Metminco Regulatory News (MNC)

Level 6

122 Walker St

North Sydney

NSW 2060, Australia

T +61 (0)2 9460 1856

F +61 (0)2 9460 1857

31 January 2012

qUARTERLY ACTIVITIES REPORT & APPENDIX 5B

3 MONTHS TO DECEMBER 2011

HIGHLIGHTS

·; Phase 3 drilling program at Los Calatos was completed during Q4 2011. The Phase 4 drilling program commenced during December 2011. At time of release, 8 drilling rigs were operating at Los Calatos with over 10,000 metres of the 100,000 metre program having been completed

·; The mineralised envelope at Los Calatos remains open to the southeast beyond drill hole CD-47 and to the northwest beyond drill hole CD-45, with the length of the mineralised envelope now exceeding 1,200 metres

·; Final results from the Phase 3 drilling program completed in Q4 2011 include:

·; Infill drilling at the Mollacas copper leach project confirms copper grades of up to 1.01% in the supergene enrichment zone. Results include:

·; Drilling program at the Vallecillo Project, La Colorada deposit, completed. Initial drill hole results confirm grades of up to 1.66 g/t Au (drilled width = 37 metres) and 1.56% Zn (drilled width = 48 metres). Further assay results awaited

·; Drilling to commence at La Piedra in February 2012, to be followed by Camaron later in the first quarter of 2012

To view the full Quarter Activity Report press release including images and maps please visit the Company's website www.metminco.com.au or download the following pdf document http://www.rns-pdf.londonstockexchange.com/rns/4554W_-2012-1-31.pdf 

OPERATIONS - PERU

Los Calatos Project

The Phase 3 drilling program at Los Calatos, designed to delineate the extent of the mineralisation associated with the porphyry system, was concluded during December 2011. In total, 34,200 metres of diamond drilling were completed (Table 1). During the December quarter, 13,490 metres of drilling was completed, inclusive of drilling conducted as part of the Phase 4 program.

Drilling completed during the quarter as part of the Phase 3 program continued to facilitate an improved understanding of the Los Calatos porphyry system and its associated geology. Drill holes CD-40, 42 and 46 in particular returned significant results, with Cu mineralisation of >0.3% occurring over cumulative intercepts in excess of 500 metres. Drill hole CD-47 returned a grade of 1.03% over a cumulative drill intercept of 347 metres, demonstrating continuity of high grade mineralisation to the southeast in the diatreme complex.

Drill holes CD-43, 44 and 48 were drilled to test the younger rhyolite plug to the southeast of the diatreme complex, and although quartz sericite alteration was identified, the intercepts did not encounter economic mineralisation. However, these intercepts, in conjunction with the combined Phase 3 results, provided a good understanding of the mineralised envelope associated with the Los Calatos porphyry system, and a good reference base for optimising the Phase 4 drilling program.

The Phase 4 drill program provides for a total of 100,000 metres of infill drilling comprising two sub-phases:

·; Phase 4a: This will comprise approximately 30,000 metres of diamond drilling with a drill hole spacing of 100m x 200m, to be completed during the second quarter of 2012, followed by a further resource estimate to be completed by mid-2012

·; Phase 4b: This will involve 70,000 metres of diamond drilling at a drill hole spacing of 100m x 100m to be completed by the end of 2012, followed by a further resource estimate which is to be completed in early 2013

On completion of Phase 4b and an upgraded resource estimate, a pre-feasibility study will be initiated, which is scheduled for completion by the end of 2013.

Eight drill machines are currently operating on site, having commenced drilling operations in late December 2011.

As of the date of reporting, over 10,000 metres of the Phase 4a drill program had been completed.

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

Table 1: Los Calatos Project: Summary of Phase 3 drill hole results. (Continued)

Table 1: Los Calatos Project: Summary of Phase 3 drill hole results. (Continued)

Table 1: Los Calatos Project: Summary of Phase 3 drill hole results. (Continued)

Table 1: Los Calatos Project: Summary of Phase 3 drill hole results. (Continued)

OPERATIONS - CHILE

Extensive drilling programs comprising both diamond drilling and reverse circulation drilling have recently been completed at the Mollacas and Vallecillo (La Colorada) projects, aimed principally at upgrading the existing JORC-compliant resources.

Mollacas Project

At the Mollacas Project, a drilling program comprising 1,154 metres of reverse circulation drilling and 2,250 metres of diamond drilling was completed during Q3 2011.

The drill holes formed part of an in-fill drilling program aimed at converting currently defined resources into JORC-compliant Measured and Indicated Resource categories, as well as to define the outer limits of the oxide and supergene mineralisation.

Assay results for drill holes MD-61 to MD-84 have all been received (Table 2), which in conjunction with the associated geology, will form the basis for completing a final resource estimate for the project. Confirmatory metallurgical testwork continues in the form of sample selection for tall column leach testwork to facilitate the optimal design of the plant and leach circuit.

Of the 24 drill holes that were completed, drill holes MD-61, 67, 70, 74, 76, 81 and 83 returned the highest oxide and supergene hosted copper values, ranging from 0.47% to 0.78% copper in the oxide zone and from 0.45% to 1.01% copper in the supergene zone. Widths of the combined oxide and supergene zones for the aforementioned drill holes varied from 12 to 68 metres.

The Company is close to finalising the environmental base line study for the project and has completed the purchase of land and water rights for its development. Further, and on completion of a new, upgraded, resource statement for Mollacas, a feasibility study will be initiated.

It is anticipated that the application to the Chilean Government authorities for a development licence will be completed by Q4 2012.

Table 2: Mollacas - Summary of drill hole results (MD-61 to MD-84).

Vallecillo Project

The project comprises two broad target zones, namely a Polymetallic-Breccia Zone, and a Cu-Au Breccia Zone, where the former includes the La Colorada deposit, and the latter is known as Portezuelo.

A drilling program comprising 9,155 metres of diamond drilling and 3,768 metres of reverse circulation drilling has recently been completed at the Vallecillo Project.

The 12 reverse circulation drill holes targeting the Portezuelo Cu-Au porphyry target returned uneconomic Cu, Mo and Au grades, and confirmed that the geophysical anomaly identified, related primarily to the occurrence of pyrite, and an elevated water table. Accordingly, no further exploration work will be scheduled for the area.

The diamond drilling program, which focussed on the La Colorada deposit (28 drill holes) and some of the adjoining polymetallic targets (6 drill holes), was completed during Q4 2011. The drill holes completed at La Colorada formed part of a 25 x 25 metre drilling grid, targeting both an increase in the resource, as well as an upgrade of the resource into predominantly Measured and Indicated resource categories.

Results for four of the drill holes for which assays have been obtained are summarised in Table 3 below.

Table 3: La Colorada - Drill hole results (as at 31 December 2011).

Gold grades for 3 of the 4 drill holes exceeded 1g/t, varying from 1.17g/t to 1.66g/t over widths of up to 48 metres, whereas Zn grades varied from 0.76% to 1.56%. These grades compare favourably with prior drilling results for La Colorada.

On receipt of the final analytical results for the La Colorada drilling program, an updated resource estimated will be completed in advance of a pre-feasibility study, which is to be commissioned in Q2 2012.

Camaron Project

On completion of the drilling program at Vallecillo, drilling was to be undertaken at Camaron. However, drilling has been postponed due to a delay in access to the project area. The company has made application to the courts in Vicuna, IV Region, Chile, for access rights.

The drilling will test the main Au anomalies identified from soil geochemistry, in addition to the Cu - Mo geochemical anomaly located in the southern extremity of the project area.

Limited geophysics in the form of IP and ground magnetic geophysical surveys has been completed to refine the identified drill targets.

La Piedra Project

The La Piedra tenements cover an area of 60.5 km² and include a number of hydrothermal alteration zones, of which alteration Zone B is the most significant at present. This zone is more than 2km in length and 1km in width, and is exposed at surface over a vertical distance of approximately 600 metres. The Company has successfully completed an access agreement with the landowner covering the La Piedra project.

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

A detailed geological mapping and surface sampling program will be conducted over the Zone "B" area prior to the commencement of the planned diamond drilling.

The drilling, which will now take the form of a reconnaissance diamond drilling program (due to limited road access), will focus on Zone 'B' in an endeavour to test the identified Cu-Au-Mo anomalism. This program will precede Camaron, and be conducted during Q1 of 2012.

CORPORATE

A$40 million Capital Raising to Institutional Investors

On 25 November 2011 the Company announced the successful completion of a A$40 (£25.1) million placement to institutional investors in the United Kingdom, Australia, Asia and Chile by the issue of 285,714,286 new fully paid shares in the Company (Shares) at an issue price of A$0.14 (£0.088) per Share (Placement).

The Placement was completed in two tranches as follows:

·; A$29.7 million by issue of 211,850,000 Shares settled on 2 December 2011; and

·; A$10.3 million by issue of 73,864,286 Shares, approved by shareholders at the Company's Extraordinary General Meeting on 4 January 2012 and settled on 6 January 2012 (Conditional Placing).

Canaccord Genuity, Liberum and Canaccord BGF acted as brokers for the Placement.

Rights Issue

On 24 November 2011, the Company announced a Rights Issue of one new share (New Share) for every twenty Shares held by Australian and New Zealand resident shareholders (Eligible Shareholders) in Metminco on 14 December 2011 at an offer price of A$0.14 per New Share. The Rights Issue closed on 3 January 2012 with 1,211,141 New Shares (approximately 2% of the Right Issue offer) being subscribed for by Eligible Shareholders, raising approximately A$0.2 million. The Rights Issue was undersubscribed by 67,349,599 Shares (Shortfall Shares). The Directors have resolved not to place the Shortfall Shares.

Cash Position

Following completion of the A$40 million capital raising, the Company is fully funded to deliver the 2012 work programs including the approximately 100,000 metre diamond drilling program at Los Calatos, the detailed feasibility study and pre-development work at Mollacas and the pre-feasibility study at Vallecillo.

As at 31 December 2011, Metminco had cash reserves of approximately A$44 million. On 6 January 2012 the Company's cash reserves increased to approximately A$54 million on settlement of the Conditional Placing and the Rights Issue.

William Howe

Managing Director

About Metminco:

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 JORC compliant 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 JORC compliant resource of 17 million tonnes consisting of 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 JORC compliant 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'. Mr Sinclair, as Competent Person for this announcement, has consented to the inclusion of this information in the form and context in which it appears herein.

For further information please contact:

South America:

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

Australia:

Stephen Tainton - GM Investor Relations Ph: +61 (0) 2 9460 1856

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

Broker - BGF Equities

Warwick Grigor / Marcus Freeman Ph: +61 (0) 386 889 100

Public Relations Consultant - Collins St Media

Ian Howarth Ph: +61 (0) 407 822 319

United Kingdom:

Tim Read - Non-Executive Director Ph: +44 (0) 777 072 1809

Nomad and Joint Broker - Canaccord Genuity Limited

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

Joint Broker - Liberum Capital Limited

Michael Rawlinson / Clayton Bush Ph: +44 (0) 203 100 2227

Financial Public Relations Consultant - Buchanan

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

Rule 5.3

Appendix 5B

Mining exploration entity quarterly report

Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98, 30/9/2001.

Consolidated statement of cash flows

Payments to directors of the entity and associates of the directors

Payments to related entities of the entity and associates of the related entities