PMY: Highly Positive Testwork Results - Lorella Oxide Copper

CORPORATE DIRECTORY

Managing Director

Simon Noon

Directors

Richard Monti (Chairman) Peter Harold (Non-exec.) Andrew Parker (Non-exec.)

Company Secretary

Patrick Holywell

Registered office

Level 10, 553 Hay St

Perth WA 6000

Telephone:

+61 8 6266 8642

Facsimile:

+61 8 9421 1008

Email:

info@pacificominerals.com.au

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• Acid leach testwork on oxide copper mineralisation from the Lorella prospect has returned highly positive results and indicates >90% recoveries, with low acid consumption.

• Previous drilling by Sandfire Resources NL delineated oxide copper mineralisation at shallow depths at the Lorella prospect.

• Potential for SXEW operation to produce cathode copper.

• Work commenced on estimating an inferred resource and exploration target based on potential strike extent.

• Aircore program (2000m) at Lorella is planned for November to test strike extensions to increase potential tonnage of oxide copper, and to test for significant indications of primary copper mineralisation.

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The Borroloola West Joint Venture ("BWJV") consists of 12 exploration licences and 1 mining licence (1,817 km2), The parties to the BWJV are 51% Pacifico Minerals Limited ("Pacifico" or "Company") (ASX code: PMY) and 49% Sandfire Resources NL ("Sandfire Resources") (ASX code: SFR).

Lorella - Oxide copper

Preliminary acid leach test work carried out at SGS Metallurgy in Perth has returned highly positive results and indicates that leaching the oxide copper material could be economically viable. Acid consumption is relatively low and copper recoveries better than 90% were obtained.

There is potential for the construction of a solvent extraction, electrowinning operation ("SXEW") to produce cathode copper within a short lead time, and with relatively low capital and operating costs.

The Lorella prospect lies 100km NE of the McArthur River Mine. The Nathan River Road lies 7km to the west, and the Lorella Springs Road is 9km to the east, both unsealed public roads (Figure 7).

Oxide copper mineralisation is flat lying, beneath about 25m of unconsolidated sands. Sandfire, during 2010 and 2011, carried out an extensive drilling program targeted at primary sulphide copper mineralisation, of which 17 RC holes and 1 diamond hole intersected significant flat-lying oxide copper mineralisation over an area of about 400m x 400m (Figure 2 and Appendices 1 and 2)1.

The oxide copper mineralisation consists of disseminations, blebs, veins and fracture fill of malachite and azurite within highly leached siltstone and fine grained sandstone (Figures 4, 5 and 6). The intersection thickness averages 8m using 0.4% Cu cut-off, and results in an average grade of about 1.0% Cu (Appendix 2). The primary rock is dolomitic and lies within the Amelia Dolomite sequence. However, the carbonate minerals have been almost completely leached out, as reflected by the low acid consumptions in the testwork.

The primary control of the copper mineralisation is considered to be stratigraphic, dipping gently to the west. Elsewhere in the BWJV tenements e.g. at Coppermine Creek, copper mineralised horizons within the Amelia Dolomite are recognised that extend for several kilometres. At Lorella, the distribution of copper mineralisation indicates that it has been oxidised, transported and enriched by supergene processes (Figure 3).

Only 500m of the sub-outcropping strike of mineralisation has been tested previously. There is potential for about 10km of strike (Figure 1) under shallow alluvial cover within the BWJV tenements that is virtually untested. The oxide copper mineralisation is open to the SSE (Figure 2) and there is the likelihood of further lenses to the north west (Figure 1).

Work has commenced on estimating an inferred resource in the area of detailed diamond and RC drilling by Sandfire (Figure 2) and to set an Exploration Target estimate based on the potential strike extent (Figure 1).

Two composite samples from Sandfire's drill core were sent to SGS Metallurgy in Perth for acid leach testwork, which comprised acid leach bottle roll tests performed on two composite samples. The preliminary test results show encouraging copper leach extractions at relatively low acid additions (37kg/t and 44kg/t) for both samples. The key results are summarised below:

1 Sandfire 2010-12 Borroloola Project Group Annual Mineral Exploration Reports GR121-09 to NT Dept Primary Industry & Resources

An aircore program (2000m) is planned for November to test the strike extensions to the NW and SSE of previously intersected oxide copper mineralisation, and also for indications of significant down-dip primary sulphide mineralisation. Holes will be drilled on lines 1km apart, with a hole spacing along the lines of 100m, to an average depth of 50m.

Should this preliminary program be successful, the entire strike length will then be explored with aircore drilling. RC drilling programs, some PQ diamond drill holes, and more comprehensive testwork on the drill chips and core would then be planned to define inferred and indicated resources.