Mill Production Improves At Copper Mountain Mining

VANCOUVER, BC - The Copper Mountain Mine produced 16.6 million pounds of copper during the quarter ended June 30 , 2012.  During the quarter, the mine completed three shipments of concentrate containing approximately 18.1 million pounds of copper to Japan for smelting and recorded revenues, net of smelter charges and pricing adjustments, of $60.7 million , realizing a gross profit of $6.1 million. The total cash cost of copper sold for the three months ended June 30, 2012 was US$2.15 per pound of copper after gold and silver by-product credits. There are no comparative numbers from the prior year since the concentrator began operating in mid-2011.

Mining activities continued in the Pit 3 area with the push-backs on the western and eastern walls during the quarter averaging approximately 160,000 tonnes per day, an increase of 16% over the previous quarter.  The Company mined a total of 13.5 million tonnes of material, including 2.5 million tonnes of ore and 11 million tonnes of waste during the quarter, resulting in a 4.5 to 1 strip ratio.  The projected life of mine strip ratio is 2.0:1 but higher in the early years.

Mill production continued to improve early in the quarter with mill feed coming entirely from Pit#3.  SAG mill operating time in April reached an average of 91.6% availability as compared to a budgeted availability of 92%.  However, down time due to a scheduled SAG mill discharge liner change, ball mill motors electrical issues, tailings line maintenance, and BC Hydro power interruptions from lightning strikes that knocked the concentrator off line on four separate occasions affected operating time during the last two months of the quarter, resulting in lower than planned production for the quarter.  The mill treated a total of 2.3 million tonnes of ore at an average grade of 0.404% Cu during the second quarter. The Company has resolved the outstanding issues and is confident that it will reach targeted production rates on a consistent basis in the near term.  Copper concentrate production during the quarter totaled 16.6 million pounds of copper, 4,500 ounces of gold, and 113,500 ounces of silver. During the first six months of 2012 the mine completed a total of seven shipments containing approximately 33.9 million pounds of copper, 11,300 ounces of gold, and 248,500 ounces of silver generating $131.7 million in gross revenue net of pricing adjustments.

The company initiated an exploration drilling program in mid-May with the objectives of: 1) converting inferred blocks to the measured and indicated categories, within and peripheral to, planned mining areas; 2) testing depth extents of known mineralization; and 3) testing mineralized areas that are currently outside of the mine plan.╩ Approximately 9,800m of drilling has been completed in 45 holes.  A majority of the drilling (6,000m in 28 drill holes), in both shallow and deep holes, was conducted around and below the Pit 2 area, primarily to infill gaps in the block model and to extend the mineralization to depth and to the north.  Other drilling was conducted at depth below the south end of Pit 3 and on local geophysical targets.  Additionally, close-spaced shallow percussion drilling was carried out along the north side of Pit 2 in order to complete the block model in the near surface areas for mine planning.  Drill results are currently being compiled and the exploration program will continue to complete the planned 20,000 meters of drilling for the 2012 exploration program.

Gross revenues of $75.3 million or $60.7 million after pricing adjustments and treatment charges for the three months ended June 30, 2012 .

Jim O'Rourke, President and CEO of Copper Mountain, remarked "although the concentrator operating time continued to improve early in the quarter, downtime due to SAG mill grates and tailings line wear posed challenges in the last half of the quarter resulting in lower than planned production for the quarter.  Recently a planned shutdown has allowed us to complete outstanding maintenance issues and install the newly designed SAG mill grates which is an important step forward towards us achieving our production goals".

O'Rourke continued,  "Looking to the third quarter, management's efforts are fully focused on optimizing mine and mill operations to incrementally increase the daily tonnage, working towards the concentrator design capacity of 35,000 tons per day. Production during the quarter totaled 16.6 million pounds of copper, an increase of 21% over the prior quarter production.  We are encouraged by continued progress in 2012 towards reaching the mill's design capacity on a consistent basis".

The company's address is 1700  700 W Pender Street, Vancouver, BC V6C 1G8, (604) 682 2992, fax: (604) 682 2993.