Denver, Colorado, September 18, 2007 - Constellation Copper Corporation (CCU :TSX) (the "Company") reported today on the progress of the production enhancement projects underway at Lisbon Valley As noted in the 2007 second quarter report, the Company's immediate focus has been increasing the amount of contained pounds of copper placed on the leach pad and expediting construction of an Intermediate Leach Solution (ILS) system.
During July and August 2007, Lisbon Valley commissioned a fleet of three 100-ton capacity trucks and started hauling and stacking primary crushed ore onto an 800,000 ton capacity section of the leach pad. Previously, all ore was processed through a secondary crushing system before being loaded on the leach pad.
The decision to leach primary crushed ore resulted from the inability to process all of the ore being mined through the secondary crushing and stacking system. Any excess ore is now being hauled directly to the leach pad, with a goal of placing at least 6 million pounds of contained copper per month on the pad. As of the end of August, 383,000 tons of primary crushed ore, containing approximately 5 million pounds of copper, had been stacked. Initial leaching of this ore began during the first half of September 2007. Continuation of the truck stacking program will depend on an assessment of the effectiveness of the program once we have seen the initial leach results.
Traditional secondary crushing and stacking of ore has continued and a combined total of approximately 13 million pounds of contained copper was placed on the leach pad in July and August of 2007. The monthly average of 6.5 million pounds of contained copper placed on the pad in July and August is 100% higher than the average during the first six months of 2007, when lower grade ore was being mined and limitations on the crushing and stacking systems were being experienced. The mining of higher grade ore is expected to continue through the remainder of 2007 and into 2008.
Offsetting the increase in contained pounds being loaded on the leach pad is an increase in the percentage of sulfide ore as we mine deeper in the pit. Sulfide ore has a slower leach cycle than oxide ore. The average of sulfide ore was 27% year to date at the end of August, compared to 7% for all of 2006. The percentage of sulfide ore is expected to increase in the remainder of 2007 and through the remaining mine life.
As discussed in the 2007 second quarter report, the ILS system is expected to double the amount of ore maintained under leach and help offset the expected slower recovery of sulfide copper. In addition, copper concentration in the Pregnant Leach Solution (PLS) should increase significantly as a result of recycling leach solution back over the leach pads before it is processed through the SX/EW facility. The earthwork part of the ILS project was completed in early September 2007, and in mid-September the contractor will start lining the pond, assembling the pumping plant, and installing the large piping system
required to facilitate doubling the leach solution flow rate. Lisbon Valley expects to start the ILS system in November 2007, and have it at full capacity by mid-spring 2008.
In order to mitigate many of the problems Lisbon Valley experienced last winter with low solution temperatures, plastic insulating balls are being installed on all three solution ponds. Another cold weather mitigation project, completed in the spring 2007, was converting the solvent extraction plant to parallel flow to allow slower solution flows through each SX extractor, while increasing the total flow rate 16%.
Lisbon Valley copper cathode production has been limited to between 1.6 and 1.8 million pounds per month as a result of a low copper grade of the PLS being processed through the SX/EW facility. Placing significantly more pounds of copper in ore on the leach pad and putting the ILS system into operation is expected to significantly increase copper cathode production. We should be able to determine the sustainable production level for the Lisbon Valley Mine once the effects of the current enhancements are known.
The Company continues to settle its forward sales contracts monthly as they come due, at approximately $1.8 million per month at current market prices. Outstanding forward sale contracts, at an average settlement price of $1.90 per pound, as well as lower than expected cathode production, have limited the Company's ability to participate in the current favorable copper price environment. Capital costs of production improvements have been in line with estimates, but have been substantial during the third quarter of 2007. In addition, working capital expenditures increased as a result of additional mining costs associated with doubling the pounds placed on the pad.
The Company's cash balance was $15.2 million at the end of August 2007 compared to $25.8 million at June 30, 2007. In case fourth quarter production does not increase from current levels, the Company is conserving cash by delaying non-critical exploration and development activities, reducing outside consulting expenditures, and deferring capital expenditures not directly related to production enhancements. The Company is also evaluating strategic financing alternatives in the event that additional cash may be needed to continue normal operations into 2008.
For further information please contact:
Constellation Copper Corporation
Patrick James, CEO
Michelle Hebert, Manager, Corporate Affairs
Tel: (720) 228-0055
Toll Free: 1-877-370-5400
Fax: (303) 863-1736
info@constellationcopper.com
www.co nstellationcopper.com
Renmark Financial Communications Inc.
Neil Murray-Lyon : nmurraylyon@renmarkfinancial.com
Barbara Komorowski : bkomorowski@renmarkfinancial.com
Media - Vanessa Napoli : vnapoli@renmarkfinancial.com
Tel.: (514) 939-3989
Fax: (514) 939-3717
www.renmarkfinancial.com
This press release contains certain forward-looking statements. In certain cases, forward-looking statements can be identified by the use of words such as "plans", "expects" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". & nbsp; Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such factors include, among others, risks related to changes in commodity and power prices, changes in interest and currency exchange rates, inaccurate geological and metallurgical assumptions (including with respect to the size, grade and recoverability of mineral reserves and resources), unanticipated operational difficulties (including failure of plant, equipment or processes to operate in accordance with specifications, cost escalation, unavailability of materials and equipment, delays in the receipt of government approvals, industrial disturbances or other job action, and unanticipated events related to health, safety and environmental matters), political r isk, social unrest, and changes in general economic conditions or conditions in the financial markets. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.
