10 m of 31% zinc in Area 8 & 4.2 m of 13.24 grams of gold/tonne in new target area

VANCOUVER, Aug. 10 /PRNewswire-FirstCall/ - Farallon Mining Ltd. ("Farallon" or the "Company") (TSX:FAN) announces that exploration efforts at its G-9 mine in Guerrero State, Mexico, continue to provide excellent results. Several new drill holes - all drilled from underground - along with new interpretations of the geology of the G-9 deposit, have led to several new discoveries adjacent to the G-9 mine and opened up the potential for further discoveries going forward. All of the holes announced in this news release are additive to the Company's resource base and are readily accessible from current workings.

The 2010 exploration program has focused on three priorities:

    1.  Near-mine targets to build mineral reserves and resources and to
        increase the G-9 mine life.
    2.  Identifying and testing other areas of mineralization beyond G-9.
    3.  Identifying and developing gold zones occurring adjacent to the G-9
        mining area.

    Near-mine Targets
    -----------------

Knowledge of the geology of the G-9 deposit, through underground mapping, opening up of new mining areas and underground stope definition drilling, has led to a reinterpretation of the geology in, and around, the G-9 deposit. This has led to some exciting opportunities, some of which are new and some of which are revisiting previous areas that were thought to have been mined out. The attached map (Figure 1 - http://files.newswire.ca/844/Figure1.pdf) highlights hole locations for the holes announced. Selected results are given in Table 1 with highlights as follows:

    1.  Re-opening the West Extension:
        -  The West Extension has been shown to extend above the previously
           known resource with holes UGM10-042 and UGM10-043. Hole UGM10-043
           intersected 6.3 metres of 17.2% zinc, 1.7% copper, 290 g/t silver
           and 1.73 g/t gold.
        -  Drilling has also shown that mineralization extends down-dip from
           the previous resources with holes UGM10-144 and UGM10-150. Hole
           UGM10-150 intersected 28.5 metres of 11.6% zinc, 1.6% copper and
           184 g/t silver.

    2.  North flank of Mining Area 8:
        -  The known resource in mining Area 8 was previously thought to
           "pinch-off" to the North.
        -  Drilling has now shown (UGM10-049 and UGM10-050) that the
           mineralization actually widens and continues to the North towards
           mining Area 3 with drill hole UGM10-050 intersecting 10.0 metres
           of 31.2% zinc, 3.1% copper and 306 g/t silver.

    3.  Extension of Mining Area 3:
        -  Mineralization has now been shown to extend to the South of Area 3
           beyond the previous resources. Drill hole UGM10-195 intersected
           3.9 metres of 22.11% zinc, 4.07 % copper and 136 g/t silver.
        -  Drill hole UGM10-196 intersected 5.0 metres of 24.3% zinc, 3.2%
           copper and 26 g/t silver.
        -  The same drilling also showed mineralization from Area 8 extending
           North towards Area 3 with UGM10-196 also intersecting 6.7 metres
           of 18.2% zinc, 5.8% copper and 50 g/t silver.

    4.  Extension of Mining Area 7:
        -  Mineralization has now been shown to extend to the South and East
           of the previous resources.
        -  Drill hole UGM10-219 intersected 8.0 metres of 9.57% zinc, 1.94%
           copper, 217 g/t silver and 2.85 g/t gold.

    5.  Extension of the Abajo Zone:
        -  The mining operations have completed development to the Abajo zone
           and as such, the first underground exploration holes were drilled.
           Early results show the mineralization extends to the South of
           previously estimates resources.
        -  Drill hole UGM10-222 intersected 12.2 metres of 12.1% zinc, 1.4%
           copper and 209 g/t silver.

Dick Whittington, President and C.E.O. commented "With exploration drilling results now available for the first half of the year's program, we are pleased with the progress that is being made on each of our exploration priorities. The G-9 deposit is exhibiting similar characteristics to other polymetallic VMS deposits worldwide. Once in production, the ability to better understand the geology and define targets near the mine increases significantly, as does the potential for exploration success. G-9 is proving the case in point as new discoveries are being made and old areas of interest are being opened up again, as our knowledge base increases. We continue to be very excited about the potential for further discoveries around the G-9 mine and in the felsic horizon that hosts the G-9 deposit."

    Identification and Testing Other Areas of Mineralization
    --------------------------------------------------------

Earlier in the year, the Company conducted a surface drilling campaign with the objective of finding addition mineralization on the Abajo horizon beyond G-9. Surface drilling identified one specific area of interest north of the Abajo zone to the Southwest of the Naranjo deposit. Hole DDH10-834 (Figure 2 - http://files.newswire.ca/844/Figure2.pdf) intersected pyrite-rich mineralization and alteration at the Abajo contact which is consistent with hydrothermal activity. After evaluating the results of the first phase of surface drilling, the Company decided to proceed with a deep-penetrating Titan 24 Induced Polarization geophysical survey. Surface drilling was suspended to focus on underground drilling until the completion of the survey.

The Titan 24 survey is currently underway with Quantec Geophysics on site. The survey will cover 1.9 square kilometres (Figure 2 - http://files.newswire.ca/844/Figure2.pdf) of the mineralized area at Campo Morado. The results of the survey will, potentially, be useful in delineating areas of potential massive sulphide accumulations underground, which will then be tested by drilling from surface. This will form the basis of the second half of our 2010 exploration program. Boart Longyear currently has two surface diamond drills on site, ready to commence drilling as required.

    Development of Gold Zones
    -------------------------

Subsequent exploration drilling and further analysis of historic drill-hole data have further enhanced the understanding of the gold zones occurring adjacent to the G-9 Mine workings (Figure 3 - http://files.newswire.ca/844/Figure3.pdf). Three new target areas have been identified near drill hole 6546, drill hole 7671 and drill hole UGM10-219. These zones which have high precious metal values and generally low base metal values (Table 2) are outside the previous resource estimate.

In addition, new underground drill results have substantiated the results obtained in the earlier holes that were announced in the news release dated April 21, 2010. Drill hole UGM-073 intersected 11.28 g/t gold over 5.4 metres and drill hole UGM-077 intersected 8.18 g/t gold over 4.7 metres in Gold Zone 1 (Table 2).

The Company is still in the first phase of its three pronged program to quantify the economic potential of these new gold zones. Underground drilling will continue to delineate further zones and resources so that the next phase two can be initiated and these zones can be incorporated into the mining plan at the G-9 Mine. As well, in conjunction with the above the Company is proceeding with a test program to determine the metallurgical characteristics of these zones and, hence, the optimum method to maximize recovery of the gold and silver through the G-9 mill.

Dick Whittington said: "We are very pleased with the progress to date of the gold exploration program around the G-9 mining areas. We are locating additional targets indicating the potential for a more widespread phenomena than previously thought. With the recent strength in the gold price, our ability to add gold-rich resources to the G-9 mining plan has the potential to add significant shareholder value."

Dan Kilby, P.Geo., is the qualified person for Farallon Mining and he has reviewed this news release accordingly. Sample preparation for Acme Labs is done in Guadalajara, Mexico and the analysis is done in Vancouver B.C. Samples analyzed by AcmeLabs are assayed for gold by fire assay fusion with an ICP or gravimetric finish, with the latter method used for additional assays if ICP analysis reportsgrades higher than 10 g/t Au. Silver, copper, lead and zinc, as well as 20 additional elements, are determined for all samples by Agua Regia digestion followed by ICP-ES finish. In the case of silver, re-analysis using gravimetric finish is carried out when ICP-ES analysis reports a grade higher than 300 g/t Ag. In the case of lead and zinc, re-analyses using 0.1 gram splits are carried out if the ICP-ES results report grades higher than 4% Pb and 20% Zn. Re-analyses for copper are not required, due to the linear nature of ICP-ES assay returns over a wide value range that far exceeds the range of copper grades at G-9. If ICP-ES analysis reports zinc grades higher than 10% Zn, the samples are assayed for sulphur, by LECO furnace. Samples analyzed at the on-site laboratory are assayed for silver, copper, lead and zinc by Agua Regia digestion followed by an AA finish. In the case of silver, a second round of Aqua Regia digestion, followed by an AA finish, is carried out when primary analysis reports a grade higher than 300 g/t Ag. Multi-element analyses and gold assays are not currently carried out.

Farallon operates the G-9 zinc mine on its Campo Morado Property in Guerrero State, Mexico. G-9 is a 1,500 tonnes per day, underground zinc mine with important by-product credits of copper, gold, and silver, and with total cash costs(1) in the lowest 10% of zinc producers worldwide. The Company is targeting to produce at an annualized production rate of 120 million pounds of zinc and 15 million pounds of copper per year.

    ON BEHALF OF THE BOARD OF DIRECTORS
    J.R.H. (Dick) Whittington
    President & CEO

No regulatory authority has approved or disapproved the information contained in this news release

Note 1 - Total cash costs are a non-GAAP financial measure. Please refer to the Company's most recent MD&A filed on SEDAR or on the Company's website for more information.

Forward Looking Information

This news release includes certain statements that may be deemed "forward-looking statements." All statements in this release, other than statements of historical facts, that address future production, reserve or resource potential, continuity of mineralization, exploration drilling, operational activities, production rates, costs to completion and events or developments that the Company expects, or is targeting, are forward-looking statements. Although the Company believes that the expectations expressed in such forward looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward looking statements and may require achievement of a number of operational, technical, economic, financial and legal objectives. The likelihood of continued future mining at Campo Morado is subject to a large number of risks, including obtaining lower than expected grades and quantities of mineralization and resources, lower than expected mill recovery rates and mining rates, changes in and the effect of government policies with respect to mineral exploration and exploitation, the possibility of local disputes including blockades of the company's property, the possibility of adverse developments in the financial markets generally, fluctuations in the prices of zinc, gold, silver, copper and lead, obtaining additional mining and construction permits, preparation of all necessary engineering for ongoing underground and processing facilities as well as receipt of additional financing to fund mine construction, development and operation, if needed. Such funding may not be available to the Company on acceptable terms or on any terms at all. For more information on the Company and the risk factors inherent in its business, investors should review the Company's Annual Information Form at www.sedar.com.

Table 1.

    -------------------------------------------------------------------------
    Drill                                          True
    Hole        Mining   From      To    Interval  Width   Au   Ag   Cu   Zn
    Number       Area  (metres) (metres) (metres) (metres) g/t  g/t   %    %
    -------------------------------------------------------------------------
    UGM10-042   West
              Extension  74.3     80.2    5.9      5.9    1.17  89 1.55 12.72
    -------------------------------------------------------------------------
    UGM10-043   West
              Extension  86.8     93.4    6.6      6.3    1.73 290 1.70 17.24
    -------------------------------------------------------------------------
    UGM09-144   West
              Extension  88.0     93.0    5.0      4.2    1.75  91 1.63 19.80
    -------------------------------------------------------------------------
    UGM09-150   West
              Extension  86.0     92.0    6.0      5.0      na  83 1.92 14.43
    -------------------------------------------------------------------------
    UGM09-150   West
              Extension 101.0    135.0   34.0     28.5      na 184 1.57 11.58
    -------------------------------------------------------------------------
    inclusion   West
              Extension 109.0    117.0    8.0      6.7      na 221 2.02 18.71
    -------------------------------------------------------------------------
    UGM10-049  Area 8    14.0     18.0    4.0       NA      na 257 3.01 30.28
    -------------------------------------------------------------------------
                         29.0     35.0    6.0       NA      na 209 2.72 35.22
    -------------------------------------------------------------------------
    UGM10-050  Area 8    20.0     27.0    7.0       NA      na  60 0.89  9.83
    -------------------------------------------------------------------------
                         38.0     48.0   10.0       NA      na 306 3.12 31.16
    -------------------------------------------------------------------------
    UGM10-195  Area 3    24.5     28.8    4.3      3.9      na 136 4.07 22.11
    -------------------------------------------------------------------------
               Area 8    50.3     53.0    2.8      2.3      na 126 0.63 13.95
    -------------------------------------------------------------------------
    UGM10-196  Area 3    26.0     32.0    6.0      5.0      na 160 4.11 22.37
    -------------------------------------------------------------------------
               Area 8    49.5     57.5    8.0      6.7      na  98 1.05 18.19
    -------------------------------------------------------------------------
    UGM10-219  Area 7   156.0    167.9   11.9      7.8    2.85 217 1.94  9.57
    -------------------------------------------------------------------------
    UGM10-222  Abajo    125.0    137.2   12.2       NA      na 209 1.38 12.12
    -------------------------------------------------------------------------

Table 2.

    -------------------------------------------------------------------------
    Drill                                        True
    Hole     Gold     From       To   Interval  Width   Zn   Cu    Ag    Au
    Number   Zones  (metres) (metres) (metres) (metres)  %    %    g/t   g/t
    -------------------------------------------------------------------------
    6546      New
             Target   541.2   546.0     4.9      4.9   6.62  0.38  306   7.14
    -------------------------------------------------------------------------
    7671      New
             Target   491.0   505.0    14.0     14.0   2.58  0.55  185   6.94
    -------------------------------------------------------------------------
    7671      New
             Target   510.0   514.0     4.0      4.0   1.77  0.42  201   4.32
    -------------------------------------------------------------------------
    7671      New
             Target   570.0   578.0     8.0      8.0   1.73  0.58  373  10.21
    -------------------------------------------------------------------------
    UGM10-219 New
             Target   149.6   156.0     6.4      4.2   3.52  0.58  967  13.24
    -------------------------------------------------------------------------
    UGM10-073  Au
             Zone 1    44.0    51.0     7.0      5.4   8.06  0.30  822  11.28
    -------------------------------------------------------------------------
    UGM10-075  Au
             Zone 1    49.8    53.1     3.3      2.9   3.64  0.54  435   8.25
    -------------------------------------------------------------------------
    UGM10-076  Au
             Zone 1    38.0    44.3     6.3      4.3   0.24  0.61  568   6.88
    -------------------------------------------------------------------------
    UGM10-077  Au
             Zone 1    43.0    49.0     6.0      4.7   1.85  0.47  411   8.18
    -------------------------------------------------------------------------

SOURCE Farallon Mining Ltd.