2006 year end financial results



    TSX: CCU

    DENVER, CO, March 15 /CNW Telbec/ - Constellation Copper Corporation
(CCU:TSX) is pleased to announce its financial results for the year ended
December 31, 2006. All dollar amounts are United States dollars unless
otherwise stated.

    
    Highlights
    ----------

    - Lisbon Valley mine produced 11.6 million pounds of copper, including
      3.5 million pounds during commercial production period effective
      November 1, 2006
    - Revenues were $10.0 million from the sale of 3.6 million pounds of
      copper cathode at an average price of $2.75 per pound during commercial
      production period
    - Net loss of $49.6 million in 2006, including realized loss of
      $17.8 million and unrealized loss of $25.5 million on derivative
      instruments put into place primarily as result of Lisbon Valley
      financing
    - Amended Lisbon Valley loan agreement for additional funding of
      $10.0 million and granted 2.6 million warrants to lender
    - Lenders exercised warrants and, as consideration, assigned to Company
      loans of $10.5 million, which were later cancelled
    - Other warrants and options were exercised for cash proceeds of
      $27.7 million
    - Completed a common share offering for proceeds of $19.2 million, net of
      issuance costs
    - In March 2007, closed on Cdn. $60.0 million convertible debenture
      offering with proceeds to be used to pay off Lisbon Valley financing,
      settle all or a portion of outstanding copper forward sale contracts
      and provide working capital

    Results of Operations
    ---------------------

    The Company had a net loss of $49,578,000 or $0.30 per share in 2006
compared to a net loss of $3,491,000 or $0.03 per share in 2005.
    In accordance with its accounting policies, the Company's Lisbon Valley
mine achieved commercial production effective November 1, 2006. Revenues
during commercial production were $9,992,000 from the sale of 3,633,000 pounds
of copper cathode at an average sale price of $2.75 per pound, net of
settlement adjustments. Costs of sales during commercial production were
$6,850,000, exclusive of $1,244,000 of related depreciation and amortization.
Costs of sales and related depreciation and amortization include cash and
non-cash average costs of $1.89 and $0.34 per pound, respectively.
    Results in 2006 included a realized loss of $17,767,000 and an unrealized
loss of $25,488,000 related to derivative instruments compared to an
unrealized loss on derivative instruments of $1,091,000 in 2005.
    In March 2006, the Company sold an investment for proceeds and a gain of
$696,000.
    General and administrative expenses were $3,269,000 in 2006, compared to
$2,315,000 in 2005. The increase in 2006 relates primarily to increased
professional fees, increased investor relations activity and director fees.
Stock-based compensation expense was $1,888,000 in 2006, compared with
$237,000 in 2005. Stock-based compensation expense is recognized over the
vesting period of options granted.
    Depreciation and amortization expense was $1,322,000 in 2006 compared to
$41,000 in 2005. Depreciation and amortization at Lisbon Valley from the
beginning of pre-commercial operating activities through October 2006 was
capitalized as mine development.
    Exploration expense, representing early stage exploration activities, was
$3,521,000 in 2006, compared to $227,000 in 2005.
    The Company had interest income of $535,000 in 2006, compared to $416,000
in 2005 and recorded a loss on foreign exchange of $60,000 in 2006 compared to
a gain of $4,000 in 2005.

    Financial Position
    ------------------

    At December 31, 2006, the Company held cash and cash equivalents of
$5,726,000, compared to $6,801,000 at December 31, 2005. Additionally, the
Company had restricted cash of $2,479,000 at December 31, 2006. At
December 31, 2006, working capital was $7,871,000.
    The Company used $40,217,000 in operating activities during 2006,
including $24,303,000 in building ore-in-process, material and supplies, and
finished goods inventories at the Lisbon Valley mine and $16,795,000 to settle
derivative instruments. Cash used in operating activities was $2,778,000 in
2005, including the initial build up of Lisbon Valley working capital.
    Cash used in investing activities amounted to $14,329,000 in 2006,
compared to $44,702,000 in 2005. The Company spent $5,015,000 on mineral
property additions and $8,738,000 on plant, property and equipment additions
during 2006. Also during 2006, the Company paid deposits of $888,000 on
additional leased mining equipment and paid a total of $351,000 into
restricted cash accounts, including earned interest.
    Cash provided by financing activities totaled $53,471,000 in 2006 compared
to $40,761,000 in 2005. In August 2006, the Company received net proceeds of
$19,171,000 from the sale of common stock. Proceeds from the exercise of
options and warrants during 2006 were $27,716,000. The Company received
$10,000,000 in connection with a 2006 amendment of its project financing
arrangement and repaid $3,300,000 of long-term debt during 2006, as scheduled.
The Company also received additional funding of $220,000 related to a TDA
grant in 2006.

    Subsequent Events
    -----------------

    On March 5, 2007, the Company amended its Lisbon Valley project loan
facility to increase the loan by $1,500,000. Proceeds were used primarily to
fund settlements of forward sale contracts originally due in February and
March 2007. In connection with the amendment, the Company issued 1,271,186
common share warrants to the lender. The warrants are exercisable at $1.18
(approximately Cdn. $1.36) per share and expire on March 5, 2008.
    As previously announced, a syndicate of underwriters agreed to purchase,
on a bought deal basis, Cdn.$60 million of convertible senior unsecured
debentures due March 31, 2012. The debentures bear interest at an annual rate
of 5.50%, payable semi-annually and are convertible at the option of the
holder into the Company's common shares at a conversion rate of 537.6344
shares per $1,000 of principal, which equates to a conversion price of
Cdn $1.86 per share. The underwriters were granted an option, for up to 30
days from closing, to purchase up to an additional 15% of the issue at the
issue price to cover over-allotments, if any.
    The proceeds of the offering, which closed on March 12, 2007, will be used
to repay the Lisbon Valley project financing of approximately $31,500,000,
including accrued interest, to cancel a portion or all of the outstanding
copper forward sales contracts related to the project financing and for
general corporate purposes. In connection with the repayment of the Lisbon
Valley project financing, the Company expects to write off approximately
$2,600,000 of deferred financing costs.
    Attached to this press release are the Company's comparative financial
statements for 2006 and 2005. For a more complete discussion, please refer to
the Company's audited financial statements and MD&A for the year ended
December 31, 2006 on the SEDAR website at www.sedar.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". 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 risk, 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.


    Constellation Copper Corporation
    Consolidated Balance Sheets

                                                              2006      2005
                                                                 $         $
    Assets

    Current assets
    Cash and cash equivalents                                5,726     6,801
    Inventories                                             31,150     2,383
    Prepaid expenses and other current assets                1,487       940
                                                          -------------------
                                                            38,363    10,124

    Property, plant and equipment                           84,357    81,808
    Mineral properties                                      12,121     7,041
    Deferred charges and other assets                        7,068     8,390
    Restricted cash                                          2,479     2,128
                                                          -------------------
                                                           144,388   109,491
                                                          -------------------
                                                          -------------------

    Liabilities

    Current liabilities
    Accounts payable and accrued liabilities                 7,977     8,197
    Derivative instruments                                  13,928       128
    Current portion of long-term debt                        8,587     2,756
                                                          -------------------
                                                            30,492    11,081

    Asset retirement obligations                             2,314     1,223
    Long-term debt                                          20,598    30,244
    Other long-term liabilities                             12,882       121
                                                          -------------------
                                                            66,286    42,669
                                                          -------------------

    Shareholders' Equity

    Capital stock                                          150,211    86,152
    Stock options                                            2,666       555
    Warrants and brokers' options                                -     5,312
    Deficit                                                (74,775)  (25,197)
                                                          -------------------
                                                            78,102    66,822
                                                          -------------------

                                                           144,388   109,491
                                                          -------------------
                                                          -------------------
    As at December 31, 2006 and 2005
    (in thousands of U.S. dollars)



    Constellation Copper Corporation
    Consolidated Statements of Operations and Deficit
    For the years ended December 31, 2006 and 2005

    (in thousands of U.S. dollars, except for share and per share amounts)

                                                              2006      2005
                                                                 $         $

    Revenues                                                 9,992         -
                                                          -------------------

    Cost and Expenses
      Cost of sales                                          6,850         -
      General and administrative                             3,269     2,315
      Stock-based compensation                               1,888       237
      Depreciation and amortization                          1,322        41
      Exploration                                            3,521       227
                                                          -------------------
                                                            16,850     2,820

    Other (Income) Expense
      Interest income                                         (535)     (416)
      Interest expense                                         636         -
      Foreign exchange loss (gain)                              60        (4)
      Gain on sale of investment                              (696)        -
      Realized loss on derivative instruments               17,767         -
      Unrealized loss on derivative instruments             25,488     1,091
                                                          -------------------
                                                            42,720       671
                                                          -------------------

    Loss for the year                                       49,578     3,491

    Deficit - Beginning of year                             25,197    21,706
                                                          -------------------

    Deficit - End of year                                   74,775    25,197
                                                          -------------------
                                                          -------------------

    Basic and diluted loss per share                          0.30      0.03
                                                          -------------------
                                                          -------------------

    Weighted average number of shares (000's)              165,142   119,286
                                                          -------------------
                                                          -------------------



    Constellation Copper Corporation
    Consolidated Statements of Cash Flows
    For the years ended December 31, 2006 and 2005

    (in thousands of U.S. dollars)
                                                              2006      2005
                                                                 $         $

    Cash flows from (used in) operating activities
      Loss for the year                                    (49,578)   (3,491)

      Items not affecting cash
        Depreciation and amortization                        1,322        41
        Stock-based compensation                             1,888       237
        Amortization of deferred financing costs               206         -
        Accretion of ARO                                        23         -
        Realized loss on derivative instruments                972         -
        Unrealized loss on derivative instruments           25,488     1,091

      Gain on sale of investment                              (696)        -

      Change in non-cash working capital items
        Inventories                                        (24,303)   (2,104)
        Prepaid expenses and other current assets             (547)     (421)
        Accounts payable and accrued liabilities             5,008     1,869
                                                          -------------------
                                                           (40,217)   (2,778)
                                                          -------------------

    Cash flows from (used in) investing activities
      Expenditures on mineral properties                    (5,015)   (3,341)
      Expenditures on plant, property and equipment         (8,738)  (48,463)
      (Increase) decrease in restricted cash                  (351)    9,539
      Purchase of mine reclamation insurance policy            (33)      (21)
      Deposit on leased equipment                             (888)   (2,416)
      Proceeds from sale of investment                         696         -
                                                          -------------------
                                                          -------------------
                                                           (14,329)  (44,702)
                                                          -------------------

    Cash flows from (used in) financing activities
      Proceeds from issuance of capital stock - net         19,171         -
      Proceeds from exercise of warrants and options        27,716    12,683
      Proceeds from long-term debt                          10,000    28,000
      Repayment of long-term debt                           (3,300)        -
      Proceeds from TDA grant                                  220       121
      Other                                                   (336)      (43)
                                                          -------------------
                                                            53,471    40,761
                                                          -------------------

    Decrease in cash and cash equivalents                   (1,075)   (6,719)

    Cash and cash equivalents - Beginning of year            6,801    13,520
                                                          -------------------

    Cash and cash equivalents - End of year                  5,726     6,801
                                                          -------------------
                                                          -------------------
    
    %SEDAR: 00002465E




For further information:

For further information: Constellation Copper Corporation: Gregory A.
Hahn, President & CEO; Michelle Hebert, Manager, Corporate Affairs, (720)
228-0055, Toll Free: 1-877-370-5400, Fax: (303) 863-1736,
info@constellationcopper.com, www.constellationcopper.com; Renmark Financial
Communications Inc.: Neil Murray-Lyon, nmurraylyon@renmarkfinancial.com;
Barbara Komorowski, bkomorowski@renmarkfinancial.com; Media - Lynda Martineau,
lmartineau@renmarkfinancial.com, (514) 939-3989, Fax: (514) 939-3717,
www.renmarkfinancial.com

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