Constellation drills oxide copper at San Javier (August 14, 2006)

CONSTELLATION COPPERConstellation Copper's Lisbon Valley mine in Utah.

CONSTELLATION COPPER

Constellation Copper's Lisbon Valley mine in Utah.

Vancouver — Initial core drilling by Constellation Copper (CCU-T, CCUDF-O) at its San Javier oxide copper project, in southern Sonora state, Mexico, returned an average thickness of 123 metres grading 0.46% copper from seven holes. Mineralization was encountered from an average depth of about 17 metres.

The drill program was designed to test an area of copper oxide-stained cliff faces around a hill about 200 to 300 metres in height. The company believes the area represents an iron-oxide copper-gold (IOCG) deposit with an exposed strike of up to 1.5 km, a width of up to 600 metres and about 100 to 200 metres thick.

Host rock in the deposit is a volcanic breccia containing abundant specular hematite plus the oxide copper minerals chrysocolla and tenorite within the upper oxidized zone and chalcopyrite in the deeper sulphide zone.

Constellation is adding a reverse-circulation rig to its drill program en route to producing a copper oxide resource estimate by year-end. Additionally, it will conduct column leach tests and begin engineering programs for a preliminary assessment of a possible open-pit, heap-leach operation at San Javier producing cathode copper by solvent extraction- electrowinning. The company is targeting an oxide orebody of about 100 to 150 million tonnes grading around 0.3% copper that will likely have a low strip ratio due to the surface topography.

The San Javier project is located close to infrastructure with a community, paved highway, high-voltage power and water source all nearby. The project (previously called Cerro Verde) was previously explored by Industrias Peoles (ipoaf-o) in the 1970s and by Phelps Dodge (pd-n) from 1995 to 1998, with a total of 25 widely spaced drill holes.

In late 2004, Constellation negotiated two option-to-purchase agreements covering the main project area. The option has total cash payments of US$1.23 million, staged over five years, towards complete buyout of the mineral rights and with no retained royalties.

Elsewhere, the company began cathode copper production from its Lisbon Valley mine in southeastern Utah earlier this year and has been conducting a feasibility study on its Terrazas copper-zinc project in Chihuahua state, Mexico.

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