Frontera Copper Announces Updated Independent NI43-101 Technical Report
The Report is co-authored by Brian Kennedy, P.Eng., Matt Gray, P. Geol. and John Nilsson, P.Eng and updates reserve estimates, production rates, expected copper recoveries, operating costs and sustaining capital requirements for the mine, and provides an overall economic analysis of the mine along with an analysis of economic sensitivity factors.
As discussed in the Report, current pit designs and a mine plan forecast the leaching of 125.1 million tonnes (Mt) of ore at an average grade of 0.40% copper over a nine-year period. With copper recovery projected to average 61.7% annual production of approximately 70 million lbs of cathode copper is projected. The total mineralized material within the final pit design is 534 Mt, resulting in an overall strip ratio of 3.27:1. The run-of-mine ore tonnage placed on the leach pad varies by year based upon ore grade and metallurgical ore type. The rate of ore placement on the heap varies from 10.9 to 17.2 Mt per year. Between 2009 and 2024, when copper extraction is forecast to be completed, a total of 726.2 million lbs of copper will have been produced and sold (including existing inventory). The sustaining capital requirements for the mine over that period are estimated at $135 million excluding reclamation of some $27 million. (all monetary figures herein are US$)
The estimated average reported copper cash cost for the life-of-mine is $1.41/lb of cathode copper produced, including royalties. Using a copper price of $3.30 for 2010, $3.20 for 2011, $2.35 for 2012 and $2.00/lb onward, the mine returns a projected pre-tax net present value of $148M using a 12.5% discount rate. The Report assumes that the Company has been able to expend all capital expenditures and other operating expenses necessary to bring the mine to full operation during the forecast period. The Company continues to actively pursue recapitalization initiatives that would allow for the most productive operation of its business.
Brian Nethery, P.Eng., is the qualified person who has reviewed and approved on behalf of the Company the technical contents of this news release which have been summarized from the Report.
Cautionary Statement on Forward Looking Information
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.
Steve Vanry, Chief Executive Officer
FRONTERA COPPER CORPORATION 14350
N. Frank Lloyd Wright Blvd, Suite 9
Scottsdale, AZ 85260 USA
For more information, please contact
Frontera Copper Announces Updated Independent NI43-101 Technical Report
Frontera Copper Corporation
Mark Distler CFO
(480) 477-6789
Frontera Announces Availability of Additional Information on Its Website
(signed) Mark Distler
Chief Financial Officer
For more information, please contact
Frontera Copper Corporation
Mark Distler
CFO
(480) 477-6789
Frontera Copper Announces Proposed Note Exchange Offer
The Note exchange will be proposed and effected pursuant to a statutory Plan of Arrangement (the "Plan") under the Business Corporations Act (British Columbia) which is a Court supervised process. The Plan requires that Note holders support the Plan by a margin of at least 75% by value and 50% by numbers of those Note holders who vote in person or by proxy at the Note holder Meeting which will be convened to consider the Plan and is further described below.
Details of Exchange Offer
For each C$1,000 in principal amount of the Old Notes, Frontera is offering:
- US dollar equivalent at closing of 85% in principal amount of New Notes;
- An additional Early Support Premium of 5% in principal amount of New Notes to holders who agree to vote in favour of the Plan at least 10 days before the Meeting bringing their amount to 90%. The premium is to encourage early support that will provide the benefit of greater certainty to the entire restructuring process;
- Past due interest on the Old Notes accrued to the date of completion of the exchange, will be paid in cash; and
- The New Notes will pay interest at 10% but that may be reduced to 6% if copper prices fall below US$2.90 per pound for certain stated periods.
The New Notes will be secured on a second lien basis by the Piedras Verdes mine assets ranking behind only the Mexican commercial bank which granted the credit facility to Cobra del Mayo and Frontera. Additional terms of the New Notes include that they will be callable by the Company at 105% during the first 12 months, 102% in year 2 and at 100% thereafter and will be repaid in tranches of 25% every 6 months starting 18 months from issuance. The repayment dates may be extended by one six month period in the event copper falls below US$2.35 for a certain period. The New Notes will not be stock exchange listed nor Canadian RRSP eligible. The restructuring Plan will also involve a wind-up of Frontera and consequential amendments to the Indentures governing the Notes and the commercial banking agreements in order to allow Cobre del Mayo, as the issuer of the New Notes, to have greater flexibility in borrowing for operating and enhancing the Piedras Verdes mine.
The Company will be convening a meeting of Note holders for late February 2010 at a place, time and pursuant to procedures determined by the British Columbia Supreme Court in an interim court order to be sought in the next week or so. An information circular further detailing the proposal and Plan, will be mailed to Note holders and be available for download on www.sedar.com 21 days before the meeting. Further details will be provided in a press release at the time of the issuance of the Circular.
Update on Technical Report of Piedras Verdes Mine
The Company has received an advanced draft of the independent technical report co-authored by qualified persons Brian Kennedy, P.Eng., Matt Gray, P. Geol. and John Nilsson, P.Eng updating operations at the Piedras Verdes mine, including anticipated copper recoveries, reserve estimates and economic analyses. Frontera expects to receive and publicly file the final report in the next few days.
Cautionary Statement on Forward Looking Information
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.
Steve Vanry,
Chief Executive Officer
For more information, please contact
Frontera Copper Corporation
Mark Distler
CFO
(480) 477-6789
Frontera Copper Receives Series 1 Notes Default Notice
The Company anticipates announcing its proposed restructuring of the Series 1 and Series 2 Notes along with other information on January 18, 2010.
Cautionary Statement on Forward Looking Information
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. Such forward looking statements are based on assumption that the Company's management believes to be reasonable based on available information but forward looking statement are inherently uncertain and need to be read accordingly.
For further information, please contact Mark Distler, CFO at (480) 477-6789.
(signed) Steve Vanry
Chief Executive Officer
FRONTERA COPPER CORPORATION
14350 N. Frank Lloyd Wright Blvd, Suite 9
Scottsdale, AZ 85260 USA
Credit Agreement
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