##### 



PERU COPPER INC.
 RENEWAL ANNUAL INFORMATION FORM
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2006
 March 28, 2007




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##### 



PERU COPPER INC.
RENEWAL ANNUAL INFORMATION FORM FOR THE FISCAL YEAR ENDED DECEMBER 31, 2006
 TABLE OF CONTENTS
 PAGEITEM 1  INTRODUCTORY NOTES
    
    
    2CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
    
    
    2CURRENCY PRESENTATION AND EXCHANGE RATE INFORMATION
    
    
    2ITEM 2  CORPORATE STRUCTURE
    
    
    3ITEM 3  GENERAL DEVELOPMENT OF THE BUSINESS OF THE COMPANY
    
    
    3OVERVIEW OF BUSINESS
    
    
    3THREE YEAR HISTORY
    
    
    4ITEM 4  NARRATIVE DESCRIPTION OF THE BUSINESS
    
    
    9PRINCIPAL PRODUCTS
    
    
    9SPECIALIZED SKILL AND KNOWLEDGE
    
    
    9COMPETITIVE CONDITIONS
    
    
    9ECONOMIC DEPENDENCE
    
    
    10EMPLOYEES
    
    
    10FOREIGN OPERATIONS
    
    
    10REORGANIZATIONS
    
    
    14RISKS OF THE BUSINESS
    
    
    14TECHNICAL INFORMATION
    
    
    22MINERAL PROJECT
    
    
    23ITEM 5  DIVIDENDS
    
    
    31ITEM 6  DESCRIPTION OF CAPITAL STRUCTURE
    
    
    32AUTHORIZED CAPITAL
    
    
    32COMMON SHARES
    
    
    32PREFERENCE SHARES
    
    
    32ITEM 7  MARKET FOR SECURITIES
    
    
    32PRICE RANGE AND TRADING VOLUME
    
    
    32ITEM 8  DIRECTORS AND OFFICERS
    
    
    33CONFLICTS OF INTERESTS
    
    
    37ITEM 9  PROMOTERS
    
    
    38ITEM 10  LEGAL PROCEEDINGS
    
    
    38ITEM 11  INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS
    
    
    38ITEM 12  TRANSFER AGENTS AND REGISTRARS
    
    
    39ITEM 13  MATERIAL CONTRACTS
    
    
    40ITEM 14  INTERESTS OF EXPERTS
    
    
    43ITEM 15  AUDIT COMMITTEE
    
    
    43RELEVANT EDUCATIONAL EXPERIENCE
    
    
    44PRE-APPROVAL POLICIES AND PROCEDURES
    
    
    44EXTERNAL AUDITOR SERVICE FEES
    
    
    44ITEM 16  SELECTED CONSOLIDATED FINANCIAL INFORMATION UNDER US GAAP
    
    
    45UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
    
    
    45SHAREHOLDERS EQUITY
    
    
    48RECENT ACCOUNTING PRONOUNCEMENTS
    
    
    49ITEM 17  ADDITIONAL INFORMATION
    
    
    49CHARTER OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
    
    
    51




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ITEM 1
INTRODUCTORY NOTES
 Cautionary Note Regarding Forward-Looking Statements
   Currency Presentation and Exchange Rate Information
   Year Ended December 312006
    
    2005
    
    2004Closing
    
    
    0.8581
    
    
    
    0.8577
    
    
    $
    0.8333High
    
    
    0.8479
    
    
    
    0.8751
    
    
    
    0.8547Low
    
    
    0.9134
    
    
    
    0.7853
    
    
    
    0.7194Average(1)
    
    
    0.8818
    
    
    
    0.8254
    
    
    
    0.7692
 
 (1)
    
    Calculated as an average of the daily noon rates for the period.  2




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##### 



ITEM 2
CORPORATE STRUCTURE
 Canada Business Corporations
Act
   
 ITEM 3
GENERAL DEVELOPMENT OF THE BUSINESS OF THE COMPANY
 Overview of Business
  3




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Three Year History
 Toromocho Project
  Project Drilling History
   Private Placements and Share Exchange
   4




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Initial Public Offering and TSX Listing
   U.S. Registration Statement and AMEX Listing
 Securities Act of 1933
 Updated Mineral Resource Estimate
  UBS Retained
  Lima Stock Exchange Listing
  Completion of Pre-Feasibility Study
  Appointment of New Director
  5




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##### 



New Mineral Reserve Estimate
  Agreement with Austria-Duvaz
  Up-dated Technical Report on Toromocho Project
  Appointment of New Officer
  Securement of Water Rights for Toromocho Project
  Appointment of New Officer
  Toromocho Project Receives Support from Regional Government of Junin, Peru
  Signing of Water Treatment Plant Accord with Government of Peru
  6




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##### 



Resignation of Chief Financial Officer
  New Chief Financial Officer
  Aker Kvaerner to conduct Feasibility Study and Luis J. Baertl joins Advisory Committee
   AMEC to Conduct Feasibility Study and Environmental Impact Assessment for Kingsmill Tunnel Water
Treatment Plant
  Consolidation of Land Position and Additions to Surface and Mining Rights
 Sociedad Minera Austria Duvaz S.A.C.
    7




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##### 



Compañia Minera Argentum S.A.
   Comunidad Campesina de Yauli
  Comunidad Campesina San Francisco de Asis de Pucara
  Retirement of President and Chief Executive Officer
  New Discovery of Large Copper-Zinc Deposit Found Adjacent to Existing Toromocho Ore Body
  8




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##### 



Second New Discovery of Large Zinc Deposit Adjacent to Existing Toromocho Ore Body
  New Director, President and Chief Executive Officer
  Favourable Column Leach Results
  Resignation of Director
  ITEM 4
NARRATIVE DESCRIPTION OF THE BUSINESS
  Principal Products
  Specialized Skill and Knowledge
  Competitive Conditions
  9




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Economic Dependence
  Employees
  Foreign Operations
  Peru
    Current Government
  Economy
  Mining in Peru
  10




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##### 



Peruvian Mining Laws
   Annual Fees
  Royalties
    Ownership of Mining Rights
  
    
    no restrictions are placed on the remittance of dividends, depreciation and
royalties outside of Peru;
    
    mining rights may be forfeited due to a number of enumerated circumstances (for
example, the negligence of the title holder in carrying out operations);
    
    equal rights to explore for and exploit minerals by way of concession may be granted
to either
 11




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##### 



Peruvian nationals or foreigners; and
    
    the right to sell mining production freely in world markets is established. Peru has
become party to agreements with the World Banks Multilateral Investment Guarantee
Agency and with the Overseas Private Investment Corporation.
 Taxation and Foreign Exchange Controls
     Stability Agreements
   
    
    A 15 year term.
    
    Stability is applicable to the mining unit in which the investment is made.
    
    Tax stability protecting the company from any new tax or modification in tax after
the date of the agreement.
    
    Any new regulation that creates mandatory bonds, loans to the Government or tax
payments in advance will not be applicable.
    
    Stability of foreign exchange regulations including the free use of foreign currency
generated by exports.
    
    No discrimination in the exchange rate including a guarantee of access to the most
favourable exchange rate.
    
    Free trade rights with respect to the companys mineral production.
    
    Stability with respect to any new non-income taxes such as temporary import or VAT
refund for exportation.
    
    Administrative stability protecting the company from increases in the amount of
annual fees and penalties.
   12




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##### 



Environmental Laws
    Mine Closure and Remediation
    Workers Participation
   Regulatory and Supervisory Bodies
   13




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##### 




    
    National Institute of Natural Resources, which manages protected natural areas and
issues an advisory opinion on every concession holders Environmental Impact
Assessment, to the extent that planned operations will alter natural landscape;
    
    General Bureau of Environmental Health of the Ministry of Health, which manages
waste discharge into the environment and related issues, particularly those that may
affect public health;
    
    Mining of Internal Affairs, which approves the acquisition, transport and usage of
explosives for mining companies;
    
    National Institute of Culture, which grants certifies the non-existence of
archaeological remains, as typically required for the Environmental Impact Assessment;
    
    General Bureau of Harbor Masters Offices and Coastguards, which enforces sanctions
if rivers or navigable lakes located within Perus national borders are contaminated
for whatever reason;
    
    Supervisory Board for Investment in Energy, which monitors compliance with
conservation laws in regarding utility issues; and
    
    Ministry of Agriculture, which approves water usage permits.
  Impact of Environmental Non-Compliance
   Reorganizations
  Risks of the Business
  Exploration, Development and Operating Risks
 Risks Relating to the Companys Business and Industry
 Peru Copper is an exploration-stage company with a limited operating history and its estimates of
mineralization are based on drilling data, which may not reflect the actual deposits or the
economic viability of extraction.
   14




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The Company currently depends on a single mineral property, which is in the early stages of
development and even if it is developed, negative developments affecting the properties could
adversely affect its business.
  The Company has a history of losses and it expects to incur losses in the future.
  Copper exploration is highly speculative in nature and there can be no certainty of the Companys
successful development of profitable commercial mining operations.
  
    
    the quality and experience of our management,
    
    our level of geological and technical expertise,
    
    the quantity and quality of land available to us for exploration, and
    
    many other factors outside of our control.
   15




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##### 



The Company does not own the mining concessions and assets of the Toromocho Project and may not
satisfy the terms of the Toromocho Option Agreement to acquire such concessions.
  
    
    have at least one mining operation or concentrator with a capacity of 10,000 tonnes
per day, and a net shareholders equity of US$100,000,000, or
    
    that a financial institution acceptable to Centromin is willing to provide the
financing required for the development of the Toromocho Project, as described in the
Feasibility Study.
   Metallurgical testing results at Toromocho.
  The Company may not be able to access sufficient water, power and tailings storage areas that will
be necessary in order to develop the Toromocho Project into an operating mine.
  The Company will require a significant amount of capital to fund its operations, its ability to
obtain additional capital depends on many factors beyond its control and lack of adequate capital
could delay or prevent the Company from achieving profitability.
  16




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Fluctuations in copper prices could adversely affect the Companys future profitability and it do
not have a hedging policy to protect from such fluctuations.
  
    
    inflation,
    
    global copper demand,
    
    global copper supply,
    
    speculative activities, and
    
    political and economic conditions.
  The Company may not be able to satisfy minimum investments to develop the mining concessions and,
if it does not, it could become subject to penalties and to the loss of its mining concessions.
  Easements and rights of use owned by others in or near the Toromocho Project may interfere with the
Companys ability to develop its mining concessions.
   The Company may not satisfy the terms of its agreements with Argentum to exchange mining
concessions in the Toromocho Project, which could have an adverse effect on its ability to fully
develop the Project.
  Additional mining concessions adjacent to the Toromocho Project are owned by third parties and the
Company may not be able to negotiate the acquisition of these rights, which could increase its cost
of operations or adversely affect its ability to fully develop the Project.
  17




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##### 



The Company may not be able to secure good title to the additional mining concessions, which could
delay or restrict the exploration and development of the Toromocho Project.
    The Companys operations are subject to risks and hazards inherent in the mining industry, all of
which could have adverse effects on its financial condition, results of operation and future cash
flows.
  
    
    environmental hazards,
    
    industrial accidents,
    
    labour disputes,
    
    unusual or unexpected geologic formations or other geological or grade problems,
    
    unanticipated changes in metallurgical characteristics and copper recovery,
    
    unanticipated ground or water conditions, cave-ins, pit wall failures, flooding, rock bursts,
    
    periodic interruptions due to bad or hazardous weather conditions and other acts of God, and
    
    unfavourable operating conditions.
  
    
    increase the cost of exploration, development or production to a point where it is
no longer economically feasible to continue,
    
    require the Company to write down the carrying value of one or more mines or a property,
    
    cause delays or a stoppage in the exploration, development or production of copper,
    
    result in damage to or destruction of mineral properties or processing facilities, and
    
    result in personal injury or death or legal liability.
  The Companys operations are subject to environmental risks and it has assumed responsibility for
environmental remediation of its activities in the Toromocho Project.
  18




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##### 



Currency fluctuations may adversely affect the Companys costs.
  The Companys business could be adversely affected if it fails to comply with extensive government
regulations or fail to obtain, renew or comply with necessary licenses and permits.
  
    
    health and safety,
    
    labour standards,
    
    employment,
    
    waste disposal,
    
    protection of the environment,
    
    mine development and prospecting,
    
    mineral production,
    
    use of water,
    
    exports, and
    
    taxes.
   19




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##### 



The copper supply industry is subject to a worldwide antitrust investigation, which could adversely
affect the copper industry and copper prices.
 Mining Journal
  The Company is likely to be deemed to be a passive foreign investment company for U.S. federal
income tax purposes, which could lead to additional taxes for U.S. holders of its shares.
  The Companys insurance coverage does not cover all potential losses.
  The Company relies on its management team, outside contractors, experts and other advisors and the
loss of any of them, if they cannot be replaced, could have a material adverse effect on its
business and financial performance.
  20




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##### 



Several of the Companys directors and officers serve on boards of other natural resource,
exploration and development companies and may have conflicts of interest.
  The Company is a small operator in a highly competitive industry and may not have the adequate
resources to compete effectively.
  Risks Relating to the Political and Economic Environment in Peru
 The Company is subject to the risks associated with foreign operations.
     Changes in Peruvian royalty regulations could increase the Companys operating costs.
  If Peru increases taxes in future, there could be an adverse effect on the cost estimates that the
Company has utilized in estimating mineralization, on its operating costs and on its profitability.
  21




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##### 



Risks Relating to the Companys Common Shares and the Trading Market
 The Company may, in the future, issue additional common shares or other securities, which would
reduce investors percentage ownership and may dilute the value of its shares.
  The Company has not and does not plan to pay dividends.
  There will be dilution upon exercise of convertible securities.
  The Company may pursue certain strategic alternatives and fail to accomplish them, which could
significantly reduce the price of its common shares.
  Technical Information
 CIM Standards Definitions
  Mineral Resource 
 Inferred Mineral Resource 
 22




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Indicated Mineral Resource 
  Measured Mineral Resource 
  Mineral Reserve 
  Probable Mineral Reserve 
  Proven Mineral Reserve 
 Mineral Projects
 Toromocho Project
   Project Description and Location
  23




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##### 



Accessibility, Climate, Local Resources, Infrastructure and Physiography
       24




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##### 



History
    Geological Setting
    Exploration
    25




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##### 



Mineralization
       Drilling
  Drill
    
    DrillCompany
    
    Date
    
    Holes
    
    (meters)Cerro de Pasco
    
    
    1966-1968
    
    
    33
    
    11,316Cerro de Pasco
    
    
    1970-1971
    
    
    39
    
    7,498Cerro de Pasco
    
    
    1972-1973
    
    
    10
    
    1,437Centromin
    
    
    1974-1976
    
    
    61
    
    22,143Peru Copper
    
    
    2003
    
    
    5
    
    1,965Peru Copper
    
    
    2004 - 2005
    
    
    186
    
    88,108Peru Copper
    
    
    2006
    
    
    30
    
    6,642Total :
    
    
    
    
    
    364
    
    139,109
    26




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##### 




    
    Total copper,
    
    Acid soluble copper, (nominal room temperature dissolution)
    
    Cyanide soluble copper, on the acid soluble reject
· Total copper tail, on the cyanide soluble reject.
  
    
    Gold
    
    Silver
    
    Zinc
    
    Molybdenum
    
    Iron
    
    Arsenic
 Sampling and Analysis
   
    
    HQ and PQ Core are boxed in galvanized steel boxes at the drill rig;
    
    the core is transported to the Companys core logging facility at Tuctu;
    
    the core is washed and photographed;
    
    geotechnical logging is completed on the whole core;
    
    geologic logging is completed on the whole core;
    
    the core is dry sawn lengthwise;
    
    half of the core is retained at the Companys core shed at Tuctu;
    
    half of the core is sent to CIMM Peru S.A. (CIMM),in Lima, for sample preparation and assay; and
    
    split core is transported to the sample prep lab by the Company.
 27




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Security of Samples
     1 4
    28




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Mineral Resources
   Cautionary Note to United States Investors Concerning Estimates of Measured, Indicated and Inferred
Resources
 United
States investors are cautioned not to assume that all or any part of Measured Mineral Resources,
Indicated Mineral Resources, or Inferred Mineral Resources will ever be converted into Mineral
Reserves. United States investors are also cautioned not to assume that all or any part of an
Inferred Mineral Resource exists, or is economically or legally mineable. Investors should also
note that there is a different definition for reserves between SEC guide no. 7 and CIM Standards
applicable under Canadian rules.
 Mineral Reserves(1)Tonnes
    
    Grade
    
    Grade
    
    Grams per
    
    % CopperCategory
    
    (Millions)
    
    %Cu
    
    % Mo
    
    Tonne AG
    
    Equivalent(6)Proven (2)(3)
    
    
    465.4
    
    
    
    0.57
    %
    
    
    0.021
    %
    
    
    6.54
    
    
    
    0.80
    %Probable (2)(3)
    
    
    909.6
    
    
    
    0.48
    %
    
    
    0.016
    %
    
    
    7.33
    
    
    
    0.67
    %Proven + Probable (4)
    
    
    1,375.0
    
    
    
    0.51
    %
    
    
    0.018
    %
    
    
    7.06
    
    
    
    0.71
    %
 Mineral Resources in Addition to ReservesTonnes
    
    Grade
    
    Grade
    
    Grams per
    
    % CopperCategory (0.27% eqcu Cut-off)
    
    (Millions)
    
    %Cu
    
    % Mo
    
    Tonne AG
    
    Equivalent(6)Measured (2)
    
    
    64.1
    
    
    
    0.41
    %
    
    
    0.013
    %
    
    
    6.55
    
    
    
    0.58
    %Indicated (2)
    
    
    537.3
    
    
    
    0.37
    %
    
    
    0.016
    %
    
    
    6.85
    
    
    
    0.57
    %Measured + Indicated (5)
    
    
    601.4
    
    
    
    0.37
    %
    
    
    0.016
    %
    
    
    6.82
    
    
    
    0.57
    %Inferred
    
    
    151.0
    
    
    
    0.46
    %
    
    
    0.010
    %
    
    
    7.85
    
    
    
    0.61
    %
 
 (1)
    
    The NI 43-101 Technical Report complies with NI 43-101. Mineral resource classifications
are, in all material respects, based upon the CIM Standards.(2)
    
    Metal prices for mineral reserves and resources, US$0.90/lb copper, US$6.00/lb molybdenum,
US$5.50/oz silver.(3)
    
    Cutoff grades for mineral reserves vary over time and are based on flotation cutoffs that
range from US$4.22 to US$3.52 net smelter return per tone and leach cutoffs that range from
0.44% to 0.085% soluble copper.(4)
    
    Proven and probable mineral reserves under Canadian standards do not have demonstrated
economic viability in the United States and are not mineral reserves in the United States.(5)
    
    Measured, Indicated and Inferred resources are not mineral reserves and do not have
demonstrated economic validity.(6)
    
    Equivalent Copper on this Table is based on Copper +9.70 x molybdenum + 0.0007 x Silver
($1.00/lb Copper, $10.00/lb Mo, $5.50/oz Silver). Heap Leach Ore receives no credit for
Molybdenum or Silver content in the equivalent copper calculation. Exploration and Development
  29




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##### 



New Discovery of Copper-Zinc Mineralization Found Adjacent to Existing Toromocho Orebody
  Second New Discovery of Copper- Zinc Mineralization Adjacent to Existing Toromocho Orebody
  Favourable Column Leach Results
     Leach Results
 30




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Intrusive Rock Types:
      Blended Skarn and Intrusive Rock Types:
  High Arsenic Rock Types:
 3 4
 ITEM 5
DIVIDENDS
  31




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ITEM 6
DESCRIPTION OF CAPITAL STRUCTURE
 Authorized Capital
  Common Shares
  Preference Shares
  ITEM 7
MARKET FOR SECURITIES
 Price Range and Trading Volume
 Common Shares
  Period
    
    High
    
    Low
    
    Volume(Cdn.$)
    
    (Cdn.$)January 2006
    
    
    3.79
    
    
    
    2.81
    
    
    
    7,183,133February 2006
    
    
    4.52
    
    
    
    3.31
    
    
    
    6,446,831March 2006
    
    
    3.91
    
    
    
    2.89
    
    
    
    7,107,123April 2006
    
    
    3.84
    
    
    
    2.46
    
    
    
    18,163,696May 2006
    
    
    6.06
    
    
    
    3.13
    
    
    
    17,696,264June 2006
    
    
    7.65
    
    
    
    4.05
    
    
    
    17,548,384July 2006
    
    
    5.91
    
    
    
    4.60
    
    
    
    1,377,999August 2006
    
    
    5.94
    
    
    
    4.65
    
    
    
    1,444,173September 2006
    
    
    5.71
    
    
    
    4.48
    
    
    
    811,894October 2006
    
    
    4.99
    
    
    
    3.65
    
    
    
    768,352November 2006
    
    
    4.50
    
    
    
    3.69
    
    
    
    602,940December 2006
    
    
    4.71
    
    
    
    3.80
    
    
    
    2,467,967
 32




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##### 



Common Share Purchase Warrants
  Period
    
    High
    
    Low
    
    Volume(Cdn.$)
    
    (Cdn.$)January 2006
    
    
    1.48
    
    
    
    0.59
    
    
    
    2,255,765February 2006
    
    
    2.24
    
    
    
    1.05
    
    
    
    1,718,234March 2006(1)
    
    
    1.60
    
    
    
    0.74
    
    
    
    818,145
 
 (1)
    
    The Companys common share purchase warrants expired on March 18, 2006. ITEM 8
DIRECTORS AND OFFICERS
  Principal Occupation, BusinessName, Province/State and Country
    
    Position with the Company
    
    or EmploymentJ. David Lowell
Arizona, United States
    
    Executive Chairman; Director
since February 24, 2004
    
    Executive Chairman of Peru CopperGerald A. Wolfe
Lima, Peru
    
    President, Chief Executive
Officer; Director since
January 15, 2007
    
    President and Chief Executive
Officer of Peru CopperCatherine E. McLeod-Seltzer
British Columbia, Canada
    
    Director since February 24,
2004
    
    Chairman and Director of Pacific
Rim Mining Corp., a public resource
companyGeorge R. Ireland (1)(2)(3)
Massachusetts, United States
    
    Director since May 12, 2004
    
    President of GRI Holdings LLC, a
private investment management
companyCarl L. Renzoni (1)(3)
Ontario, Canada
    
    Director since June 8, 2004
    
    Independent contractor currently
serving as a director of Meridian
Gold Inc., International Molybdenum
plc and Peru CopperJohn P. Fairchild (1)(3)
British Columbia, Canada
    
    Director since November 24,
2004
    
    Independent contractor currently
serving as a director of Peru
CopperThomas J. ONeil (2)(4)
Arizona, United States
    
    Director since February 8,
2005
    
    Independent contractor currently
serving as a director of Fording,
Inc. and Peru CopperMiguel Grau M. (2)(4)
Lima, Peru
    
    Director since February 6,
2006
    
    Partner in Estudio Grau, Abogados,
a law firm in Lima, Peru
 33




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##### 



Principal Occupation, BusinessName, Province/State and Country
    
    Position with the Company
    
    or EmploymentDavid E. De Witt
British Columbia, Canada
    
    Vice President of Corporate
Development; Director since
November 24,
2004(5)
    
    President of Pathway Capital Ltd.,
a private venture capital companyH. Eric C. Peitz
Lima, Peru
    
    Chief Financial Officer
since August 1, 2006
    
    Chief Financial Officer of Peru
CopperPatrick De Witt 
British Columbia, Canada
    
    Director of Investor
Relations and Governmental
Affairs (Canada)
    
    Director of Investor Relations and
Governmental Affairs (Canada) of
Peru CopperAngel Alvarez 
Lima, Peru
    
    Vice President, Exploration
    
    Vice President, Exploration of Peru
CopperThomas G. White
Utah, United States
    
    Vice President of Project
Development since June 1,
2006
    
    Vice President of Project
DevelopmentPaul M. Stein
Ontario, Canada
    
    Corporate Secretary
    
    Partner in Cassels Brock &
Blackwell LLP, a law firm in
Toronto, OntarioArmando J. Arrieta M.
Lima, Peru
    
    Director of Peruvian Legal
Affairs since May 10, 2006
    
    Partner in Estudio Muniz, Ramirez,
Perez-Taiman & Luna-Victoria, a law
firm in Lima, Peru
 
 (1)
    
    Member of the Audit Committee.

(2) Member of the Compensation Committee.(3)
    
    Member of the Corporate Governance and Nominating Committee.(4)
    
    Member of the Environmental and Technical Committee(5)
    
    Mr. De Witt also served as a director of the company from February 24, 2004 to June 8, 2004.  J. David Lowell Executive Chairman and Director.
 Gerald A. Wolfe President, Chief Executive Officer and Director.
 34




---



##### 



Catherine E. McLeod-Seltzer Director.
 George R. Ireland Director.
 Carl L. Renzoni Director.
 John P. Fairchild Director.
 Thomas J. ONeil  Director 
 35




---



##### 



Miguel Grau M. Director.
 David E. De Witt Director, Vice President of Corporate Development.
 H. Eric C. Peitz Chief Financial Officer.
 Patrick De Witt Director of Investor Relations and Governmental Affairs (Canada).
 Angel Alvarez Vice PresidentExploration.
 36




---



##### 



Thomas G. White Vice President of Project Development.
 Paul M. Stein Corporate Secretary
 Armando J. Arrieta M. Director of Peruvian Legal Affairs.
  Conflicts of Interest
  Canada Business Corporations Act,
 Canada Business Corporations Act
 37




---



##### 



ITEM 9
PROMOTERS
  Percentage of common shares,Number of common shares, directly
    
    directly or owned indirectly,or indirectly, owned or over which
    
    or over which control and/orPromoter
    
    control and/or direction is exercised
    
    direction is exercisedJ. David Lowell
    
    
    15,340,000
    (1)
    
    
    12.8
    %Catherine E. McLeod-Seltzer
    
    
    4,300,000
    
    
    
    3.6
    %David E. De Witt
    
    
    2,800,001
    (2)
    
    
    2.3
    %
 
 (1)
    
    Mr. Lowell and his wife, Edith Lowell, exercise control and direction over these shares in
their capacity as trustees of the Lowell Family Trust UA.(2)
    
    All of these shares, other than one share held directly by Mr. De Witt, are directly
owned by Fisherking Holdings Ltd., a company controlled by Mr. De Witt. ITEM 10
LEGAL PROCEEDINGS AND REGULATORY ACTIONS
  ITEM 11
INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS
    38




---



##### 



.
 ITEM 12
TRANSFER AGENTS AND REGISTRARS
  ITEM 13
MATERIAL CONTRACTS
    39




---



##### 



40




---



##### 



(a)
    
    for a copper price less than or equal to $0.80 per pound, 0.51% of net sales;(b)
    
    or a copper price of between $0.80 and $1.10 per pound, a percentage determined
as follows: royalty = (4.0 x price of copper per pound    2.69) %; and(c)
    
    for a copper price greater than or equal to or $1.10 per pound, 1.71% of net
sales.
     41




---



##### 



42




---



##### 



ITEM 14
INTERESTS OF EXPERTS
  ITEM 15
AUDIT COMMITTEE
    43




---



##### 



Relevant Educational Experience
  John P. Fairchild
 Carl Renzoni
 George R. Ireland 
 Pre-Approval Policies and Procedures
  External Auditor Service Fees
 Audit Fees
  Audit-Related Fees
  Tax Fees
  44




---



##### 



All Other Fees
  ITEM 16
SELECTED CONSOLIDATED FINANCIAL INFORMATION
UNDER UNITED STATES GAAP
 www.sedar.com
 United States generally accepted accounting principles (U.S. GAAP)
    Period fromYear ended
    
    
    Year ended
    
    
    Year ended
    
    
    April 24, 2003December 31,
    
    
    December 31,
    
    
    December 31,
    
    
    to December2006
    
    
    2005
    
    
    2004
    
    
    31, 2006$
    
    
    $
    
    
    $
    
    
    $Statements of Operations and DeficitNet loss following Canadian GAAP
    
    
    (3,349,734
    )
    
    
    (3,421,771
    )
    
    
    (277,288
    )
    
    
    (7,092,534
    )Net effect of write-down of
deferred expenditures
    
    
    (32,983,748
    )
    
    
    (17,233,174
    )
    
    
    (11,550,170
    )
    
    
    (62,973,520
    )Net loss and comprehensive loss
under U.S. GAAP
    
    
    (36,333,482
    )
    
    
    (20,654,945
    )
    
    
    (11,827,458
    )
    
    
    (70,066,054
    )Loss per share under U.S. GAAP
    
    
    (0.32
    )
    
    
    (0.22
    )
    
    
    (0.18
    )
    
    
    Weighted average number of shares
outstanding, following U.S. GAAP
    
    
    114,612,727
    
    
    
    94,605,447
    
    
    
    65,631,543
    
    
    
    
 45




---



##### 



Period fromYear ended
    
    
    Year ended
    
    
    Year ended
    
    
    April 24, 2003December 31,
    
    
    December 31,
    
    
    December 31,
    
    
    to December 31,2006
    
    
    2005
    
    
    2004
    
    
    2006$
    
    
    $
    
    
    $
    
    
    $Statements of Cash FlowsCash flows from (used
in) operating
activities, Canadian
GAAP
    
    
    (2,319,415
    )
    
    
    (2,428,454
    )
    
    
    362,177
    
    
    
    (4,374,498
    )Deferred expenditures
    
    
    (15,045,095
    )
    
    
    (16,022,873
    )
    
    
    (10,636,430
    )
    
    
    (42,899,185
    )Cash flows used in
operating activities,
U.S. GAAP
    
    
    (17,364,510
    )
    
    
    (18,451,327
    )
    
    
    (10,274,253
    )
    
    
    (47,273,683
    )Cash flows used in
investing activities,
Canadian GAAP
    
    
    (30,922,620
    )
    
    
    (17,667,252
    )
    
    
    (12,802,096
    )
    
    
    (62,606,756
    )Deferred expenditures
    
    
    15,045,095
    
    
    
    16,022,873
    
    
    
    10,636,430
    
    
    
    42,899,185Cash flows used in
investing activities,
U.S. GAAP
    
    
    (15,877,525
    )
    
    
    (1,644,379
    )
    
    
    (2,165,666
    )
    
    
    (19,707,571
    )
 December 31, 2006
    
    
    December 31, 2005Consolidated Balance Sheets
    
    $
    
    
    $Total assets following Canadian GAAP
    
    
    115,325,851
    
    
    
    60,507,082Net effect of write-down of deferred expenditures
    
    
    (62,973,520
    )
    
    
    (29,989,772
    )Total assets under U.S. GAAP
    
    
    52,352,331
    
    
    
    30,517,310
 46




---



##### 



DeficitaccumulatedCommon
    
    
    Warrants
    
    
    Common
    
    
    
    
    
    
    
    
    
    
    during thestock
    
    
    and agent
    
    
    stock
    
    
    
    
    
    
    Contributed
    
    
    developmentshares
    
    
    options
    
    
    amount
    
    
    Warrants
    
    
    surplus
    
    
    stage$
    
    
    $
    
    
    $
    
    
    $Statements of Shareholders
Equity, U.S. GAAPShares issued for cash
    
    
    37,500,000
    
    
    
    
    
    
    
    1,177,562
    
    
    
    
    
    
    
    
    
    
    
    Shares issued for services
    
    
    12,500,000
    
    
    
    
    
    
    
    10,000
    
    
    
    
    
    
    
    
    
    
    
    Loss for the period
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,250,169
    )Balance  December 31, 2003
    
    
    50,000,000
    
    
    
    
    
    
    
    1,187,562
    
    
    
    
    
    
    
    
    
    
    
    (1,250,169
    )Cash call shareholder
contribution
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    200,000
    
    
    
    Acquisition of Peru Copper Inc.
    
    
    300,000
    
    
    
    
    
    
    
    (124,747
    )
    
    
    
    
    
    
    65,810
    
    
    
    Shares issued for cash
    
    
    9,428,570
    
    
    
    4,714,284
    
    
    
    11,764,286
    
    
    
    235,714
    
    
    
    
    
    
    
    Shares issued on the Initial
Public Offering (IPO) and over
allotment
    
    
    29,825,000
    
    
    
    14,912,500
    
    
    
    38,267,577
    
    
    
    745,625
    
    
    
    
    
    
    
    Over allotment of IPO
    
    
    4,473,750
    
    
    
    2,236,875
    
    
    
    5,761,986
    
    
    
    111,844
    
    
    
    
    
    
    
    Share issuance costs
    
    
    
    
    
    
    2,104,223
    
    
    
    (5,115,407
    )
    
    
    689,037
    
    
    
    
    
    
    
    Stock-based compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    879,308
    
    
    
    Loss for the period
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (11,827,458
    )Balance  December 31, 2004
    
    
    94,027,320
    
    
    
    23,967,882
    
    
    
    51,741,257
    
    
    
    1,782,220
    
    
    
    1,145,118
    
    
    
    (13,077,627
    )Shares issued for cash 
Agent options exercised
    
    
    200,000
    
    
    
    (200,000
    )
    
    
    280,000
    
    
    
    
    
    
    
    
    
    
    
    Shares issued for cash 
Warrants exercised
    
    
    3,514,424
    
    
    
    (3,514,424
    )
    
    
    5,974,511
    
    
    
    
    
    
    
    
    
    
    
    Fair value of options exercised
    
    
    
    
    
    
    
    
    
    
    117,410
    
    
    
    
    
    
    
    (117,410
    )
    
    
    Fair value of warrants
exercised
    
    
    
    
    
    
    
    
    
    
    688,506
    
    
    
    (688,506
    )
    
    
    
    
    
    
    Warrants expired
    
    
    
    
    
    
    (1,381
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Stock-based compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,295,060
    
    
    
    Loss for the period
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (20,654,945
    )Balance  December 31, 2005
    
    
    97,741,744
    
    
    
    20,252,077
    
    
    
    58,801,684
    
    
    
    1,093,714
    
    
    
    3,322,768
    
    
    
    (33,732,572
    )Shares issued for cash 
Options exercised
    
    
    1,353,780
    
    
    
    
    
    
    
    1,947,955
    
    
    
    
    
    
    
    
    
    
    
    Shares issued for cash 
Warrants exercised
    
    
    20,113,100
    
    
    
    (20,113,100
    )
    
    
    40,226,200
    
    
    
    
    
    
    
    
    
    
    
    Fair value of warrants
exercised
    
    
    
    
    
    
    
    
    
    
    1,005,655
    
    
    
    (1,005,655
    )
    
    
    
    
    
    
    Fair value of options exercised
    
    
    
    
    
    
    
    
    
    
    1,353,780
    
    
    
    
    
    
    
    (1,353,780
    )
    
    
    Warrants expired
    
    
    
    
    
    
    (8,084
    )Stock-based compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,112,527
    
    
    
    Loss for the period
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (36,333,482
    )Balance  December 31, 2006
    
    
    119,208,624
    
    
    
    130,893
    
    
    
    103,335,274
    
    
    
    88,059
    
    
    
    5,081,515
    
    
    
    (70,066,054
    )
 Shareholders Equity
  47




---



##### 



Recent U.S. accounting pronouncements
     No. 109,
 ,
 ITEM 17
ADDITIONAL INFORMATION
 www.sedar.com
 48




---



##### 



PERU COPPER INC.
 CHARTER OF THE AUDIT COMMITTEE
OF THE BOARD OF DIRECTORS
 I.
    
    Purpose
  t
    
    Oversee the accounting and financial reporting processes of the Company and the
audits of its financial statements, including: (i) the integrity of the Companys
financial statements; (ii) the Companys compliance with legal and regulatory
requirements; (iii) the independent auditors qualifications and independence; and
(iv) the performance of the Companys internal audit function.
 t
    
    Serve as an independent and objective party to monitor the Companys financial
reporting processes and internal control systems.t
    
    Review and appraise the audit activities of the Companys independent auditors and
the internal auditing functions.t
    
    Annually evaluate the performance of the Audit Committee.t
    
    Provide open lines of communication among the independent auditors, financial and
senior management, and the Board of Directors for financial reporting and control
matters. The Audit Committee will meet, periodically, with management, with the
members of the internal audit function and with the independent auditors.
 II.
    
    Composition
 Audit Committees American Stock Exchange Company Guide
 American Stock Exchange Company Guide American Stock Exchange Company Guide




---



##### 



III.
    
    Responsibilities and Powers
 Responsibilities and powers of the Audit Committee include:t
    
    Annual review of the adequacy of this Charter and revision of this Charter as
necessary with the approval of the Board of Directors and shall annually review the
Committees own performance.t
    
    Having sole authority (subject, if applicable to shareholder ratification)
regarding the selection, the appointment, the overseeing, evaluation, compensation
and, if necessary, the replacement of the independent auditors who prepare or issue an
auditors report or perform other audit, review or attest services for the Company,
including resolution of disagreements between management and the independent auditor
regarding financial reporting.t
    
    Ensuring that the auditors report directly to the Audit Committee and are made
accountable to the Board and the Audit Committee, as representatives of the
shareholders to whom the auditors are ultimately responsible.t
    
    Confirming the independence of the auditors, which will require receipt from the
auditors of a formal written statement delineating all relationships between the
auditors and the Company and any other factors that might affect the objectivity and
independence of the auditors and reviewing and discussing with the auditors any
significant relationships and other factors identified in the statement. Reporting to
the Board of Directors its conclusions and recommendations on the independence of the
auditors and the basis for these conclusions.t
    
    Ensuring that the independent auditors are prohibited from providing the following
non-audit services and determining which other non-audit services the independent
auditors are prohibited from providing:
 
    
    bookkeeping or other services related to the accounting records or financial
statements of the Company;
    
    financial information systems design and implementation;
    
    appraisal or valuation services, fairness opinions, or contribution-in-kind reports;
    
    actuarial services;
    
    internal audit outsourcing services;
    
    management functions or human resources;
    
    broker or dealer, investment adviser or investment banking services;
    
    legal services and expert services unrelated to the audit; and
    
    any other services which the Public Company Accounting Oversight Board
determines to be impermissible.
 t
    
    The Committee shall pre-approve all auditing services, internal control-related
services and permitted non-audit services (including the terms thereof) to be
performed for the Company by its independent auditor, subject to the de minimums
exceptions for non-audit services described in section 10 A (i) (l) (B) of the
Securities Exchange Act which are approved by the Audit Committee prior to the
completion of the audit.
 50




---



##### 



t
    
    Meeting with the auditors and financial management of the Company to review the
scope of the proposed audit for the current year, its staffing and the audit
procedures to be used.t
    
    Reviewing with management and the independent auditors:
 -
    
    the Companys annual audited and interim financial statements and
related footnotes, managements discussion and analysis, earnings releases and the
annual information form, for the purpose of recommending approval by the Board of
Directors prior to being released or filed with regulators, and ensuring that:
 o
    
    management has reviewed the financial statements with the
audit committee, including significant judgments affecting the financial
statementso
    
    the members of the Committee have discussed among themselves,
without management or the independent auditors present, the information
disclosed to the Committeeo
    
    the Committee has received the assurance of both financial
management and the independent auditors that the Companys financial
statements are fairly presented in conformity with Canadian GAAP in all
material respects
 -
    
    Any significant changes required in the independent auditors audit
plan and any serious issues with management regarding the audit.-
    
    Review and discuss with management (including the senior internal
audit executive) and the independent auditor the Companys internal control over
financial reporting and the independent auditors certification of the report, and
review disclosures made to the Committee by the CEO and CFO about any significant
deficiencies in the design or operation of internal controls or material
weaknesses therein and any fraud involving management or other employees who have
a significant role in the Companys internal controls.-
    
    Other matters related to the conduct of the audit that are to be
communicated to the Committee under generally accepted auditing standards.
 t
    
    Satisfying itself that adequate procedures are in place for the review of the
Companys public disclosure of financial information extracted or derived from the
Companys financial statements, other than the public disclosure described in the
preceding paragraph, and assessing the adequacy of such procedures periodically.t
    
    Reviewing with the independent auditors and management the adequacy and
effectiveness of the financial and accounting controls of the Company.t
    
    Establishing procedures: (i) for receiving, handling and retaining of complaints
received by the Company regarding accounting, internal controls, or auditing matters,
and (ii) for employees to submit confidential anonymous concerns regarding
questionable accounting or auditing matters.t
    
    Reviewing with the independent auditors any audit problems or difficulties and
managements response and resolving disagreements between management and the auditors
and review and discuss material written communications between management and the
independent auditors, such as any management letter of schedule of unadjusted
differences.
 
 51




---



##### 



t
    
    Serving as an independent and objective party to oversee the Companys controls and
procedures over disclosure documents including underlying information systems, and
providing its views on their sufficiency and effectiveness to the Board of Directors.t
    
    Making inquiries of management and the independent auditors to identify for the
Board of Directors the significant risks over internal control over financial
reporting of the Company and ensuring management has implemented appropriate systems
sufficient to manage these risks.t
    
    Ensuring that the disclosure of the process followed by the Board of Directors, its
committees and management, in the oversight of the Companys management of significant
risks over internal control over financial reporting is complete and fairly presented.t
    
    Obtaining reports from management, the Companys internal auditor and the
independent auditor that the Company is in conformity with legal requirements and the
Companys Code of Business Conduct and Ethics and reviewing reports and disclosures of
insider and affiliated party transactions.t
    
    Discussing any earnings press releases, as well as financial information and
earnings guidance provided to analysts and rating agencies.t
    
    At least annually obtaining and reviewing a report prepared by the independent
auditors describing (i) the auditors internal quality-control procedures; (ii) any
material issues raised by the most recent internal quality-control review, or peer
review, of the auditors, or by any inquiry of investigation by governmental or
professional authorities, within the preceding five years, respecting one or more
independent audits carried out by the auditors, and any steps taken to deal with any
such issues; and (iii) (to assess the auditors independence) all relationships
between the independent auditors and the Company.t
    
    Setting clear hiring policies for partners, employees or former partners and former
employees of the independent auditors.t
    
    Engaging and compensating (for which the Company will provide appropriate funding)
independent counsel and other advisors if the Committee determines such advisors are necessary to assist the Committee in carrying out its duties.t
    
Discuss with the Companys  legal counsel legal matters that may have a material impact on the financial statements or of the Companys
 compliance policies and internal controls.t
    
Reporting annually to the shareholders in the Companys Management Information
Circular prepared for the annual and general meeting of shareholders on the carrying
out of its responsibilities under this charter and on other matters as required by
applicable securities regulatory authorities.
 IV.
    
    Meetings
   52




---



##### 



53




---



##### 



Schedule A
 Independence Requirements under Multilateral Instrument 52-110 Audit Committees
 Audit Committees
  (a)
    
    an individual who is, or has been within the last three years, an employee or executive
officer of the Company;(b)
    
    an individual whose immediate family member is, or has been within the last three years, an
executive officer of the Company;(c)
    
    an individual who:
 (i)
    
    is a partner of a firm that is the Companys internal or external auditor;(ii)
    
    is an employee of that firm, or(iii)
    
    was within the last three years a partner or employee of that firm and
personally worked on the Companys audit within that time;
 (d)
    
    an individual whose spouse, minor child or stepchild, or child or stepchild who shares a home
with the individual:
 (i)
    
    is a partner of a firm that is the Companys internal or external auditor;(ii)
    
    is an employee of that firm and participates in its audit, assurance or tax compliance
(but not tax planning) practice, or(iii)
    
    was within the last three years a partner or employee of that firm and
personally worked on the Companys audit within that time;
 (e)
    
    an individual who, or whose immediate family member, is or has been within the last three
years, an executive officer of an entity if any of the Companys current executive officers
serve or served at the same time on the entitys compensation committee; and(f)
    
    an individual who received, or whose immediate family member who is employed as an executive
officer of the Company received, more than Cdn.$75,000 per year in direct compensation from
the Company during any 12 month period within the last three years.
    (a)
    
    remuneration for acting as a member of the board of directors or any board committee of the
Company, and
 54




---



##### 



(b)
    
    the receipt of fixed amounts of compensation under a retirement plan (including deferred
compensation) for prior service with the issuer if the compensation is not contingent in any
way on continued service.
  (a)
    
    has previously acted as an interim chief executive officer of the Company, or(b)
    
    acts, or has previously acted, as a chair or vice-chair of the board of directors or of any
board committee of the Company on a part-time basis.
  Additional Independence Requirements under Multilateral Instrument 52-110 Audit Committees
  (a)
    
    has a relationship with the Company pursuant to which the individual may accept, directly or
indirectly, any consulting, advisory or other compensatory fee from the Company or any
subsidiary entity of the Company, other than as remuneration for acting in his or her capacity
as a member of the board of directors or any board committee, or a part-time chair or
vice-chair of the board or any board committee; or(b)
    
    is an affiliated entity of the Company or any of its subsidiary entities, is considered to
have a material relationship with the Company.The indirect acceptance by an individual of any consulting, advisory or other compensatory fee
includes acceptance of a fee by(a)
    
    an individuals spouse, minor child or stepchild, or a child or stepchild who shares the
individuals home; or(b)
    
    an entity in which such individual is a partner, member, an officer such as a managing
director occupying a comparable position or executive officer, or occupies a similar position
(except limited partners, non-managing members and those occupying similar positions who, in
each case, have no active role in providing services to the entity) and which provides
accounting, consulting, legal, investment banking or financial advisory services to the
Company or any subsidiary entity of the Company.
    55




---



##### 



SCHEDULE B
 Independence Requirements under the American Stock Exchange Company Guideline
  (a)
    
    a director who is, or during the past three years was, employed by the
company or by any parent or subsidiary of the Company, other than
prior employment as an interim Chairman or CEO;(b)
    
    a director who accepts or has an immediate family member who
accepts any payments from the Company or any parent or subsidiary of
the Company in excess of US$60,000 during the current or any of the past
three fiscal years, other than the following:
 (1)
    
    compensation for Board service,(2)
    
    payments arising solely from investments in the Companys securities,(3)
    
    compensation paid to an immediate family member who is a non-executive
employee of the Company or of a parent or subsidiary of the Company,(4)
    
    compensation received for former service as an interim Chairman or CEO,(5)
    
    benefits under a tax-qualified retirement plan,(6)
    
    non-discretionary compensation,(7)
    
    loans permitted under Section 13(k) of the Exchange Act,(8)
    
    loans from a financial institution provided that the loans (i) were made in
the ordinary course of business, (ii) were made on substantially the same terms,
including interest rates and collateral, as those prevailing at the time for
comparable transactions with the general public, (iii) did not involve more than a
normal degree of risk or other unfavorable factors, and (iv) were not otherwise
subject to the specific disclosure requirements of SEC Regulation S-K, Item 404, or(9)
    
    payments from a financial institution in connection with the deposit of funds
or the financial institution acting in an agency capacity, provided such payments were
(i) made in the ordinary course of business, (ii) made on substantially the same terms
as those prevailing at the time for comparable transactions with the general public,
and (iii) not otherwise subject to the disclosure requirements of SEC Regulation S-K,
Item 404.
 (c)
    
    a director who is an immediate family member of an individual who is, or has been in any of
the past three years, employed by the Company or any parent or subsidiary of the company as an
executive officer;
 (d)
    
    a director who is, or has an immediate family member who is, a partner in, or a controlling
shareholder or an executive officer of, any organization to which the company made, or from
which the Company received, payments (other than those arising solely from investments in the
Companys securities or payments under non-discretionary charitable contribution matching
programs) that exceed 5% of the organizations consolidated gross revenues for that year, or
US$200,000, whichever is more, in any of the most recent three fiscal years;
 (e)
    
    a director of the Company who is, or has an immediate family member who is, employed as an
executive officer of another entity where at any time during the most recent three fiscal
years any of the Companys executive officers serve on that entitys compensation committee;
 56




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##### 



(f)
    
    a director who is, or has an immediate family member who is, a current partner of the
Companys outside auditor, or was a partner or employee of the companys outside auditor who
worked on the Companys audit at any time during any of the past three years.
 57