Metminco Regulatory News (MNC)

Metminco Limited (LSE: MNC)

("Metminco" or "the Company")

QUARTERLY ACTIVITIES REPORT for THE Quater Ended JUNE 2011.

Highlights

·; Purchase of 50% of SCM Ovalle resulting in 100% ownership of the Mollacas copper leach project, the Vallecillo Au-Zn project and the Loica Cu-Mo deposit in Chile.

·; Acquisition of Barrick's potential ¨buy back right¨ in respect to the Los Calatos project.

·; A$30.4 million capital raising.

·; Contract awarded for a 16,000m RC and 12,000m diamond drilling program at the Mollacas, Vallecillo and Camaron projects in Chile to be completed this calendar year.

·; Option agreement executed to purchase 100% of the La Piedra Cu-Au-Mo porphyry project.

·; Deep drilling at the Los Calatos project confirms classic porphyry system with significant intersections including:

CD 27 : 798 metres @ 0.50% Cu and 288ppm Mo 1

Including 406 metres @ 0.65% Cu and 442ppm Mo

CD 31 : 1,340 metres @ 0.64% Cu and 360ppm Mo 1

Including 255 metres @ 1.68% Cu and 310ppm Mo

(1 = further assay results awaited)

 OPERATIONS

Chilean Projects

In Chile, Metminco has commissioned the company, Major Drilling, to conduct a drilling program comprising 16,000 metres of Reverse Circulation (RC) drilling and 12,000 metres of diamond drilling at the Mollacas, Vallecillo and Camaron projects. This drill program is expected to be completed by the end of 2011. The drilling at Vallecillo and Camaron will be preceded by IP and ground magnetic geophysical surveys to help refine drill targets.

Mollacas project, Chile

At the Mollacas project the Company continued to purchase land adjacent to the deposit in preparation for the development of the project. Diamond drilling of a further 26 holes (3,000m) commenced in late June 11 to provide final in-fill drill data for conversion of all mineral resources at Mollacas to measured and indicated status and to provide sufficient material for further metallurgical testwork.

RC drilling of 12 holes (2,000m) will be undertaken to provide clearance for infrastructure development and for hydrogeological and hydrological studies to be conducted. Base line environmental studies have commenced to provide information for a feasibility study.

Vallecillo and Camaron projects, Chile

The Company has commissioned the geophysics company Geodata to undertake a ground magnetic and IP survey over the Vallecillo and Camaron tenements to refine drill targets ahead of commencement of drilling.

At Vallecillo the Company will complete a 6,000m in-fill diamond drill program at the La Colorada deposit for conversion of all inferred mineral resources at La Colorada to measured and indicated status ahead of a pre-feasibility study to commence first quarter 2012. A further 3,000m of diamond drilling will test several Au-Pb anomalies in the vicinity of the La Colorada deposit.

A first phase RC drilling program comprising 7,000m (20 drill holes) is designed to test the upper part of the Cu-Au porphyry system for supergene Cu enrichment, and to give some indication of the potential of the primary zone below the enrichment zone.

At Camaron RC drilling of 20 holes ( 7,000m) will test the main Au soil geochemistry anomalies in addition to identified from surface geochemistry and the Cu - Mo geochemical anomaly in the south of the project area.

La Piedra project, Chile

The La Piedra Project is located 75km from Santiago, the capital of Chile, and approximately 35km from the Los Bronces (Anglo American) and Andina (Codelco) Cu-Mo mines. Los Bronces and Andina produced 221,400 and 209,727 tonnes of copper in concentrate and cathode respectively in 2010. Both mines also produce significant amounts of molybdenum.

The La Piedra tenements cover an area of 60.5sq.km. The tenements cover a number of hydrothermal alteration zones of which alteration zone B is the most important. This alteration zone is more than 2km in length and 1km in width, and is exposed at surface over a vertical distance of approximately 600m.

Hydrothermal breccias and porphyry intrusives are the dominant rock types associated with the alteration zones.

Metminco plans to conduct surface mapping and sampling as well as a surface geophysical survey (ground magnetics and IP), prior to commencing a RC drilling program to test the copper anomaly in the first quarter 2012.

Los Calatos Project, Peru

The current drilling program at Los Calatos is specifically designed to provide detailed information on the extent of the alteration system at Los Calatos, as well as the width and depth potential of the mineralisation associated with the porphyry system.

To date 15 drill holes totalling approximately 15,500 metres have been, or are close to being, completed as part of the current 50,000 metre Phase 3 drill program (Table 1). In order to test the full extent of the porphyry system evident at Los Calatos, drilling has been undertaken to depths of some 2,000 metres. Four drill rigs are currently operating at Los Calatos, with a further drill rig expected to be operational by mid Q3- 2011.

The main area of interest at Los Calatos is defined by the "LIX capping", which correlates with the underlying, near vertical, porphyry zone, that is developed to depths in excess of 2,000 metres.

The block model used in the estimation of the Mineral Resource announced in July 2010 included drill holes to a vertical depth of 1,100 metres, and a width of mineralisation of up to 500 metres. However, recent drill results indicate that significant intercepts of mineralisation have been encountered to a vertical depth of 1,700 metres, while the width of mineralisation within the porphyry zone increases from 700 metres at surface to approximately 1,000 metres at a vertical depth of 1,500 metres in the central part of the porphyry system.

Drilling into the diatreme has revealed that this part of the system is mineralised, but with lower molybdenum grades than that of the porphyry zone, as demonstrated in drill holes CD 28 and CD 30. This is also true for the porphyry in the northwest, where the "LIX capping" is narrow and less well developed (as is evident in drill hole CD 29).

The Company willnow focus on completing drill holes 1 to 15 (23,000 metres of drilling to test the full strike length of the "LIX capping".

On completion of these drill holes the Company expects to be in a position to commence an in-fill drill program of the mineralised system with a view to completing an updated Mineral Resource estimate for Los Calatos by the end of 2012. The Company will then commission a pre-feasibility study on the project.

Table 1 : Los Calatos Project: Phase 3 drill hole assay results.

 CORPORATE

A$30.4 million Capital Raising

During the quarter ended 30 June 2011 the Company completed a capital raising of A$30.4 million by placement of 80 million new fully paid shares in the Company (Shares) at an issue price of A$0.38 per Share (Placement). The Placement, which was primarily to institutional investors in Australia, Asia, Chile and the United Kingdom, further broadened Metminco's shareholder base and introduced a number of new "cornerstone" investors to the Company.

The capital raising was completed in two tranches as follows:

• A$7.6 million by issue of 20 million Shares at an issue price of A$ 0.38 per Share completed 6 May 2011; and,

• A$22.8 million by issue of 60 million Shares at A$0.38 per Share, approved by shareholders at the Company's Annual General Meeting on 30 May 2011.

BGF Equities acted as the lead manager and underwriter for the Placement.

Surrender of Los Calatos "buy back right" and purchase of remaining 50% of SCM Ovalle

On 28 April 2011 the Company completed the following transactions, which in the opinion of Directors, significantly strengthened the Company's asset base and enhanced long term shareholder value.

·; Surrender of Barrick's ¨buy back right¨ over 51% of the Los Calatos project

Barrick Gold Corporation (Barrick) surrendered a conditional one off ¨buy back right¨ over certain tenements comprisingthe major part of the Los Calatos project in exchange for 75 million Shares.

The risk that Barrick at some future time, may be able to exercise this "buy back right" and in so doing acquire 51% of the Los Calatos project for significantly lower than a resources based market value, has now been removed.

·; Purchase of 50% of SCM Ovalle

The Company purchased a 50% interest in SCM Ovalle from MN Ingenieros Limitada (MN) resulting in SCM Ovalle becoming a wholly owned subsidiary of Metminco. Metminco now owns 100% of the Mollacas copper leach project, the Vallecillo Au-Zn project and the Loica Cu-Mo deposit and paves the way for the development of the Mollacas copper leach project.

Metminco paid consideration of US$35(A$33.9) million satisfied by issue to MN of 70,250,855 Shares and payment of US$10million in cash.

Together with the Placement, these transactions removed the complexity and uncertainty surrounding ownership and the future development timetables and paves the way for the Company to advance the Los Calatos, Mollacas and Vallecillo projects.

Early repayment of $US0.5 million convertible notes

Metminco completed early repayment of convertible notes totalling $US0.5 million by issue of 4,845,000 Shares in satisfaction of principal. The Company also paid US$80,000 in early repayment fees. As previously announced on 1 April 2010, these notes were entered into by Metminco as part of the A$20 million capital raising and admission to the AIM Market of the London Stock Exchange. The majority of funds from this capital raising were applied to acquire Junior Investment Company's 31% stake in Hampton Mining Limited (Hampton) in May 2010 and with it a controlling interest in Hampton which in turn lead to Hampton becoming a wholly owned subsidiary of Metminco in December 2010. There are now no convertible notes outstanding.

Los Calatos Project declared a ¨Project of National Interest¨

On 11 July 2011 the Company announced that the Los Calatos Project had been declared a "Project of National Interest" by the Peruvian Government.

A "Project of National Interest" is an exceptional designation that allows Metminco's wholly owned subsidiary, Minera CN SAC, to acquire surface title to the Los Calatos project tenements, which are located on State-owned barren lands, by direct purchase from the Peruvian government. The general rule is that State-owned property can only be transferred by a public auction.

This designation only applies in circumstances where the project's feasibility and economic benefit for the country can be demonstrated to the Peruvian government.

Metminco believes the designation of the project as a ¨Project of National Interest¨ will significantly assist the Company in procuring the relevant surface rights.

Option to acquire La Piedra Project

Early July 2011, wholly owned subsidiary Minera Hampton Chile Limitada entered into an option agreement to purchase a 100% interest in the La Piedra Project (Option Agreement).

The La Piedra Project is located 75 km from Santiago, the capital of Chile, and approximately 35 km from the Los Bronces (Anglo American) and Andina (Codelco) Cu-Mo mines. Los Bronces and Andina produced 221,400 and 209,727 tonnes of copper in concentrate and cathode respectively in 2010. Both mines also produce significant amounts of molybdenum.

The Option Agreement, as it relates to the acquisition of the La Piedra tenements, includes the following payments:

• US$350,000 on signing the Option Agreement;

• US$350,000 per annum in advance for 2 years to 30 June 2013;

• US$1,000,000 on or before 30 June 2014; and

• US$28 million in cash, or US$14 million in cash and US$14 million in Metminco shares (at

Metminco´s election), on or before 30 June 2015, should the Company elect to purchase 100% of the La Piedra tenements.

The Option Agreement will provide the Company with sufficient time to evaluate the prospectivity of the tenements, and to delineate Mineral Resources, ahead of the option expiry date of 30 June 2015.

Canaccord Genuity Limited appointed as Nomad and Joint Broker and Liberum Capital as Joint Broker on the AIM market

On 26 July 2011 the Company appointed Canaccord Genuity Limited as its Nominated Adviser and joint Broker on the AIM market, and Liberum Capital Limited as joint Broker on the AIM market.

About Metminco:

Metminco is a dual ASX and AIM listed company with a portfolio of copper and gold projects in Peru and Metminco is a dual ASX and AIM listed company with a portfolio of copper and gold projects in Peru and Chile. The Los Calatos project, located in southern Peru, has a JORC compliant Mineral Resource of 926 million tonnes, consisting of an Indicated Resource of 111 million tonnes at 0.39% Cu and 380ppm Mo, and an Inferred Resource of 815 million tonnes at 0.37% Cu and 260ppm Mo (at a 0.2% copper cut-off grade).

The Chilean assets include the Mollacas copper leach project with a JORC compliant Mineral Resource of 17 million tonnes comprising an Indicated Resource of 7.2 million tonnes at 0.56% copper and an Inferred Resource of 9.8 million tonnes at 0.52% copper (at a 0.2% copper cut-off grade), and the Vallecillo gold zinc project with a JORC compliant 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).

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 General Manager Exploration.

Colin Sinclair has sufficient experience (over 30 years) which is relevant to the style of mineralisation and 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, Mineral.For further information contact:

South America:

William Howe - Managing Director Ph: +56 (2) 411 2600

Australia:

Phillip Wing - Executive Director Ph: + 61(0) 412 254 704

Philip Killen - Company Secretary & CFO Ph: + 61(0) 408 609 916

United Kingdom:

Tim Read - Director Ph: +44 (0) 777072 1809

Nomad and joint Broker - Canaccord Genuity Limited

Andrew Chubb / Robert Findlay Ph: +44 (0) 207 050 6500

Joint Broker - Liberum Capital Limited

Michael Rawlinson / Clayton Bush Ph: 44 (0) 20 3100 2227

Financial Public Relations Consultant - Buchanan

Tim Thompson / James Strong / Katharine Sutton Ph: +44 (0) 20 7466 5000

About Metminco:

Metminco is a dual ASX and AIM listed company with a portfolio of copper and gold projects in Peru and Metminco is a dual ASX and AIM listed company with a portfolio of copper and gold projects in Peru and Chile. The Los Calatos project, located in southern Peru, has a JORC compliant Mineral Resource of 926 million tonnes, consisting of an Indicated Resource of 111 million tonnes at 0.39% Cu and 380ppm Mo, and an Inferred Resource of 815 million tonnes at 0.37% Cu and 260ppm Mo (at a 0.2% copper cut-off grade).

The Chilean assets include the Mollacas copper leach project with a JORC compliant Mineral Resource of 17 million tonnes comprising an Indicated Resource of 7.2 million tonnes at 0.56% copper and an Inferred Resource of 9.8 million tonnes at 0.52% copper (at a 0.2% copper cut-off grade), and the Vallecillo gold zinc project with a JORC compliant 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).

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 General Manager Exploration.

Colin Sinclair has sufficient experience (over 30 years) which is relevant to the style of mineralisation and 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, Mineral.