Constellation Copper Corporation Provides Operational and Financial Update and Default Status Report



    TSX: CCU

    DENVER, CO, Nov. 23 /CNW Telbec/ - Constellation Copper Corporation (the
"Company") (CCU:TSX) is providing an update on the status of its Lisbon Valley
Mine operations and on its financial situation.

    Operational Update

    The Lisbon Valley Mine (LVM) has focused on three major initiatives over
the past six months. The first initiative focused on the placement of copper
ore available for leaching on the heap leach pad. During the past
4 1/2 months, over 28 million pounds of contained copper have been mined and
placed on the heap leach pads. Of that total, 11.6 million pounds of copper
contained in primary crushed ore was placed on the heap with 100-ton trucks
and 16.4 million pounds of copper contained in ore that was concurrently
crushed and stacked. Initial leaching of the truck dumped material began at
the end of September, and most of that ore is now under leach. Mining and
placement of this large inventory of ore has resulted in a significant
expenditure of cash, and a resulting increase in the working capital of the
mine.
    Leach results to date on the trucked material appear very similar to
those experienced from ore that was concurrently crushed and stacked. Although
leach results over this brief time period do not provide sufficient data from
which to draw definitive conclusions regarding ultimate recoveries, it does
appear there is no significant difference in leach performance between the two
methods of ore placement, however the overall leaching recovery rate at the
LVM continues to be significantly slower than expected.
    Another initiative related to the actual mining operation. Critical to
the mining and placement of these large quantities of ore over the past
4 1/2 months was the improvement of the overall effectiveness of the mining
operation. Total daily tonnage of ore and waste moved has increased 53%
between July and November, resulting in a current average mining rate of over
56,000 tons per day.
    The last major initiative was the construction and commissioning of the
Intermediate Leach Solution ("ILS") system, the purpose of which is to improve
the grade of the pregnant leach solution ("PLS"). Commissioning started on
November 20, 2007, at an average pumping rate of about 25% of the design
volume. It will take several months for the system to reach full flow capacity
but initial improvement in the PLS grade is expected during December. Due to
related actions, the maximum PLS flow through the solvent extraction plant has
been increased by 6% at minimal cost.
    Despite the increase in placement of copper on the leach pads, production
for the past four months has been disappointing, resulting in sales of an
average of 1.5 million pounds of copper per month. One reason for this slow
production is a result of placing a higher percentage of sulfide
mineralization on the leach pads, as sulfides leach significantly slower than
the oxide ores LVM has been mining. Since the end of June, the sulfide portion
of the copper content of the ore placed on the pad has increased from 22% to
72%. This increase was expected, as the sulfides are a major portion of the
ore reserve at the LVM. The lack of a corresponding increase in sales revenue
to balance the increased working capital has resulted in a significant use of
cash, as has the construction of the ILS system to help alleviate the slower
recovery.

    Writedown of Assets

    As a result of the historical poor performance of the LVM and the lower
production expectations, management believes it will be necessary to write
down a material portion of the investment in the LVM, the magnitude of which
has yet to be determined. An asset impairment charge will be recognized and
included in the Company's third quarter interim financial statements for the
period ended September 30, 2007.

    Financial Update

    As announced on September 18, 2007, management has been evaluating
strategic financing alternatives to provide additional cash to continue
operations at the LVM until these initiatives can improve cash flow to a
sustainable level. To that end the Company has retained GMP Securities, L.P.
to assist with the evaluation of strategic alternatives, which includes
identifying and securing financing to enable the completion of the
improvements at the LVM and increase cash flows. In addition, an Independent
Committee of the Board of Directors has been formed and a data room has been
created. Several entities have been invited into the process, including both
financial and strategic firms of which many have visited our properties. At
this time the Company is considering any and all means of obtaining the
financing necessary to continue operations as well as looking at significant
modifications to operations to improve cash flow.
    Management is in negotiations with the hedging counterparty (for the
hedges due to be completed by the end of 2008) regarding a restructuring of
the payment terms for the hedges and including a deferral of the payment that
was due on November 2, 2007. The Company has obtained a verbal temporary
waiver of the payment that was due on November 2, 2007. The next hedge payment
estimated to be approximately US$2 million, is due on December 4, 2007.
Monthly payments by the Company to the hedging counterparty have averaged
nearly US$2 million over the past 6 months. The Company's cash balance at
November 21, 2007 was US$5.9 million. The Company requires additional cash in
order to continue operations at the LVM. The amount of cash required is
dependent on several factors, including the structure of the hedge payments
going forward.
    Once the Company has completed the restructuring of the hedge payment
terms, and determined the magnitude of the write down of the LVM, the Company
expects to be in a position to finalize and issue its unaudited financial
statements and Management Discussion & Analysis for the third quarter ended on
September 30, 2007.

    Default Status Report

    As announced on November 9, 2007 and for the reasons set forth in that
announcement, the Company indicated that it would not be filing its third
quarter unaudited financial statements by the required filing date under
applicable Canadian securities laws. The Company is providing an update in
accordance with CSA Staff Notice 57-301 Failing to File Financial Statements
on Time - Management Cease Trade Orders. In accordance with Appendix B of
CSA Policy 57-301:

    
    1. The Company advises that other than as set out in this press release,
       there is no material change in the information contained in the Notice
       of Default dated November 9, 2007.

    2. The Company expects to file its interim financial statements for its
       third quarter ended September 30, 2007 and Management Discussion &
       Analysis related thereto on or before January 14, 2008 as originally
       contemplated.

    3. The Company advises that there are no other financial statements that
       are not expected to be filed within the time period set out by the
       security regulatory authorities.

    4. The Company advises that there is no other material information
       concerning the affairs of the Company that has not been generally
       disclosed.

    5. The Company intends to satisfy the provisions of CSA 57-301 Appendix B
       Default Status Reports on a bi-weekly basis as long as it remains in
       default of the financial statement filing requirement.
    

    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.
    %SEDAR: 00002465E




For further information:

For further information: Constellation Copper Corporation: Patrick M.
James, Chairman & 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 - Vanessa Napoli:
vnapoli@renmarkfinancial.com, (514) 939-3989, Fax: (514) 939-3717,
www.renmarkfinancial.com

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Constellation Copper Corporation

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