Positive feasibility at Piedras Verdes

Frontera Copper is ready to head to the banks with a feasibility study for its Piedras Verdes copper project 21 km north-northwest of Alamos, Sonora state, Mexico.

The study was completed by consulting firm M3 Engineering & Technology of Tucson, Arizona. It used a copper price of US95 per lb.

Mineable reserves are estimated at 191 million tonnes grading 0.36% copper. Further resources adjacent to the open pit are still to be determined.

The study compiled 70,000 metres of drilling, extensive metallurgical testing and included process design work along with infrastructure requirements. In addition costs were analyzed and a technical report was prepared.

The deposit will be open-pit mined, and the ore heap-leached prior to electrowinning. Copper cathode will be produced on site.

About 70 million lbs. of copper cathode will be produced annually for 12 years. The estimated life-of-mine cash cost per lb. of copper cathode produced is US52. This translates into an internal rate of return of 18.3%.

The company has bought 35 homes in the village of Piedras Verdes; 45 remain inhabited. The village has agreed in principle to be relocated because a portion of the deposit underlies it.

Production is expected to commence in early 2006 (if financing is in place by the end of this year). An environmental impact statement is being prepared and an application for an environmental permit should be filed by the end of this year. Also large diameter water well pump tests are underway and results from three wells are positive.

Frontera Copper was incorporated in 2002 to purchase and bring the Piedras Verdes project into production.

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