Pacific Rim options Cerro Gaspar (August 13, 2002)

Vancouver — Pacific Rim Mining (PMU-V) has inked a deal with Brett Resources (BRN-V) on the Cerro Gaspar project, northeastern El Salvador.

The Cerro Gaspar project is situated about 100 km east of Pacific Rim’s El Dorado gold project. According to the joint venture agreement Pacific Rim has the right to earn a 60% interest in the project by making staged exploration expenditures totalling US$1.5 million over five years. Pacific Rim must spend US$100,000 during the first year plus an additional US$150,000 in each of the second and third year. In the fourth year Pacific Rim must up the ante to US$300,000 and in year five spend US$800,000.

Cerro Gaspar is a high-level adularia-sericite epithermal system with a strike length of 5 km. At the south end of the system, a banded quartz vein is exposed by old workings. The vein, which hosts high-grade gold mineralization, can be traced for 200 metre along strike and varies between 1.0 and 2.5 metres in width. A 2.3–metre chip sample across the vein averaged 24.7 grams gold per tonne. Assays from previous drilling performed by Brett Resources returned bonanza grades including: 0.95 metres averaging 26.5 grams gold 147 grams silver; 2 metres grading 18.5 grams gold and 142 grams silver; and 0.65 metres averaging 15.6 grams gold and 67 grams silver.

Moving north 4.5 km, along strike of the same structure, is a large alteration system that is cross-cut by numerous small veinlets and stockworks that typically host low grade gold mineralization. Select chip sampling returned values up to 3.3 grams gold and 7.1 grams gold. Pacific Rim believes that this broad alteration system represents the top of the epithermal system and the bonanza vein to the south is the exposed productive level of the system.

“We like the fact that the top of the system is exposed at Gaspar and that we have an idea of the depth to the bonanza zone where we know there are good grades locally,” said Tom Shrake, CEO of Pacific Rim. “Knowing the elevation of the high-grade mineralization, or productive level, will allow us to use our drilling dollars economically; we can focus on exploring along the strike extent of the target rather than having to first conduct exploratory holes to identify the productive level. Our plan is to conduct a surface sampling and geologic mapping program to identify drill targets. This work will commence in the coming months as the rains diminish and the vegetation recedes, permitting more efficient access to the surface exposures.”

On the financial front, the newly amalgamated Pacific Rim posted a loss of US$1.6 million, or 3 per share, over the four months ended April 30, 2002. The loss is comprised of $1.0 million of general and administrative costs which include one time accrued severance costs and amalgamation costs related to the Pacific Rim-Dayton amalgamation. In addition, US$200,000 went towards exploration expenditures at the El Dorado project in El Salvador. Another US$400,000 was attributed to an operating loss for the Denton-Rawhide mine in Nevada.

The operating loss at the Denton-Rawhide mine compares with a loss of US$1.8 million for the year ended December 31, 2001. The improvement is attributed to a higher gold price as well as lower cash production costs which were pegged at US$230 per oz – a US$17 improvement over last year.

At the end of April Pacific Rim had a working capital of US$8.6 million. The company’s cash flow was $1.0 million for the period ended April 30 and was primarily the result of the amalgamation.

More recently, the company made US$1.8 million on the sale of Silver Standard Resources (SSO-V) shares tendered as payment for the Argentina Diablillos mineral property resulting in a gain of $1.0 million. An additional $US900,000 (market value) of Silver Standard Resources shares were received to complete the Diablillos sales transaction.

Pacific Rim anticipates US$1.3 million in positive cash flow from the Denton-Rawhide mine over the coming year as well as additional proceeds from the liquidation of the company’s interests in the Andacollo mine.