Activities Report December 2012

KEY RESULTS

Los Calatos Project

The Company announced a further resource update at its Los Calatos Project in southern Peru in January 2013, following the completion of a 65,677 metre Phase 4 drilling program in October 2012, and the identification of a preferred mining scenario as part of an internal mining options study (using the services of an independent consultant).

The Mineral Resource Estimate includes those mineral resources that are amenable to open-pit and underground bulk mining, reflecting the advanced nature of the project. Mineral resources amenable to open-pit mining are identified as those resources occurring near surface to a vertical depth of 500 metres (viz. above an elevation of 2,500 metres above sea level), while resources amenable to underground bulk mining are identified as those resources occurring below this depth.

The total mineral resource, inclusive of inferred resources, for the preferred mining scenario is as follows:

As previously announced, the mining options study focused on optimising grade and capital expenditure with the objective of yielding more attractive financial returns for the project. With the completion of the Mineral Resource Estimate, and identification of a preferred mining scenario, open-pit optimisation work and underground mining (block caving) studies are currently being undertaken to ascertain high-level estimates of production, operating costs and capital costs in support of a decision to proceed with a pre-feasibility study in late Q1 2013.

Mollacas Copper Leach Project

Metminco's current focus is to advance the development of the Copper Leach Project. Accordingly, the geotechnical work in support of the planned open pit has been completed, as has the geotechnical design work for the heap leach pads. Preparatory work for the Phase 3 metallurgical test work continues, with final column leach tests to commence in early Q1 2013 and be completed during Q3 2013.

Vallecillo Polymetallic Project

SRK Consulting (Chile) S.A. ("SRK") completed a further Mineral Resource Estimate for the La Colorada deposit during October 2012, which comprises 8.86 million tonnes (12% reduction in tonnes from the previous estimate) containing 227,000 ounces gold, 2.83 million ounces silver, 89,645 tonnes zinc, 27,960 tonnes lead and 6,036 tonnes copper. With the improved confidence levels of the Mineral Resource Estimate, 91% of the mineral resource has been categorised as measured and indicated mineral resources.

Following the completion of the latest Mineral Resource Estimate, an internal scoping study is to be initiated during Q1 2013 to evaluate different mining options, and ascertain the economics of La Colorada as a polymetallic, open pit operation, using a metallurgical process that provides for a gravity circuit in combination with a conventional flotation circuit.

Subject to the outcome of this scoping study, the Company may progress the project towards production. The Company will continue to explore the larger project area (199 km²) for targets similar to La Colorada.

TECHNICAL SUMMARY

Los Calatos Project

With the completion of the Phase 4 drilling program at Los Calatos (Appendix 1), the Company commissioned SRK to generate an updated Mineral Resource Estimate for its 100% owned copper - molybdenum project in southern Peru.

The Mineral Resource Estimate undertaken by SRK incorporates the drilling results from 138 drill holes totalling 125,393 metres, of which 103 drill holes intersected the interpreted mineralised unit.

In order to establish a regular sample support length, samples were composited to 5 metres with a total number of 12,560 composites having been used to interpolate the model. Further, the block model provided for a block size of 15 x 15 x 15 metres, and densities for the mineralised unit were based on 5,654 samples from 65 drill holes.

The mineral resource for Los Calatos has been estimated in conformity with the JORC Code (2004) and the CIM Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (NI 43-101).

Geological model

The mineralised porphyry system at Los Calatos is typical of the Andean type porphyry systems found in Chile and Peru. Appendix 2 demonstrates the vertical nature of the porphyry system developed at Los Calatos, and the close association of copper and molybdenum mineralisation with both the porphyry system and the younger diatreme complex.

A 3-D geological model produced by Metminco was submitted to SRK for the construction of a block model to derive the January 2013 Mineral Resource Estimate.

Separate copper and molybdenum models were developed and estimated and then reported using a copper equivalent cut-off grade.

The mineralised solid model produced by SRK provided for copper isogrades of 0.25% and 0.075%m and a molybdenum isograde of 0.013%. Figure 1 below shows the mineralised solid models for the 0.25% and 0.075% copper isogrades, noting the broader extent of the latter.

Figure 1: Mineralised solid model for copper isogrades 0.25% (red) and 0.075% (blue).

http://www.rns-pdf.londonstockexchange.com/rns/3428W_-2013-1-24.pdf 

SRK verified the continuity of the copper and molybdenum grades across the boundary defined by the isograde shells with the objective of ascertaining whether abrupt changes in grade occurred across these boundaries. The analysis confirmed this to be the case, and hence the latter boundaries were considered as hard boundaries for grade estimation purposes.

The Mineral Resource Estimate was performed on three domains for copper and in two domains for molybdenum, as summarised below:

Copper

·; Domain 1: Estimated on the basis of those composites that fall within the solid model above 0.25% Cu.

·; Domain 2: Estimated on the basis of those composites that fall within the solid model above 0.075% Cu.

·; Domain 3: Given that part of the high grade molybdenum mineralisation lies outside the defined copper envelopes, a third copper domain was designated. This domain contains the high grade molybdenum that lies outside the copper envelopes but also contains low grade copper mineralisation.

Molydenum

·; Domain 1: Estimated on the basis of those composites that occur within the solid model above the 0.013% Mo boundary.

·; Domain 2: Includes those blocks lying outside the 0.013% Mo boundary, but within the low grade copper domains.

The estimation of grades for all domains was conducted using ordinary kriging.

Mineral Resource Estimate

Mineral resources have been estimated for those resources which are amenable to open pit mining to a vertical depth of 500 metres below surface, and for those resources occurring below this depth which are amenable to underground bulk mining.

The resources have been categorised into Measured, Indicated and Inferred Mineral Resources in accordance with the JORC Code (2004) for Reporting Mineral Resources and Mineral Reserves (see Tables 1 and 2 below).

Table 1a: Mineral Resource Statement for the Los Calatos Project to a vertical depth of 500 metres below surface, SRK, January 2013.

Note:

i) Reported at a cut-off of 0.15% CuEq, above a vertical depth of 500 metres below surface.

ii) Rounding-off of figures may result in minor computational discrepancies; where this happens, it is not deemed to be significant.

The copper equivalents are calculated according to the following formula and assumed metal prices and recoveries:

More detailed information on the grade-tonnage profile and sensitivities of the resource to various cut-off grades is contained in Table 1b below.

Table 1b: Sensitivities of mineral resource to CuEq cut-off grades (to a depth of 500 metres below surface)

Table 2a: Mineral Resource Statement for the Los Calatos Project sub-500 metres below surface, SRK, January, 2013.

Note:

i) Reported at a cut-off of 0.35% CuEq, below a vertical depth of 500 metres from surface. Figures have been rounded.

ii) Rounding-off of figures may result in minor computational discrepancies; where this happens, it is not deemed to be significant.

More detailed information on the grade-tonnage profile and sensitivities of the resource to various cut-off grades is contained in Table 2b below.

Table 2b: Sensitivities of mineral resource to CuEq cut-off grades (sub-500 metres below surface)

Comparison - January 2013 and April 2012 Mineral Resource Estimates

A comparison of the January 2013 Mineral Resource Estimate with the April 2012 Mineral Resource Estimate indicates the following:

·; The April 2012 Mineral Resource Estimate anticipated a large scale open pit mining operation as being the most likely development scenario, whereas the January 2013 Mineral Resource Estimate anticipates a smaller open pit operation that transitions into an underground bulk mining operation.

·; As a large percentage of the defined resource is anticipated to be mined via an underground bulk mining operation focussing on the higher grade zones, a higher cut-off grade has been applied for the estimation of those mineral resources deeper than 500 metres below surface, with a consequential reduction in tonnage.

·; The April 2012 Mineral Resource Estimate did not use 'hard boundaries' for constraining grade estimates within the higher grade copper and molybdenum domains identified in the porphyry complex. This potentially resulted in the over-estimation of tonnage and under-estimation of grades, at any given cut-off grade.

·; With the benefit of the additional drilling results, and the application of 'hard boundaries' in the January 2013 Mineral Resource Estimate, the higher grade copper and molybdenum domains are better constrained allowing for improved optimisation.

Mining Options Study

The Company is currently completing a mining options study at Los Calatos as a pre-cursor to commencing a pre-feasibility study, the results of which are expected in Q1 2013. This study has identified a preferred mining option, which is summarised as follows:

1. Development of an initial open pit operation followed by an underground bulk mining operation. The life of the open pit is expected to span the time required to commence underground production (viz. minimum 7 year pit life), with stockpiles from the open pit mining operation feeding the plant during the underground mine ramp up.

2. The Company has placed strong emphasis on grade in the optimisation of the open pit and underground resources so as to ensure an optimal capital expenditure and grade profile. The resource sensitivity tables to cut-off grades (Tables 1b and 2b) indicate that with increasing cut-off grades, the overall copper and molybdenum grades increase significantly.

3. Indicative mine capital and operating costs, as well as mine production schedules are at an advanced stage of completion.

4. Indicative site and off-site infrastructure requirements have been identified and detailed surveys are now underway in support of such.

5. A preliminary metallurgical flowsheet, using conventional flotation technology, has been developed with copper and molybdenum recoveries into separate copper and molybdenum concentrates expected to be 87% and 68% respectively.

6. With the completion of the resource update, the optimisation work on the preferred mining option will now be finalised at a high level, the results of which are to be announced in late Q1 2013.

7. A decision on the commencement of the pre-feasibility study for Los Calatos is anticipated in Q1 2013.

Mollacas Copper Leach Project

Mineral Resource Estimate

With the completion of the final drilling program at the Mollacas Project in early 2012, a further Mineral Resource Estimate was completed by SRK in July 2012.

The Mineral Resource Estimate for the Copper Leach Project, which totals 15.5 million tonnes at a CuT grade of 0.51% in the measured and indicated categories (contained metal of 79,111 tonnes of leachable copper), is to be the subject of a Feasibility Study.

Proposed work program

With the completion of the geotechnical work on the planned open pit and heap leach pads, the planned work will now focus on the Phase 3 metallurgical testwork program, which is scheduled for completion in Q3 2013.

In this regard, the selection of composites and mechanical preparation thereof has been completed, whilst ore characterisation is scheduled for completion in January 2013. The latter is to be followed by column leach tests to be completed in early Q3 2013.

Vallecillo Polymetallic Project

Mineral Resource Estimate

The 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 updated geological model for the deposit.

During October 2012, SRK completed a further Mineral Resource Estimate for La Colorada, based on 75 drill holes totalling 21,528 metres, of which 5,148 metres of mineralised intercepts were used to derive the estimate. Of the drilling, 24 drill holes (6,592 metres) were reverse circulation holes and 51 (14,936 metres) were diamond drill holes. Assay samples were collected, on average, at 1 metre intervals and sampled for gold, silver, zinc, copper and lead. Appendix 3 shows the positions of the drill holes completed, as well as the general geology.

The mineral resource statement for the La Colorada deposit, as summarised in Table 3 below, is reported at a 0.2g/t Au cut-off grade, and classified in accordance with the JORC Standards for reporting Mineral Resources and Mineral Reserves.

Sensitivities of the mineral resource to various Au cut-off grades is summarised in Appendix 4.

Table 3a: Mineral Resource Statement for the La Colorada Polymetallic Project, Ovalle, Chile, SRK, October 11, 2012.

Note: Reported at a 0.2g Au cut-off grade

Table 3b: Contained Metal Content by Resource Category

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

Due to lower gold, silver and zinc grades, and lower tonnes, the contained metal in gold equivalent terms has reduced by approximately 230,000oz by comparison to the June 2009 Mineral Resource Estimate, using a 0.2g/t Au cut-off grade, however, 91% of the resource has been converted to the higher confidence Measured and Indicated Mineral Resource categories.

La Piedra Project

Following the completion of extensive field work, and the interpretation thereof, the decision was made to terminate the La Piedra Option Agreement in December 2012.

CORPORATE

Expiry of Options

During the quarter, the Company received A$363 in funds pursuant to the exercise of 1,450 listed options exercisable at A$0.25, expiring 04 December 2012 (ASX: MCNO). The remaining 27,216,067 options lapsed unexercised on 04 December 2012.

Cash Position and Funding

As announced September 2012, the Company's target was to have uncommitted cash in excess of US$14 million as at 31 December 2012.

As at 31 December 2012, Metminco had cash reserves of A$14.5 million (US$15.0 million).

In accordance with the tax status granted by the Peruvian authorities, Minera Hampton Peru SAC (Hampton Peru), a 100% subsidiary of Metminco and owner of the Los Calatos Project, is authorised to claim back VAT paid on direct project expenditure relating to the Los Calatos Project.

Early January 2013, Metminco's cash reserves increased to A$16.5 million (US$17.1 million) when Hampton Peru received A$2 million (US$2.1 million) relating to recovery of VAT paid on Los Calatos expenditure incurred 01 January 2012 to 30 June 2012.

Hampton Peru anticipates that during 2013 it will recover in excess of A$1.5 million (US$1.6 million) relating to recovery of VAT paid on Los Calatos expenditure incurred 1 July 2012 to 31 December 2012.

The Company is assessing its priorities for the development of its key projects in conjunction with available cash and funding strategies. The Company does not envisage that its funding strategies for 2013 will involve the public equity markets.

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 an open pittable mineral resource of 274 million tonnes at 0.42% CuEq at a cut-off grade of 0.15% CuEq to a vertical depth of 500 metres below surface and an underground bulk mining mineral resource of 1,068 million tonnes at 0.61% CuEq at a cut-off grade of 0.35% CuEq commencing at an elevation of 2,500 metres (approximately 500 metres below surface).

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 Project with a mineral resource of 8.86 million tonnes consisting of a measured resource of 5.5 million tonnes at 0.84g/t Au, 9.99g/t Ag, 1.12% Zn and 0.32% Pb, an indicated resource of 2.6 million tonnes at 0.80g/t Au, 10.23g/t Ag, 0.94% Zn and 0.35% Pb and an inferred resource of 0.8 million tonnes at 0.50g/t Au, 8.62g/t Ag, 0.48% Zn and 0.17% Pb (at a cut-off grade of 0.2g/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 molybdenum 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 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: Summary of Phase 4 drill holes CD-50 to CD-95.