Farallon Provides G-9 Project Update



    
    Mine and Mill operational
    3,000 tonnes of saleable concentrate objective achieved
    

    VANCOUVER, Oct. 8 /CNW/ - Dick Whittington, President and CEO of Farallon
Resources Ltd. ("Farallon" or the "Company") (TSX: FAN; OTCBB: FRLLF) is
pleased to provide the following update of activities at the Company's G-9
polymetallic development project at the Campo Morado (zinc, copper, lead
silver, gold) property in Guerrero State, Mexico. The mine and mill are now
operational and the corporate objective of having 3,000 tonnes of saleable
concentrate produced by October 1 has been met. In addition, there have been
several significant developments since the Company's last release on August
21, 2008.

    Project Development and Project Capital Costs

    Underground mining has been underway throughout September with a total of
approximately 33,000 tonnes being mined to date. The current focus of mining
is the West Extension zone and the higher grade areas of the North zone.
Access development and stope development are on going concurrently with
production. There are four active stopes/faces in mineralization in the North
and West Extension zones: three faces on the 938 level in the North zone and
one face at the 957 level in the West Extension zone. Approximately 33,000
tonnes of mineralized material assaying between 6% and 12% zinc (as estimated
from the block model and selected grab samples) have been delivered to the
plant. Mining for the next few months will continue to concentrate in the
North and West Extension zones until the Southeast ramp reaches the high grade
of the Southeast zone. The Southeast ramp is still expected to reach the
Southeast zone by December 15, after which stope development and production in
that zone will begin.
    The Mill is now mechanically and electrically complete. Commissioning has
been underway throughout September in conjunction with a major operational
effort to achieve 3,000 tonnes of saleable concentrate production by
October 1. This has been achieved and mill performance, while still officially
in the "commissioning" stage is improving day to day as our operational staff
start the process of improving and optimizing mill throughput performance.
Highlights to date include operating the mill at an average throughput rate of
1,535 tonnes per day for nine consecutive days and producing zinc concentrate
at an average grade of 50.4% Zn. The mill has also met its target of producing
separate zinc, copper and lead concentrates by October 1 (see News Release
dated August 21, 2008) and is now on-stream to commence the ramp-up in
production previously announced. Selective shutdowns will occur over the next
60 days as final commissioning and debugging of the mill occur. The water
retention dam, tailings storage facility and water diversion ditch are fully
operational.
    Heavy seasonal rains, while inconvenient, have not caused any material
delays in the completion of construction or the commencement of production
activities at the mine or the mill. The rainy season usually lasts into
November, so this will be an on-going area of focus in the short term, to
ensure the continued operation of the mine and mill.
    In the other non-essential construction areas such as the mine
administration building, the truck shop and the mine dry, construction is
projected to carry over until the end of October or early November and is not
expected to interfere with the production of concentrates in the meantime.
Trucking of concentrates to the port of Manzanillo is expected to commence
shortly and off-take shipments, as previously announced, are expected to start
in the later part of October, with full production targeted for early 2009.
    No changes have been made to the previously announced project capital
cost to completion of $139 million, 12% above the estimate in the December
2007 Preliminary Assessment, although some increase is expected due to the
delay in completing the administration building, truck shop and mine dry.
Project cost reconciliation activities are underway to account for all costs
attributable to the construction of the mine and mill and to ensure the
appropriate separation between project costs and operational and corporate
costs. Contractor contracts are being managed to closure with increased
scrutiny of all outstanding cost items. Areas of risk continue to be in the
amount of work outstanding versus billed and the accuracy of contractor
estimates to complete certain contracts. All key equipment is now on site,
consequently no significant increases in equipment costs are expected.
Construction activities will continue through to November but the work and
number of contractors involved will rapidly diminish to that time.

    Mining Planning

    As previously announced (News Release dated August 21, 2008) JDS Energy &
Mining Inc. ("JDS") completed an initial review of the Company's mine planning
options and prepared a 17 month plan that mines approximately 700,000 tonnes
of mineralized material at estimated average grades of 13% zinc, 1.5% copper,
1.2% lead, 150 grams per tonne of silver and 2.2 grams per tonne of gold. The
plan includes initial monthly production rates of 20,000 tonnes per month,
increasing to 45,000 tonnes per month by January 2009, which is equivalent to
the planned production rate of 1,500 tonnes per day. A second revision to the
plan is well underway with several areas of optimization being evaluated. The
new plan will consist of a combination of lower cost mining methods (primarily
open stoping) and the mining of high grade areas of the G-9 deposit. The mine
plan is being designed specifically to maximize cash flow over an 18 month
period, commencing November 1, 2008. Given the recent uncertainty over metal
prices, the Company is putting the most economically robust plan together for
the next 18 months.
    At the same time, as previously announced (News Release dated August 21,
2008), Farallon has retained JDS to assess the Company's options to expand
production to the 2,000 - 2,200 tonnes per day rate by July 1, 2009. Given the
initial success of operating the mill at 1,500 tonnes per day and the use of
higher productivity mining methods underground, the Company will be focusing
on evaluating this objective sooner than the current July 1, 2009 target date.
The results of this year's exploration program are being incorporated into the
Company's longer term mine plans going forward and, should the potential to
increase production be possible, our enhanced resource base will provide the
platform to do so.

    Other Corporate Activities

    Rick Irvine has recently been appointed the new General Manager of the
G-9 mine. Rick is a mining engineer with over 18 years of industry experience
in Canada, Bolivia, Argentina, Chile, Honduras and Nicaragua. Rick was most
recently VP & General Manager for Coeur d'Alene Mines during the construction
and start-up of their San Bartolomé Mine in Bolivia. He was also previously
Operations Manager at Pan American Silver's Manantial Espejo Mine in Argentina
during its construction. Rick holds a Bachelor degree in Geology from the
University of New Brunswick and a Bachelor degree in Mine Engineering from
Queen's University.
    As a result, Jorge Villasenor will resume his full time responsibilities
as General Manager, Mexico and Dan Kilby will resume his full time
responsibilities as General Manger of Exploration. Exploration activities
continue to be focused underground and will remain so for the foreseeable
future. Two underground drills are now on site and in operation. The immediate
focus is to delineate and enhance the resource base of the Company from
underground drill sites on closely spaced drill patterns, to both upgrade the
resource category and to provide sufficient definition for mine planning going
forward. It is the Company's intention to target 18 months of measured
resources in advance of mining at all times. For the time being, surface
exploration has been suspended but is currently expected to resume in late
November or early December.
    Dick Whittington said: "The Company is on the threshold of making the
transition from an exploration company to an operating company. We have built
a 100% owned Greenfield mine and have done it ourselves. Numerous outside
consultants and engineers have assisted us in this journey and it has been an
exciting two years since we first started to build the mine in earnest. These
are tumultuous times and we are bringing the mine into production at a very
opportune time as cash and cash flow are the new market barometers. Farallon
still has a lot of work to do before we make the transition but it is imminent
and with that, and our excellent exploration potential, we have the
opportunity to create significant shareholder value - outside influences
notwithstanding. I am particularly pleased with the appointment of Rick Irvine
to the senior management team and now believe we have the team to take us to
the next level. We have a first class asset underground and have built a first
class asset above ground. We now intend to maximize the value of these assets
to provide the springboard to further growth for the Company."
    Mike Makarenko, P.Eng., of JDS Energy & Mining Inc., a qualified person
who produced the 17 month mine plan and Peter Smith, P.Eng., of Axxent
Engineering, a qualified person who is responsible for monitoring the capital
expenditures on the G-9 Project, have reviewed and approved the contents of
this news release. Daniel Kilby, P.Eng., Farallon's General Manager and
in-house qualified person, has reviewed and approved the information on
drilling and underground programs in this news release.
    Note: No mineral reserves have yet been defined for the G-9 deposit.
Readers are referred to the Company's March 17, 2008 News Release for details
of the measured, indicated and inferred mineral resources applicable to G-9.

    
    ON BEHALF OF THE BOARD OF DIRECTORS

    J.R.H. (Dick) Whittington
    President and CEO

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

                         Forward Looking Information
    

    This 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
potential, continuity of mineralization, exploration drilling, exploitation
activities and events or developments that the Company expects 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. The likelihood of future mining at
Campo Morado is subject to a large number of risks and may require achievement
of a number of technical, economic and legal objectives, including obtaining
lower than expected grades and quantities of mineralization and resources,
recovery rates and mining rates, changes in and the effect of government
policies with respect to mineral exploration and exploitation, the possibility
of adverse developments in the financial markets generally, delays in
exploration, development and construction projects, fluctuations in the prices
of zinc, gold, silver, copper, lead and other commodities, obtaining
additional mining and construction permits, completion of pre-feasibility and
final feasibility studies, preparation of all necessary engineering for
underground and processing facilities as well as receipt of additional
financing to fund mine construction. Such funding may not be available to the
Company on acceptable terms or on any terms at all. There is no known ore at
Campo Morado and there is no assurance that the mineralization at Campo Morado
will ever be classified as ore. 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 and the Company's annual report on
Form 20-F at www.sec.gov.





For further information:

For further information: on Farallon Resources Ltd., 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

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Farallon Mining Ltd.

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