Shares of Frontera Copper (TSX: T.FCC, Stock Forum) plunged more than 28% to 31 cents Tuesday morning, after the company announced that mining activities at its Piedras Verdes Operations in Mexico will be temporarily suspended.

The move comes in response to the recent downturn in copper prices, says the company, adding that copper production will continue on a gradually declining basis while leaching operations will proceed on an uninterrupted basis.

The company also plans a near-term reduction of about 100 employees at Piedras Verdes. Frontera says that coupled with current cash balances, it expects the cash flow generated by the Piedras Verdes Operations at present copper prices to provide sufficient funds to enable it to meet all of its financial obligations in 2009.

"We look forward to a smooth restart of mining activities once the outlook for the copper market improves and prices stabilize at a level that would justify a resumption of full operations. In the meantime, we are fully committed to cooperating with and assisting our employees, suppliers and contractors as we transition into this new operating environment," says Alan Edwards, the company’s president and chief executive officer.

The company’s copper production for the fourth quarter of 2008 is estimated to range from 9 million to 11 million pounds, and is estimated at approximately 6 million to 8 million pounds for the first quarter of 2009 assuming the suspension of mining activities continues for the quarter.

Last week, Stockhouse member steve97 provided an opinion on the stock: “This baby got thrown out with the bath water with the meltdown. I picked some up under .30, and you can pick up a lot of shares when it is a penny stock. As seisdeplata mentioned the future should be fine for frontera. They did unwind their hedge book which concerns me, especially if they can't get their costs down, but the stock got beat up so bad that you can't go wrong picking some up at these levels[sic].”

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