Peru Copper reports 2006 year end financial results



    VANCOUVER, April 2 /CNW/ - Peru Copper Inc. (TSX:PCR/AMEX:  CUP/BVL:CUP)
("Peru Copper" or the "Company") today filed its financial results for the
year ended December 31, 2006. Complete financial statements will be included
in the Company's 2006 Annual Report to be mailed to shareholders. All monetary
amounts are expressed in United States dollars unless otherwise stated.
    Peru Copper is involved in the acquisition and exploration of potentially
mineable deposits of copper in Peru. On June 11, 2003, Peru Copper entered
into the Toromocho Option Agreement ("Toromocho Option") with Empresa Minera
del Centro del Peru S.A. ("Centromin"), a Peruvian state-owned mining company,
whereby Centromin granted the Company the option to acquire its interest in
the mining concessions and related assets of the Toromocho Project.

    Financial Results
    -----------------

    The Company prepares its financial statements in U.S. dollars and in
accordance with accounting policies and practices generally accepted in Canada
("Canadian GAAP"). In 2006, the Company recorded a loss of $3.3 million as
compared to a loss of $3.4 million in 2005.
    Contributing to the Company's loss was an increase of $0.8 million in
administrative expenses from $4.3 million in 2005 to $5.1 million in 2006.
Peru Copper expenses all costs not directly related to its exploration and
drilling efforts at the Toromocho Project. The increase in administration
expenses was primarily due to increases in stock-based compensation and
professional fees.
    Stock based compensation increased by $0.3 million from $1.8 million in
2005 to $2.1 million in 2006. The increase was due to the vesting of options
to directors, officers, employees and consultants. The Company capitalizes all
stock-based compensation of the vesting of options to employees and
consultants that work directly on the Toromocho Project and expenses all other
stock-based compensation.
    Professional fees increased by $0.4 million to $1.4 million due to costs
associated with Sarbanes-Oxley certification, an increase in costs associated
with investment banking expenses and other fees related to the continued
development of the Toromocho Project.
    Additionally, the Company incurred small increases in management fees of
$0.3 million and travel expenses of $0.1 million between years ended 2005 and
2006 due to new management members joining the Company and travel related to
the Feasibility Study.
    Expenses were offset by $1.8 million of interest earned on cash balances
and a $0.2 million foreign exchange gain.

    Capitalized Expenses
    --------------------

    All of the Company's $33.0 million of exploration expenses during 2006
have been capitalized under Canadian GAAP to exploration properties and all
administration expenses of the Company have been expensed.
    The bulk of the capitalized expenses for 2006 were related to
$17.9 million in acquisition and lease costs associated with the acquisition
of Minera Centenario S.A.C. ("Centenario"). In accordance with the share
purchase agreement signed with Austria Duvaz, the Company gained 100% control
of Centenario and its stake in 30 concessions located in the Morococha mining
district.
    Also, contributing to the capitalized expenses were supplies and general
expenses of $5.6 million that were related to costs associated with the
accelerated development of the Toromocho Project. Salaries and consulting
totaled $4.2 million for the year ended December 31, 2006 due to the
approximately 55 employees and several consultants working on the Toromocho
Project.
    Additional costs included drilling expenses of $1.9 million, value added
taxes of $1.4 million due to the increased purchases of supplies and there was
a $1.0 million in stock-based compensation for workers and consultants working
directly on the project.
    The increase in capitalized expenses of $15.8 million from the year-ended
2005 to the year-ended 2006 was largely related to the acquisition of
Centenario along with increases in stock-based compensation and general
Toromocho Project expenses. These increases were partially offset by a
reduction of $4.3 million in drilling expenses and a reduction of $0.5 million
in assay sampling and testing from year-end 2005 to year-end 2006.

    Analysis of the Fourth Quarter 2006

    For the fourth quarter of 2006 the Company recorded a loss of
$0.9 million as compared to a loss of $1.1 million in the fourth quarter of
2005. The difference primarily relates to an increase in interest income of
$0.3 million, from $0.2 million in the fourth quarter of 2005 to $0.5 million
in the current quarter. This increase in interest income was off set by
increases in expenses between the current quarter and the fourth quarter of
2005.
    In the current quarter, stock-based compensation of $0.6 million was
recorded as compared to $0.5 million in the fourth quarter of 2005. Management
Fees also increased from a recorded $0.2 million in the fourth quarter of 2005
to $0.3 million in the current quarter. Other significant increases included
travel expenses, which increased from $0.06 million in the fourth quarter 2005
to $0.09 million in the present period and professional fees, which increased
by $0.02 million during the same timeframe.
    All of the Company's $23.5 million of exploration expenses during the
quarter have been capitalized under Canadian GAAP as exploration properties.
This $23.5 million was comprised of four principal expenses: acquisition and
lease, salaries and consulting and costs associated with supplies and general
expenses. The $17.2 million acquisition and lease costs were for the
acquisition of Minera Centenario S.A.C. as outlined in the share purchase
agreement with Austria Duvaz, and for the settlement of the land dispute with
the Pucara community. Supplies and general expenses for the period were
$2.6 million, and salaries and consulting expenses totaled $1.9 million for
the current quarter.
    Expenses for the fourth quarter of 2006 totaled $1.4 million, up slightly
from the $1.3 million in the same period in 2005. This slight increase relates
to a $0.1 million increase in stock-based compensation from $0.5 million in
the fourth quarter of 2005 to $0.6 million for the same quarter in 2006. There
were also minor increases in professional fees of $0.02 million and management
fees of $0.05 million between the fourth quarter 2005 and the current quarter.
These increases were partially offset by a reduced foreign exchange loss of
$0.07 million, from a recorded $0.1 million in 2005 to $0.03 million for the
same period in 2006.

    Cautionary Note to U.S. Investors - The United States Securities and
    Exchange Commission permits U.S. mining companies, in their filings with
    the SEC, to disclose only those mineral deposits that a company can
    economically and legally extract or produce. We use certain terms in this
    press release, such as "mineral deposit", that the SEC guidelines
    strictly prohibit U.S. registered companies from including in their
    filings with the SEC. U.S. Investors are urged to consider closely the
    disclosure in our Form F-3 Registration Statement, File No. 333-121527,
    which may be secured from us, or from the SEC's website at
    http://www.sec.gov/edgar.shtml.

    CAUTIONARY NOTE REGARDING FORWARD LOOKING-STATEMENTS

    This news release contains "forward-looking statements" within the
meaning of the United States Private Securities Litigation Reform Act of 1995
and applicable Canadian securities legislation. Forward-looking statements
include, but are not limited to, statements with respect to the future price
of copper and molybdenum, the timing of exploration activities, the mine life
of the Toromocho Project, the economic viability and estimated internal rate
of return of the Toromocho Project, the estimation of mineral reserves and
mineral resources, the results of drilling, estimated future capital and
operating costs, future stripping ratios, projected mineral recovery rates and
Peru Copper's commitment to, and plans for developing, the Toromocho Project.
Generally, these forward-looking statements can be identified by the use of
forward-looking terminology such as "plans", "expects" or "does not expect",
"is expected", "budget", "scheduled", "estimates", "forecasts", "intends",
"anticipates" or "does not anticipate", or "believes", or variations of such
words and phrases or state that certain actions, events or results "may",
"can", "could", "would", "might" or "will be taken", "occur" or "be achieved".
Forward-looking statements are subject to known and unknown risks,
uncertainties and other factors that may cause the actual results, level of
activity, performance or achievements of Peru Copper to be materially
different from those expressed or implied by such forward-looking statements,
including but not limited to: risks related to the exploration and potential
development of the Toromocho Project, risks related to international
operations, the actual results of current exploration activities, conclusions
of economic evaluations, changes in project parameters as plans continue to be
refined, future prices of copper, silver, molybdenum and gold, as well as
those factors discussed in the section entitled "Risk Factors" in the Form F-3
as on file with the Securities and Exchange Commission in Washington, D.C. and
in the section entitled "Narrative Description of the Business - Risks of the
Business" in the Annual Information Form of the Company dated March 24, 2005.
Although Peru Copper has attempted to identify important factors that could
cause actual results to differ materially from those contained in
forward-looking statements, there may be other factors that cause results not
to be as anticipated, estimated or intended. There can be no assurance that
such 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. Peru Copper does not undertake to update any forward-looking
statements that are incorporated by reference herein, except in accordance
with applicable securities laws.





For further information:

For further information: Patrick De Witt, Director of Investor
Relations, at (604) 689-0234, or patrick@perucopper.com

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Peru Copper Inc.

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