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Brisbane, 2 September 2011

Xstrata Copper announces increases in both the total Mineral Resource estimate and Measured and Indicated Resources for the Horse-Ivaal-Trukai (HIT) deposit at the Frieda River copper-gold project in Papua New Guinea.

The new HIT resource estimate comprises a total of 2,090 million tonnes at a grade of 0.45% copper, 0.22 grams per tonne gold and 0.7 grams per tonne silver, using a copper cut-off grade of 0.2% copper. This represents 9.4 million tonnes of contained copper metal and 14.8 million ounces of contained gold metal.

Contained copper has increased by 10% in the total Mineral Resource and by 7% in the Measured and Indicated resource categories, compared to the previous update released in February 2011. Importantly, the Measured category now comprises 37% of the estimated total Mineral Resource, a significant increase on the estimate released in February 2011 of 16%.  The new estimate includes the results of 139,000 metres of drilling, with 39,000 metres added to the drill database since the last estimate.

Xstrata Copper Executive General Manager, Project Development Asia Pacific, Peter Forrestal, said the latest results continued to confirm Frieda River’s potential as a significant copper-gold resource in the Asia-Pacific region.

“Since assuming management control of the Frieda River project in January 2007, we have conducted a vigorous evaluation programme,” Mr Forrestal said.

“The drilling and technical studies have been completed for the Feasibility Study, which is due to be delivered in January 2012. We continue to undertake extensive environmental baseline studies and stakeholder engagement activities for the project’s Environmental and Social Impact Assessment,” he said.

Table 1* Horse-Ivaal-Trukai Mineral Resources at 0.20% Cu cut-off as at 25 August 2011

* Horse-Ivaal-Trukai is a copper-gold porphyry deposit located on the border of Sandaun and East Sepik provinces in Papua New Guinea, approximately 200 kilometres from the coast and 70 kilometres from the navigable Sepik River. The Mineral Resource estimate is reported at a 0.2% copper cut-off grade and is shown on 100% ownership basis as of 25 August 2011. The estimate is constrained by topography and an economic pit shell calculated with Measured, Indicated and Inferred Resources. Numbers and totals may not match exactly as they are rounded for tabulation.  The full process of resource estimation including 3D geology modelling, geostatistics, block grade interpolation and resource classification has been updated to reflect changes in technical and economic parameters used to calculate the Resource pit envelope including geotechnical parameters, operating costs, metal prices, and classification criteria. The HIT deposit has been drilled to an approximate grid of 75 by 75 metres at the deposit centre in close coincidence with the resource classified as “Measured”.  Resource Classification follows the definitions provided by the JORC Code. Due to the uncertainty that may be attached to some Inferred Mineral Resources, it cannot be assumed that all or part of an Inferred Mineral Resource will necessarily be upgraded to an Indicated or Measured Resource after continued exploration.

* The information in this press release that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Mr. Raul Roco, who is a Member of The Australasian Institute of Mining and Metallurgy. Mr. Roco is a fulltime employee of the company. Mr. Roco has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr. Roco consents to the inclusion in the press release of the matters based on his information in the form and context in which it appears.

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Notes to editors

ABOUT XSTRATA PLC

Xstrata is a global diversified mining group, listed on the London and Swiss Stock Exchanges. Headquartered in Zug, Switzerland, Xstrata maintains a meaningful position in seven major international commodity markets: copper, coking coal, thermal coal, ferrochrome, nickel, vanadium and zinc with additional exposure to gold, cobalt, lead and silver. The Xstrata Group also comprises a growing platinum group metals business, iron ore projects, recycling facilities and a suite of global technology products, many of which are industry leaders. The Group's operations and projects span 21 countries.

ABOUT XSTRATA COPPER

Xstrata Copper is the fourth largest global copper producer with attributable mined production in 2010 of 913,500 tonnes of copper in cathodes and concentrates. The company is also one of the world’s largest producers of smelter and refined copper, including from third party materials.

Headquartered in Brisbane, Xstrata Copper is one of the commodity business units within the major global diversified mining group Xstrata plc. Its mining and metallurgical operations and development projects span eight countries: Argentina, Australia, Canada, Chile, Peru, the Philippines, Papua New Guinea and the USA. Its operations and projects are administered through a regional divisional management structure, which ensures that critical decisions are taken close to the related businesses. It also has a recycling business (Xstrata Recycling) with plants in the United States and offices in Canada and Asia. 

ABOUT THE FRIEDA RIVER PROJECT

The Frieda River copper-gold project is located on the border of the Sandaun and East Sepik provinces in Papua New Guinea (PNG), about 200 kilometres from the coast and 70 kilometres from the navigable Sepik River. It is a joint venture between Xstrata Frieda River Limited (81.82%) and Highlands Frieda Ltd, a wholly owned subsidiary of Highlands Pacific Ltd, (18.18%). The project is managed by Xstrata Copper and is currently in the feasibility study stage, due for completion in January 2012.