Full Description

Southern Copper Corporation, incorporated in 1952, is an integrated copper producer. The Company produces copper, molybdenum, zinc and silver. All of its mining, smelting and refining facilities are located in Peru and in Mexico, and it conducts exploration activities in those countries and Chile. Its Peruvian copper operations involve mining, milling and flotation of copper ore to produce copper concentrates and molybdenum concentrates; the smelting of copper concentrates to produce anode copper, and the refining of anode copper to produce copper cathodes. It operates the Toquepala and Cuajone mines in the Andes mountains. The Company also operates a smelter and refinery west of the Toquepala and Cuajone mines in the coastal city of Ilo, Peru. Its Mexican operations are conducted through the Company’s subsidiary, Minera Mexico S.A. de C.V. (Minera Mexico). Minera Mexico engages principally in the mining and processing of copper, molybdenum, zinc, silver, gold and lead.

Minera Mexico operates through subsidiaries that are grouped into three separate units. Mexicana de Cobre S.A. de C.V. (together with its subsidiaries, the Mexcobre Unit) operates La Caridad, an open-pit copper mine, a copper ore concentrator, a SX/EW plant, a smelter, refinery and a rod plant. Mexicana de Cananea S.A. de C.V. (together with its subsidiaries, the Cananea Unit) operates Cananea, an open-pit copper mine, which is located at the site of a copper ore deposit, a copper concentrator and two SX/EW plants. Industrial Minera Mexico, S.A. de C.V. and Minerales Metalicos del Norte, S.A. (together with its subsidiaries, the IMMSA Unit) operate five underground mines that produce zinc, lead, copper, silver and gold, a coal mine and several industrial processing facilities for zinc and copper. Southern Copper Corporation is engaged in ongoing exploration to locate additional ore bodies in Peru, Mexico and Chile. In Peru, the Company has direct control of 194,190 hectares of mineral rights. In Mexico, Southern Copper Corporation holds 347,734 hectares of exploration concessions. It also holds 35,958 hectares of exploration concessions in Chile.

Peru

The Los Chancas project, located in the department of Apurimac in southern Peru, is a copper and molybdenum porphyry deposit. Estimated mineralized resources identified after the preliminary design of the pit are 355 million tons of mineralized material with a 0.62%, 0.05% of molybdenum and 0.039 grams of gold per ton. The Tantahuatay project is located in the department of Cajamarca in northern Peru. As of December 31, 2008, work indicates 27.1 million tons of mineralized material, with an average silver content of 13 grams per ton and 0.89 grams of gold per ton. The Company has a 44.25% share in this project. During the year ended December 31, 2008, the Company conducted a total of 32,551.90 meters of diamond drilling in the area surrounding the Tia Maria Project, as well as exploration conducted mainly in the Ayacucho Region.

Mexico

The El Arco site is located in the state of Baja California in Mexico. Preliminary investigations of the El Arco site indicate a mineral deposit of 846 million tons of mineralized material with average copper grades of 0.51% and 0.14 grams of gold per ton, and 170 million tons of leach mineralized materials with average copper grades of 0.56%. The Angangueo site is located in the state of Michoacan in Mexico. A deposit of 13 million tons of mineralized material has been identified with diamond drilling. Testing indicates that the mineral deposit contains mineralized material containing 0.16 grams of gold and 262 grams of silver per ton, and consists of 0.79% lead, 0.97% copper and 3.5% zinc. The Buenavista project site is located in the state of Sonora in Mexico, adjacent to the Cananea ore body. Drilling and metallurgical studies have shown that the site contains 36 million tons of mineralized material containing 29 grams of silver, 0.69% of copper and 3.3% of zinc per ton.

In Coahuila, an exploration program of diamond drilling has identified two additional areas, Esperanza with a potential for more than 30 million tons of in place mineralized coal and Guayacan with a potential for 15 million tons of in place mineralized coal, which could be used for a coal-fired power plant. The Chalchihuites project is located in the state of Zacatecas. Sierra de Lobos project is located southwest of the city of Leon, Guanajuato. The Company’s target is a copper and zinc deposit with grades between 0.5% and 1.0% copper and between 5% and 7% zinc, including a small contribution of gold and silver. During 2008, the Company bought Freeport-McMoran’s 49% interest in Minera Pilares,S.A. de C.V. (Minera Pilares), giving the Company 100% ownership. Minera Pilares is located in the state of Sonora, 10 kilometers from the town of Nacozari de Garcia.

Chile

The El Salado prospect, located in the Atacama Region, is being explored for copper-gold. During 2008, 3,232 meters of diamond drilling was performed. During 2008, the Company continued with the exploration of Resguardo, (gold and copper veins) located in northern Chile (Region III-Atacama), with 3,729 meters of diamond drilling. It also performed 1,000 meters of diamond drilling at the Ticnamar prospect located in northern Chile (Region I-Tarapaca). Ticnamar is a porphiric deposit of copper and molybdenum.