Los Calatos Project Update

DISCUSSION OF RESULTS

Recent drilling results

The drilling results returned to-date for Phase 4 (CD-50 to CD-77) are summarised in Appendix 1.

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, as described in Tables 1 and 2 below, and as depicted in Appendix 2.

Table 1: Objectives of drill holes CD-61 to CD-77

Note: BHID = Borehole identification number

Table 2: Significant drill hole results (CD-61 to CD-77)

The drilling results for the porphyry are generally consistent with the geological and evaluation models used for the April 2012 Mineral Resource Estimate.

However, drill holes CD-61 and CD-64 returned higher grade intersections than were predicted in the evaluation 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 drilling results

The drilling results for Los Calatos can be grouped into three broad categories:

a) High grade breccia (Appendix 2; Figure 2): Mineralisation tends to be well-constrained, occurs close to surface, and is open at 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 2; 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 2; Figure 4): Mineralisation tends to be more diffuse, occurs close to the surface and is open at depths in excess of 1,700m metres. The mineralised porphyry would be incorporated into a Stage 1 and subsequent, larger, open pit.

Revised drilling program

Following completion of the interim Mineral Resource Estimate for Los Calatos in April 2012, which identified a mineral resource of 2.3 billion tonnes at a grade of 0.40% Cu and 210ppm Mo (using a 0.2% Cu cut-off grade), the Phase 4 drilling program was revised to focus on high grade zones 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 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 Q3 2012, following which the Company will announce an updated JORC Mineral Resource Estimate. 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 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.

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 copper 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.

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 hole results.

APPENDIX 2

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

Please follow link to view diagram.

http://www.rns-pdf.londonstockexchange.com/rns/5553I_-2012-7-26.pdf

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

Please follow link to view diagram.

http://www.rns-pdf.londonstockexchange.com/rns/5553I_-2012-7-26.pdf

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

Please follow link to view diagram.

http://www.rns-pdf.londonstockexchange.com/rns/5553I_-2012-7-26.pdf

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

Please follow link to view diagram.

http://www.rns-pdf.londonstockexchange.com/rns/5553I_-2012-7-26.pdf

Abbreviated Glossary

Assay

An analysis to determine the presence, absence or quantity of one or more chemical components.

Base Metal

A metal, such as copper, lead, nickel, zinc or cobalt.

Block caving

A method of underground mining in which large blocks of ore are undercut, causing the ore to break or cave under its own weight enabling extraction of the ore at a relatively low cost.

Breccia

Rock fragmented into angular components.

Circuit

A processing facility for removing valuable minerals from the ore so that it can be processed and sold.

Copper (Cu)

A ductile, malleable base metal with a myriad of uses in construction (piping, wire) and electronics due to its high electrical and thermal conductivity and good resistance to corrosion.

Copper equivalent (CuEq)

Copper equivalent is generally based on the value of the non-copper by-products (such as gold and molybdenum) relative to the copper price. For example, at a long term copper price of US$2.75 per pound of copper and a molybdenum price of US$12.50 per pound, 1 pound of molybdenum is equivalent to 4.5 pounds of copper.

Diamond drilling / drill hole

A method of obtaining a cylindrical core of rock by drilling with a diamond impregnated bit.

Diatreme

A diatreme is a breccia-filled volcanic pipethat was formed by a gaseous explosion. Diatremes often breach the surface and produce a tuff cone, a filled relatively shallow crater known as a maar, or other volcanic pipes.

Drill core

The long cylindrical piece of rock brought to surface by diamond drilling.

Feasibility Study

A feasibility study is an evaluation of a mineral resource to determine whether it can be mined effectively and profitably. It includes the detailed study of reserve estimation, mining methods evaluation, processing technique analysis, capital and operating cost determination and the process effect on the environment and community. This detailed study forms the basis for capital estimation, and provides budget figures for the development of the project. It requires a significant amount of formal engineering work and an accuracy within 10 to 15%.

Geo-domain

Homogeneous geological domains within a deposit identified on the basis of spatial continuity of grades and geological features such as lithology, mineralogy and alteration.

Gold (Au)

A heavy, soft, ductile, malleable precious metal used in jewellery, dentistry, electronics and as an investment.

Grade

The amount of valuable metal in each tonne or ore, expressed as grams per tonne for precious metals and percent in the case of copper and parts per million (ppm) in the case of molybdenum. Cut-off grade - is the minimum metal grade at which a tonne of rock can be processed on an economic basis. Recovered grade - is the actual metal grade realised by the metallurgical process and treatment of ore, based on actual experience or laboratory testing.

Indicated Mineral Resource

An 'Indicated Mineral Resource' is that part of a Mineral Resource for which tonnage, densities, shape, physical characteristics, grade and mineral content can be estimated with a reasonable level of confidence. It is based on exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes. The locations are too widely or inappropriately spaced to confirm geological and/or grade continuity but are spaced closely enough for continuity to be assumed.

Inferred Mineral Resource

An 'Inferred Mineral Resource' is that part of a Mineral Resource for which tonnage, grade and mineral content can be estimated with a low level of confidence. It is inferred from geological evidence and assumed but not verified geological and/or grade continuity. It is based on information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes which may be limited or of uncertain quality and reliability.

JORC Code

The Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves sets out minimum standards, recommendations and guidelines for Public Reporting in Australasia of Exploration Results, Mineral Resources and Ore Reserves.

Measured Mineral Resource

A 'Measured Mineral Resource' is that part of a Mineral Resource for which tonnage, densities, shape, physical characteristics, grade and mineral content can be estimated with a high level of confidence. It is based on detailed and reliable exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes. The locations are spaced closely enough to confirm geological and grade continuity.

Metallurgy

The science and technology of extraction of metals from their ores and the refining of metals.

Mineralisation

The concentration of metals and their chemical compounds within a body of rock.

Mineralised envelope

The boundary constraining the extent of the identified mineralisation, as delineated by a nominated grade or cut-off.

Mineral Resource

A concentration or occurrence of material of intrinsic economic interest in or on the Earth's crust in such form, quality and quantity that there are reasonable prospects for eventual economic extraction. The location, quantity, grade, geological characteristics and continuity of a Mineral Resource are known, estimated or interpreted from specific geological evidence and knowledge. Mineral Resources are sub-divided, in order of increasing geological confidence, into Inferred, Indicated and Measured categories.

Molydenum (Mo)

Molybdenum is commonly a by-product of copper mining. It has the ability to withstand extreme temperatures and has a high resistance to corrosion. Molybdenum is widely used as an alloy agent in stainless steel. It is also used to manufacture aircraft parts and industrial motors.

NPV

Net present value is the difference between the present value of a future cash flow from an investment and the amount of investment, where the present value of the expected cash flow is computed by discounting the cash flow at the required rate of return.

Open Pit

A mine that is entirely on surface. Also referred to as open-cut or open-cast mine.

Ore

Rock containing mineral(s) or metals that can be economically extracted to produce a profit.

Pit optimisation study

Pit optimisation studies are used for open pit mine planning to determine those pit limits and mining sequences that yield maximum financial returns based on defined technical parameters, operating costs and commodity prices.

Porphyry

A rock consisting of larger crystals embedded in a more compact finer grained groundmass.

Porphyry copper deposit

A copperdeposit which is associated with porphyritic intrusive rocks and the fluids that accompany them during the transition and cooling from magma to rock. Porphyry copper deposits are typically mined by open-pit methods.

Pre-feasibility study

A preliminary assessment of the technical and economic viability of a proposed project. Alternative approaches to various elements of the project are compared, and the most suitable alternative for each element is recommended for further analysis. Costs of development and operations are estimated. Anticipated benefits are assessed such that some preliminary economic criteria for evaluation can be calculated. Preliminary feasibility studies are completed by a small group of multi-disciplined technical individuals and have an accuracy within 20 to 30%.

Recovery

A term used in process metallurgy to indicate the proportion of valuable material obtained in the processing of an ore. It is generally stated as a percentage of valuable metal in the ore that is recovered compared to the total valuable metal present in the ore.