Resource expansion for Xstrata’s Peru copper

Xstrata Copper has made an important resource expansion in its Las Bambas copper district and confirms a substantial mineral resource at the Antapaccay copper deposit, both in southern Peru. Antapaccay is 9 km from Xstrata Copper’s Tintaya copper mine. Since acquiring the project in August 2004, Xstrata Copper has drilled a total of 156,000 m at Las Bambas. Based on initial successes, the company plans to conduct a further 85,000 m of drilling in 2007, mainly on the initial three mineralized systems.

Xstrata Copper Chief Executive Charlie Sartain: “The successful results of the 2006 exploration programme at Las Bambas, together with the publication of a substantial mineral resource so close to existing infrastructure at Tintaya, has confirmed southern Peru as a significant strategic region for Xstrata. The identification of one billion tonnes of combined mineral resources in the region at attractive grades, with substantial further exploration potential and a strong existing operating and infrastructure base, places us in an ideal position to pursue rapid, profitable growth in southern Peru.”

The 2006 exploration programme at Las Bambas, which included 100,000 m of drilling, established an indicated and inferred resource of 508 Mt at 1.14% Cu using a 0.5% cut-off grade. This represents an increase of 69% over the mineral resource of 300 Mt at 1.1% Cu published in March 2006. In addition, the new resource includes estimated average grades for molybdenum of 220 ppm Mo and for gold of 0.11 g/t Au.

Included in this mineral resource, which covers three mineralized systems (Chalcobamba, Ferrobamba and Sulfobamba), are 377 Mt grading 1.27% Cu, 214 ppm Mo and 0.13 g/t Au at the Ferrobamba deposit. Of this, 239 Mt at 1.36% Cu, 220 ppm Mo and 0.14 g/t Au is contained in skarn mineralization. “The presence of substantial volumes of high grade skarn-style copper mineralization, with significant grades of molybdenum and gold, supplemented with large, lower grade copper porphyry mineralization, confirms the significant potential of Las Bambas district,” Sartain said.

Xstrata Copper acquired the Antapaccay copper-gold prospect through its acquisition of the Tintaya copper mine from BHP Billiton in June 2006. Historically more than 90,000 m have been drilled at Antapaccay, which consists of two adjacent mineral structures: Antapaccay North and Antapaccay South. Following detailed evaluation of work undertaken to date, Xstrata Copper has been able to establish a total mineral resource of 472 Mt at 0.74% Cu.

“The Antapaccay deposit holds the potential to increase production and extend the life of our Tintaya assets, which are located only 9 km away,” commented Sartain. The Tintaya operations comprise an open pit, a processing plant producing copper concentrate, a heap leaching operation and a SX-EW plant producing copper cathodes and substantial transport and administrative infrastructure. The operation achieved record mining and mill processing rates during the second half of 2006. During 2007, Xstrata Copper will conduct 40,000 m of drilling to confirm and upgrade the Antapaccay resource as part of a prefeasibility study into the development of the project.