Frontera Copper Provides Update on Operations

Frontera Copper Provides Update on Operations

Frontera Copper Corporation provided an update on the Piedras Verdes operations.

Second Quarter 2008 Operating Highlights

– Copper cathode sales of 9.9 million pounds – Average cash cost of $2.36 per pound

– Closing cash balance of $19.4 million

During the second quarter of 2008, the Piedras Verdes operations produced 9.8 million pounds and sold 9.9 million pounds of “LME Grade A” quality copper cathode compared to production and sales of 9.9 million pounds of copper during the first quarter of 2008. Preliminary 2008 second quarter cash costs were $2.36 per pound, a decrease of $0.78 per pound from the 2008 first quarter cash costs of $3.14 per pound reflecting lower acid costs.

New operating plans have been developed that project production in the second half of 2008 will be above the first half of 2008 levels, gradually increasing to full production during the third quarter of 2009. A key component of these mine plans involves accessing higher grade ores, with improved leaching characteristics, in the eastern areas of the mine. Opportunities exist for near term production increases. During the first half of July, as a result of improved recoveries, an average of 55 TPD of copper cathode have been plated compared to the average of 49 TPD in the second quarter of 2008.

The Company’s cash balance on June 30, 2008 was $19.4 million. During the quarter, cash decreased by $10 million primarily reflecting the payment of $9 million of 2008 Mexican tax installments. Consistent with Mexican tax laws, the Company expects to receive a refund of these 2008 installments during the early part of 2009, since it is not expected to be in cash taxable position in Mexico for the 2008 fiscal year. The Company also expects to receive a refund of taxes paid in respect of the 2007 tax year of approximately $6 million in the second half of 2008.

The Company is currently generating positive cash flows and expects that based on its current operating plans and at current copper prices it should be generating positive cash flows for the remainder of the 2008. The Company’s current remaining hedge program consisting of 16.6 million pounds sold forward at an average price of $2.58 is scheduled to be completed in the first quarter of 2009. Completion of the hedge program will allow the Company to fully participate in the robust copper market that we are currently experiencing.

The Piedras Verdes operation is continuing to receive acid from its primary supplier at contracted prices, despite the ongoing labor strike at the supplier’s major mining operation, however, it is receiving less than optimum levels of acid for its current operating situation. Previously announced ore cutoff and leaching strategies have enabled the operation to minimize acid consumption and avoid purchasing high cost sulfuric acid in the spot market during second quarter of 2008.

The rate of copper recovery from the leach pads continues to be slower than originally expected. The slower recovery is largely due to sub-optimal leach solution chemistry, stemming from shortfalls in acid supplies, which started in the second half of 2007. Consequently, while the acid-soluble copper is recovering well, a portion of the copper contained in the leach pad requires more balanced solution chemistry over a longer period of time, in order to be liberated. Once acid deliveries return to required levels, the Company believes that the expected improvements in copper transferred to solution will require one or two quarters to be achieved.

The Company is very pleased to report that the workforce at Piedras Verdes recently accomplished two million man hours without a lost time accident.


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.

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

Rod Prokop Vice President, Investor Relations (602) 424-5483

Email Contact

Alan Edwards President and Chief Executive Officer

(602) 424-5488

Source: Frontera Copper Corporation

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