New Resource Estimate for North Zone is Pending
Decline Productivi
ty Increased
Power Line Permit Received
February 13, 2008, Vancouver, BC - Farallon Resources Ltd. ("Farallon"; or the "Company") (TSX: FAN; OTCBB: FRLLF) announces an update on activities at its G-9 polymetallic (zinc, copper, gold, silver, lead) project at Campo Morado in Guerrero State, Mexico. Several developments have occurred to advance the project towards the target goal of production by July 1, 2008. The project faces numerous challenges to meet this goal but adjustments to operating strategies are continually being assessed to keep the project on track.
The 2007 infill drilling program at the North Zone has been completed. A new deposit block model is currently being developed, following which a new resource estimate for the North Zone will be prepared using a combination of in-house expertise and outside consultants. Behre Dolbear of Denver has been retained to assess the inferred, indicated and/or measured resource classifications for the North Zone. This work is now expected to be completed at the end of February, after which a revised mine plan for the entire G-9 deposit will be developed, incorporating the new resource estimates of the Southeast, Abajo and North zones.
Through the retention of services from JDS Mining & Energy and Wabi Development Corporation, Farallon has been able to significantly improve productivity in the underground decline. Current lengths of the twin declines being used to access the Southeast and North zones, respectively, are 617 and 706 metres. Since the start of the New Year, advance rates of up to 6 metres per day have been achieved over a sustained period in each decline; however, poor ground conditions have recently hampered advancement rates. Farallon, JDS and Wabi are continuing to seek ways to improve on these results and plan for mitigation of poor ground conditions encountered in the future. Every effort, including the early purchase of additional mining equipment is being made to assist in these initiatives. Farallon and McIntosh Engineering will be investigating design changes to keep the project on track.
Mill site construction activities have ramped up significantly. Mill purchase orders to date are reported to be 87 % complete by the project's engineering procurement and construction management contractor with $28.4 million committed to date for their work. The design engineering is nearing completion, with engineering drawing for construction 95% completed. Construction contractors selected to date have mobilized and are increasing work force levels weekly to meet the construction schedule. Progress is advancing well on the Tailings Storage and Water Diversion Facilities. Once mechanical and electrical contracts are let, which is expected shortly, all key construction contracts for the plant will have been awarded.
In other developments, the Company has received its permit (Manifestacion de Impacto Ambiental or Environmental Impact Statement) for the main power line to the site from the Mexican Secretariat of Environmental and Natural Resources (Secretaría de Medio Ambiente y Recursos Naturales, or SEMARNAT). Farallon also recently received a Cambio de Uso de Suelo (Change of use of Soil), the other permit that is relevant to the power line development, from the SEMARNAT. As previously announced, the construction contract for the power line had previously been awarded to Constructora Vivar S.A de C.V., and the route surveyed in preparation to start.
Dick Whittingto
n said:
"The G-9 Project has progressed significantly over the last few months. Underground productivity has improved significantly and mill site construction is in hand; however, a "full court press"; will be required to complete the mill on time. Receipt of our power line permit completes the permitting process for the project - the team of Farallon employees and various consultants, including Knight Piesold, are to be commended for their efforts. We are looking forward to the new resource estimate for the North Zone. The objective of the drilling program in the North Zone was to convert a significant amount of resources in the North Zone to indicated and/or measured status. This will give the Company added flexibility in mine planning and where the initial production would begin, once a production decision is made.
Exploration will return to the forefront as we add a third drill in March. The second leg of the Farallon growth strategy - to discover another G-9 - will be a prime focus for 2008.";
Farallon is focused on exploration and pre-development of the G-9 deposit at its Campo Morado Property in Guerrero State, Mexico. Under the Company's parallel track program, exploration drilling is delineating the high-grade G-9 deposit, and mine planning, equipment acquisition and site preparations are also taking place with a goal of beginning production in July 2008. Farallon has approximately Cdn$29 million in cash in simple interest daily savings accounts with ScotiaBank and also has arranged a US$20 million Bridge Facility Agreement with Rothschild of London (see Farallon News Release dated December 3, 2007).
For further details on Farallon Resources Ltd. and its Campo Morado property, please visit the Company's website at www.farallonresources.com or contact Investor Services at (604) 684-6365 or within North America at 1-800-667-2114.
ON BEHALF OF THE BOARD OF DIRECTORS
J.R.H. (Dick) Whittington
President & CEO
