52,554 48,070 49,327 44,960
Basic earnings (loss) per
common share $ 0.28 $ (0.13) $ (0.05) $ (0.20)
------------------- -------------------
------------------- -------------------

Weighted average number of
common shares outstanding
- diluted 53,594 48,070 49,327 44,960
Diluted earnings (loss) per
common share $ 0.27 $ (0.13) $ (0.05) $ (0.20)
------------------- -------------------
------------------- -------------------


Frontera Copper Corporation
Consolidated Statements of Cash Flows
US$ (in thousands)

4th Quarter December 31,
----------------- ----------------
2006 2005 2006 2005
----------------- ----------------
Cash flows from operating activities
Net income (loss) for the period 14,557 (6,381) (2,631) (9,122)
Charges not involving cash:
Stock-based compensation 30 778 121 1,232
Unrealized foreign exchange (3,341) 221 (458) 3,139
Future income taxes (3,504) 875 (3,504) 875
Depreciation, depletion and
amortization 1,838 - 1,838 -
Accretion 904 445 2,540 939
----------------- ----------------
10,484 (4,062) (2,094) (2,937)

Changes in non-cash working capital
balances (4,667) (619) (9,977) 2,016
----------------- ----------------
Cash flows from operating activities 5,817 (4,681) (12,071) (921)
----------------- ----------------

Cash flows from investing activities
Property, plant and equipment (10,241) (14,536) (83,209) (27,773)
Decrease (increase) in restricted cash 3,487 24,328 32,555 (35,613)
----------------- ----------------
Cash flows from investing activities (6,754) 9,792 (50,654) (63,386)
----------------- ----------------

Cash flows from financing activities
Finance costs - - (753) (186)
Issue of notes and shares - - 22,085 52,661
Exercise of warrants 38,438 - 39,815 -
Exercise of options 145 - 317 -
Loan repayment (11,000) - - -
----------------- ----------------
Cash flows from financing activities 27,583 - 61,464 52,475
----------------- ----------------

Change in cash and cash equivalents
during the period 26,646 5,111 (1,261) (11,832)

Cash and cash equivalents, beginning
of period 6,901 29,697 34,808 46,640
----------------- ----------------

Cash and cash equivalents, end of
period 33,547 34,808 33,547 34,808
----------------- ----------------
----------------- ----------------

Cash and cash equivalents consist of:
Cash 6,907 2,776 6,907 2,776
Cash equivalents 26,640 32,032 26,640 32,032
----------------- ----------------
33,547 34,808 33,547 34,808
----------------- ----------------
----------------- ----------------

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