Metminco Regulatory News (MNC)

REVIEW OF OPERATIONS

Los Calatos

At Los Calatos an interim mineral resource of 2.3 billion tonnes at 0.40% Cu and 210 ppm Mo (11.9 million tonnes CuEq[1]), demonstrating the world-class nature of the copper-molybdenum deposit, was declared during the quarter (see Table 1).

A major infill drilling program continued during the quarter, focussed at better defining the higher grade zones developed within the overall deposit. This drilling has produced encouraging results, demonstrating that the deposit has the capacity to provide higher grade ore early in the life of any future mining operation, which is likely to have a material and positive impact on the project's economics, particularly in terms of timing of capital expenditure and resulting cash flow.

The remaining drilling this year will focus on converting the high-grade portions of the mineral resource to an Indicated Mineral Resource category. Importantly, the current drilling program has been reduced from 100,000m to 61,000m, resulting in a saving of approximately US$12 million without compromising the quality of the dataset.

Mollacas

At Mollacas, the final drilling program culminated in a total mineral resource estimate for the project of 34.3 million tonnes containing 131,749 tonnes copper and 176,408 ounces gold (see Tables 7a and 7b). Of this, however, a mineral resource of 15.5 million tonnes containing 79,111 tonnes copper has been estimated for the oxide and secondary sulphide zone, which is amenable to leaching ("Copper Leach Project") (see Tables 5a and 5b).

In addition, Metminco has now been able to declare a separate transitional and primary sulphide resource, as well as a gold resource, providing options for the development of the project. Earlier development scenarios have focussed solely on copper recoveries from the Copper Leach Project, and did not capture the potential value of the primary sulphide and gold resource.

The options available to the Company include the following:

a) Proceed with the commissioning of a Feasibility Study in support of the development of the Copper Leach Project. This would preclude the recovery of the copper in the primary sulphide zone, as well as the gold.

b) Conduct a trade-off study to evaluate the merits of a heap leach operation versus a conventional sulphide (flotation) plant, where the latter would facilitate the recovery of the copper and gold associated with the secondary, transitional and primary sulphide zones.

c) Monetise the project through a sale. This may be of interest to a party looking to develop and operate a copper leach project, or to a party who has a suitable metallurgical plant to process the primary and secondary sulphide resource.

In the interim, Metminco's principal focus is to advance the development of the Copper Leach Project. Accordingly, metallurgical column leach test work continues on those ore types comprising the oxide and secondary sulphide zones in order to optimise the process design ahead of a planned Feasibility Study. The latter study has, however, been delayed to late September 2012 to provide the opportunity to evaluate the options alluded to in terms of a) to c) above, by way of comparative financial returns.

Other Projects

Diamond drilling at the Vallecillo Project was completed in January 2012, and all related assay results were received by the end of Q1 2012. The Company is presently refining the current geological model for the La Colorada deposit, which required additional sampling of the available drill core. A 3-D geological model and updated drilling database will then be finalised and submitted to SRK Consulting (Chile) S.A. ("SRK") for resource estimation purposes.

A reverse circulation ("RC") drilling program comprising 12 drill holes has recently been completed in the northern sector of the Camaron Project (Genesis Licences). Although the drilling confirmed the presence of subsurface gold, copper and zinc mineralisation over narrow drill intercepts, the mineralisation style is unlikely to be amendable to bulk mining. As such, the exploration focus will shift to the southern sector of the project, where co-incidental copper and molybdenum anomalies will be drill tested in the medium term.

TECHNICAL SUMMARY

Los Calatos

Interim Mineral Resource Estimate

The interim Mineral Resource Estimate completed in April 2012 incorporates the drilling results from 113 drill holes totalling 90,403 metres, of which 31,550 metres of mineralised intercepts were used in estimating the mineral resource associated with the Los Calatos mineralised envelope.

The Mineral Resource Statement has been reported at a 0.2% Cu cut-off grade, and is categorised into Indicated and Inferred Mineral Resources in accordance with the JORC (2004) standards for Reporting Mineral Resources and Mineral Reserves (Table 1 below).

Table 1: Mineral Resource Statement for the Los Calatos Copper-Molybdenum Project, Arequipa, Peru, SRK Consulting (Chile) S.A., April 19, 2012.

Note: Mineral Resource reported at a 0.2% Cu cut-off.

Appendix 1 provides a grade-tonnage table which demonstrates the sensitivity of the mineral resource to various Cu cut-off grades.

Further, and based on Table 1, the contained metal by resource category is summarised in Table 2 below.

Table 2: Contained Metal Content by Resource Category.

Note: Rounding-off of figures may result in minor computational discrepancies, where this happens, it is not deemed significant.

Recent drilling results

The drilling results returned to date for Phase 4 (CD-50 to CD-77) are summarised in Appendix 2.

As announced on 26 July 2012, and since the release of the Interim Mineral Resource Estimate for Los Calatos in April 2012, 17 drill holes (CD-61 to CD-77) have been completed. The drill holes, as described in Table 3 below, returned intercepts that met, or exceeded, expectations (Table 4 below and Appendix 3 [Figures 1 to 4]).

Table 3: Objectives of drill holes CD-61 to CD-77.

Note: BHID = Borehole identification number.

Table 4: Significant drill hole results (CD-61 to CD-77).

The drilling results for the porphyry are generally consistent with the mineralisation model used for constraining the April 2012 Mineral Resource Estimate.

However, drill holes CD-61 and CD-64 returned higher grade intersections than were estimated in the block model for the high grade breccia zone located on the northern margin of the deposit, with CD-61 returning a grade of 0.97% Cu over 309 metres, and CD-64 returning grades of 1.07% and 1.23% Cu over 63 metres and 42 metres respectively.

Two drill holes (CD-62 and CD-76) were completed on the eastern edge of the mineralised envelope (diatreme complex), which returned grades of 0.53% Cu over 324 metres (CD-62), and 0.59% Cu over 128 metres (CD-76).

Categorisation of mineralisation types

The mineralisation types for Los Calatos can be grouped into three broad categories:

a) High-grade anhydrite breccia (Appendix 3; Figure 2): Mineralisation tends to be well-constrained, occurs near surface, and continues to depths in excess of 1,700 metres. The breccia would constitute the primary focus of an initial, Stage 1, open pit.

b) High-grade diatreme complex (Appendix 3; Figure 3): Mineralisation tends to be well-constrained, occurring within, and peripheral to the diatreme complex. As the associated mineralisation occurs at depths in excess of 500 metres, the identified mineralisation would be exploited as part of a larger open pit, and/or an underground bulk mining (viz. block caving) operation.

c) Low to medium grade porphyry (Appendix 3; Figure 4): Mineralisation tends to be more diffuse, occurs from near surface, and continues to depths in excess of 1,700 metres. The mineralised porphyry would be incorporated into a Stage 1 open pit, and any subsequent, larger, open pit.

Revised drilling program

Following the completion of the mineralisation model used to constrain the April 2012 Mineral Resource Estimate, the Phase 4 drilling program was revised to focus on high-grade zones identified within the Los Calatos mineralised envelope.

In general, the high-grade zones identified within the Los Calatos porphyry system are associated with a well-developed breccia system, and a younger diatreme complex.

Based on a preliminary Company assessment of the drilling, and the fact that the high-grade breccia zone occurs near surface, and persists at depth, the breccia zone will broadly be the focus of an initial, Stage 1, open pit.

The Phase 4 drilling program has therefore been reduced from 100,000 metres to 61,000 metres to focus on the high grade breccia zone, in addition to the high grade zones associated with the diatreme complex. The objective of the remaining drilling is threefold:

·; Definition of geological domains: Delineate the areal extent of the high grade zones that have been identified within the Los Calatos mineralised envelope, and confirm their geological attributes;

·; High-grade anhydrite breccia: Upgrade that part of the current Inferred Mineral Resource which will potentially be included in a Stage 1 open pit, to an Indicated Mineral Resource, ahead of the planned pre-feasibility study; and

·; Diatreme Complex: Develop a better understanding of the high-grade zones that occur within, and peripheral to, the diatreme complex, and their lateral and vertical continuity.

Proposed work program

The revised Phase 4 drilling program is scheduled for completion in early Q4 2012[2], following which a further Mineral Resource Estimate will be finalised in accordance with the JORC Code (2004). This resource update will be followed by the commissioning of a pre-feasibility study in early 2013.

The Company is undertaking an internal mining study to identify the main requirements of the pre-feasibility study. This will address aspects such as pit optimisation studies (and key input parameters), planned seawater pipeline from the coast, the design of a port/loading facility for concentrate, the quantification of the metallurgical testwork required to evaluate the use of sea water for flotation purposes (and refine recoveries) and access to the regional power grid.

As part of the mining study, several conceptual mining scenarios will be evaluated involving the phased development of Los Calatos, commencing with an initial, Stage 1, open pit. These studies will be finalised by the end of 2012, following the completion of an updated Mineral Resource Estimate.

Mollacas

Resource Modelling

With the completion of the final drilling program at the Mollacas Project in early 2012, a further Mineral Resource Estimate was completed by SRK Consulting (Chile) S.A. on 6 July 2012.

The mineral resource model incorporates the results from 119 drill holes (16,280 metres), of which 95 holes are diamond drill holes (12,784 metres) and 24 are reverse circulation holes (3,496 metres).

The Mineral Resource Estimate is reported at a 0.2% Cu cut-off grade, and has been classified in accordance with the JORC Code (2004) for reporting Mineral Resources and Mineral Reserves.

Mineral Resource Estimate

The Mineral Resource Estimate for the Mollacas Project is reported for the oxide and secondary sulphide zone (Tables 5a and 5b), the primary and transitional sulphide zone (Tables 6a and 6b), and for the project as a whole (Tables 7a and 7b). Sensitivities of the mineral resource to various Cu cut-off grades are summarised in Appendix 4.

Appendix 5 provides a cross-section through the Mollacas Block Model, showing the different mineralised zones, as well as the copper grades.

Prior resource estimates have not included the contained gold and the primary sulphide zone.

Oxide and Secondary Sulphide Zone (Copper Leach Project)

The Copper Leach Project was the subject of a Scoping Study conducted in 2008, that supported the robust economics of the project as an open pit, copper leach operation. Exploration work conducted since has improved the confidence levels in the Mineral Resource Estimate to the extent that the associated Inferred Mineral Resource has been fully converted to Measured and Indicated Mineral Resource categories.

The Measured and Indicated Mineral Resource for the oxide and secondary sulphide zone is 15.5 million tonnes containing 79,111 tonnes of leachable copper and 63,663 ounces gold, as categorised in Tables 5a and 5b below. Of the leachable copper, 61,650 tonnes is soluble (15.5 million tonnes at 0.40% Cu).

It must be noted in Tables 5a and 5b below that CuT represents total leachable copper, whereas Cu_Sol represents total soluble copper.

Table 5a: Mineral Resource Statement - Oxide and Secondary Sulphide Zone, Mollacas Project, SRK Consulting (Chile) S.A., July 06, 2012.

Note: Reported at a 0.2% Cu cut-off grade.

Table 5b: Contained Metal Content by Resource Category - Oxide and Secondary Sulphide Zone.

Note: Rounding-off of figures may result in minor computational discrepancies, where this happens, it is not deemed significant.

Of significance is the fact that the Mineral Resource Estimate for the Copper Leach Project of 15.5 million tonnes is lower than that of November 2007 estimate of 17.0 million tonnes, due to the exclusion of the transitional sulphide zone, which accounts for 1.44 million tonnes.

Primary and Transitional Sulphide Zone

A Mineral Resource Estimate has not previously been reported for the primary sulphide zone. Further, the transitional sulphide zone has been combined with the newly defined primary sulphide resource due to the low solubility.

The primary and transitional sulphide zone comprises a Measured, Indicated and Inferred Mineral Resource of 18.8 million tonnes containing 52,638 tonnes copper and 112,745 ounces gold, as categorised in Tables 6a and 6b below.

Table 6a: Mineral Resource Statement - Transitional and Primary Sulphide Zone, Mollacas Project, SRK Consulting (Chile) S.A., July 06, 2012.

Note: Reported at a 0.2% Cu cut-off grade.

Table 6b: Contained Metal Content by Resource Category - Transitional and Primary Sulphide Zone.

Note: Rounding-off of figures may result in minor computational discrepancies, where this happens, it is not deemed significant.

Mollacas Project

The total mineral resource for the Mollacas Project (oxide, secondary sulphide, transitional sulphide and primary sulphide zones) is 34.3 million tonnes containing 131,749 tonnes copper and 176,408 ounces gold, as categorised in Tables 7a and 7b below.

On a copper equivalent basis, and using a long term Cu price of US$2.75/lb and Au price of US$1,500/oz, this translates to 175,400 CuE tonnes.

Table 7a: Mineral Resource Statement for the Mollacas Project, SRK Consulting (Chile) S.A., July 06, 2012.

Note: Reported at a 0.2% Cu cut-off grade.

Table 7b: Contained Metal Content by Resource Category - Mollacas Project.

Note: Rounding-off of figures may result in minor computational discrepancies, where this happens, it is not deemed significant.

Proposed work program

Confirmatory column leach testwork continues at Mollacas to establish a definitive process design for the Copper Leach Project in terms of the envisaged solvent extraction - electrowinning (SX-EW) processing route.

This includes permeability testing on the ore types to be used for the column leach testwork, which will be completed in July 2012, and actual column tests which will commence in mid-August 2012.

The geotechnical study in support of the planned open pit (viz. pit profiles and slopes) is nearing completion, whereas the geotechnical design of the requisite leach pads has been completed.

With the definition of an additional primary sulphide and gold resource, alternative processing routes and related costs will be evaluated to establish comparative financial returns.

The terms of reference for the conduct of the planned Feasibility Study have been prepared, which will form the basis of a tender process by suitable consulting groups. The commencement of the Feasibility Study has recently been deferred to September 2012.

Vallecillo

The recent in-fill drill program completed at the La Colorada deposit in Q1 2012 has, in conjunction with the prior drill results, formed the basis of the current geological model (Appendix 6) for the deposit.

In reviewing the geological model, and the associated style of mineralisation, it became clear that further refinement to the model was required, which necessitated the sampling of previously un-sampled zones, and additional geological analysis of the drill core.

Once the results of the additional sampling program have been received, and the geological model has been refined, a 3-D geological model will be finalised and submitted to SRK for resource estimation purposes. A further Mineral Resource Estimate is thus expected to be completed in late Q3 2012.

Once the updated mineral resource estimate is available, a pre-feasibility study will be commissioned.

Camaron

A reverse circulation ("RC") drilling program comprising 12 drill holes (3,600 metres) has recently been completed in the northern sector of the Camaron Project ("Genesis Licences").

The drilling program was designed to confirm the presence of subsurface mineralisation which resulted in the precious and base metal soil geochemical anomalies identified by the Company in a prior exploration program. In particular, the area covered by the Genesis Licences was assessed to provide the Company with sufficient information to make a decision with respect to the exercise of the current option that allows the Company to increase its interest in the Genesis Licences to 100% under the Genesis Joint Venture Agreement.

The RC drilling intersected numerous narrow zones (< 10 metres) comprising quartz veins and/or breccia's within hydrothermally altered volcanic and/or intrusive rocks, characterised by the presence of anomalous precious and/or base metal mineralisation. Significant mineralised intercepts included a 4.6g/t gold value over a 2 metre sample width (289 to 291 metres) in hole GR-06; a 0.7g/t gold value over 4 metres (68 to 72 metres) in hole GR-05; and a 0.24% copper and 0.52% zinc value over 11 metres (61 to 72 metres) in hole GR-04.

Having assessed the results, the Company decided that, while the drilling has successfully intersected and tested the likely cause for the geochemical and alteration anomalies evident at surface, the mineralisation style is unlikely to be amenable to bulk mining. Accordingly the Company is unlikely to exercise its option under the Genesis Joint Venture Agreement.

However, the remaining project area in which Metminco holds a 100% interest will be retained, and the coincidental copper and molybdenum soil geochemical anomalies identified by previous exploration work, will be drill tested in the medium term.

La Piedra

Limited exploration work was conducted on the project during the quarter.

Work conducted earlier in the year by independent contract geologists included mapping, sampling and the compilation of geological and alteration maps. In addition, two traverses were sampled across the main alteration zone at different elevations in an effort to determine any vertical zonation, and these were submitted for ICP analysis.

While analytical results indicate that anomalous base and precious metal mineralisation occurs along a narrow linear belt of 1,000 metres by 300 metres, the associated geochemical elements indicate that the mineralisation is likely to be relatively distal to a medium to large scale porphyry complex. As such the identified style of mineralisation would not be amenable to bulk mining.

The results of the exploration work completed to-date, including the work conducted by independent geologists, will be assessed prior to initiating any further exploration work.

The Company has successfully negotiated a six-month extension to 30 December 2012 for the payment of the next option fee in order to complete the abovementioned assessment.

CORPORATE

Annual General Meeting of Shareholder

The Company's Annual General Meeting of shareholders for the year ended 31 December 2011 was held at 54 McLaren Street, North Sydney NSW, 2060 on Thursday, 31 May 2012. All resolutions put before the Annual General Meeting were approved by shareholders, and the results can be found on the Company's website.

Cash Position

As at 30 June 2012, Metminco had cash reserves of approximately A$32.3 million.

In June 2012, the Company undertook a detailed review of its work programs for 2012 taking into account information obtained from work undertaken during the first half of 2012 and the need to optimise cash outlays.

The Company has now implemented a revised work plan for 2012, which will achieve the Company's objectives for 2012, but require a lower cash outlay than previously planned. Initiatives include a reduction of the Los Calatos Phase 4 drilling program from 100,000m to 61,000m, saving approximately US$12 million. This followed a decision to focus the remaining drilling on that portion of the current mineral resource which would potentially be exploited in the early years of a future open pit operation.

William Howe

Managing Director

Company Background

Metminco is a dual ASX and AIM listed company with a portfolio of copper, molybdenum and gold projects in Peru and Chile.

The Los Calatos Project, located in southern Peru, has a Mineral Resource of 2,316 million tonnes, comprising an Indicated Resource of 885 million tonnes at 0.42% Cu and 270 ppm Mo, and an Inferred Resource of 1,431 million tonnes at 0.40% Cu and 180 ppm Mo (at a 0.2% copper cut-off).

The Chilean assets include the Mollacas Project with a Mineral Resource of 34.3 million tonnes consisting of a Measured Resource of 19.4 million tonnes at 0.45% Cu and 0.16g/t Au, an Indicated Resource of 9.4 million tonnes at 0.34% Cu and 0.16g/t Au, and an Inferred Resource of 5.5 million tonnes at 0.26% Cu and 0.15g/t Au (at a 0.2% copper cut-off); and the Vallecillo gold/zinc project with a Mineral Resource of 10.1 million tonnes consisting of an Indicated Resource of 7.9 million tonnes at 1.14g/t Au; 11.4g/t Ag; 1.32% Zn; 0.29% Pb and an Inferred Resource of 2.2 million tonnes at 0.78g/t Au; 8.2g/t Ag; 0.58% Zn; 0.26% Pb (at a cut-off grade of 0.3g/t Au).

The Company also has a number of early stage exploration projects where initial exploration activities have identified anomalous copper, molybdenum and gold values.

Competent Persons Statement

The information in this report that relates to Exploration Results and Mineral Resources is based on information compiled by Colin Sinclair, BSc, MSc, who is a Member of the Australasian Institute of Mining and Metallurgy and is a full-time employee of the Company as Executive General Manager.

Colin Sinclair has sufficient experience (over 30 years) which is relevant to the style of mineralisation, 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'. Mr Sinclair, as Competent Person for this announcement, has consented to the inclusion of the information in the form and context in which it appears herein.

SRK Consulting (Chile) S.A.

Metminco supplied SRK with a geological model and the drill data. Copper and gold grades were estimated into a block model using ordinary kriging with GEMCOM software.

The information provided in this ASX Release as it relates to Exploration Results and Mineral Resources of the Mollacas Project is based on information compiled by George G. Even, Principal Geologist of SRK Consulting in Santiago, Chile. Mr Even, a Qualified Person for JORC compliant statements, reviewed the technical information presented in this document. Mr Ernesto Jaramillo, Principal Resource Geologist with SRK Santiago, performed the resource estimation. Mr Even has sufficient experience that is relevant to the style of mineralisation and type of mineral deposit under consideration, and to the activity which was undertaken, to make the statements found in this report in the form and context in which they appear.

Mr Even and Mr Jaramillo have consented to be named in this announcement, and have approved of the inclusion of the information attributed to them in the form and context in which it appears herein.

Forward Looking Statement

All statements other than statements of historical fact included in this announcement including, without limitation, statements regarding future plans and objectives of Metminco are forward-looking statements. When used in this announcement, forward-looking statements can be identified by words such as 'anticipate", "believe", "could", "estimate", "expect", "future", "intend", "may", "opportunity", "plan", "potential", "project", "seek", "will" and other similar words that involve risks and uncertainties.

These statements are based on an assessment of present economic and operating conditions, and on a number of assumptions regarding future events and actions that, as at the date of this announcement, are expected to take place. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties, assumptions and other important factors, many of which are beyond the control of the Company, its directors and management of Metminco that could cause Metminco's actual results to differ materially from the results expressed or anticipated in these statements.

The Company cannot and does not give any assurance that the results, performance or achievements expressed or implied by the forward-looking statements contained in this announcement will actually occur and investors are cautioned not to place undue reliance on these forward-looking statements. Metminco does not undertake to update or revise forward-looking statements, or to publish prospective financial information in the future, regardless of whether new information, future events or any other factors affect the information contained in this announcement, except where required by applicable law and stock exchange listing requirements.

APPENDIX 1

Los Calatos Project: Grade - Tonnage Table

Sensitivity of the Mineral Resource to the copper cut-off grade.

APPENDIX 2

Los Calatos Project: Summary of Phase 4 drill hole results.

APPENDIX 3

Los Calatos Project: Drill hole locality plan and sections.

Figure 1: Cu (%) x Thickness (m) contour plan showing Los Calatos drilling program.

To view this image please follow the link below.

http://www.rns-pdf.londonstockexchange.com/rns/9735I_-2012-7-31.pdf

Figure 2: Section 10300E showing the high grade Cu zones associated with the mineralised breccia system.

To view this image please follow the link below.

http://www.rns-pdf.londonstockexchange.com/rns/9735I_-2012-7-31.pdf

Figure 3: Section 11200E showing the high grade Cu zones associated with the diatreme complex.

To view this image please follow the link below.

http://www.rns-pdf.londonstockexchange.com/rns/9735I_-2012-7-31.pdf

Figure 4: Section 10500E showing the low to medium Cu grades associated with the mineralised porphyry.

To view this image please follow the link below.

http://www.rns-pdf.londonstockexchange.com/rns/9735I_-2012-7-31.pdf

APPENDIX 4

Mollacas Project: Grade - Tonnage Tables.

Sensitivity of Oxide and Secondary Sulphide Mineral Resource to Cu cut-off grade.

Sensitivity of Transitional Sulphide and Primary Sulphide Mineral Resource to Cu cut-off grade.

Sensitivity of Total Mineral Resource to Cu cut-off grade.