Farallon Announces Fourth Quarter 2009 Operating Results

Mill Throughput Exceeds Design Capacity of 1,500 tpd

VANCOUVER, Jan. 21 /CNW/ - Dick Whittington, President and CEO of Farallon Mining Ltd. ("Farallon" or the "Company") (TSX:FAN) is pleased to announce unaudited fourth quarter ("Q4") and year-end production results.

Record production of 23.4 million pounds of zinc in zinc concentrate and 2.4 million pounds of copper in copper concentrate was achieved in Q4 plus additional by-product silver and gold. The total cash costs(1) including transportation, treatment and refining charges and by-product credits have not been finalized but are estimated to be $0.44/lb of payable zinc. The record production was achieved as a result of increasing average mill throughput to 1,550 tpd in Q4, exceeding the mill design of 1,500 tpd.

The mill expansion project at G-9, designed to increase throughput to 2,000 tpd, remains on track for completion in July 2010 and on budget of $5.3 million. Axxent Engineering has ordered all of the key pieces of process equipment and site construction is expected to commence in February. The Company is financing the mill expansion from its current cash balance of $22 million and cash flow generated by operations.

President and CEO Dick Whittington said "The initiatives that were undertaken in the third quarter to improve mill availability paid off and the mill has now been successfully ramped up to full design capacity. With the mill expansion on track to increase production and our exploration program delivering excellent results, we are well positioned to grow our production profile and add mine life in 2010. We are also focused on growing the Company through accretive corporate transactions, with the objective of becoming a mid-tier, multi-mine Company."

Operational highlights for the three months ended December 31, 2009 compared to the three months ended September 30, 2009 ("Q3") are as follows:

    -   Production of 21,584 tonnes of zinc concentrate and 7,157 tonnes of
        copper concentrate containing an estimated 23.4 million pounds of
        zinc, 2.4 million pounds of copper, 382,120 ounces of silver and
        4,224 ounces of gold from the G-9 mine. Zinc and copper production
        were up from 22.1 million pounds and 1.8 million pounds,
        respectively, in Q3.
    -   Processed 142,752 tonnes of ore with a grade of 9.3% zinc, 1.4%
        copper, 182 g/t silver and 3.0 g/t gold. Production was up from
        117,318 tonnes of ore in Q3.
    -   Averaged 1,550 tpd ore processing, up from an average of 1,275 tpd in
    -   Improved metallurgical recovery of zinc to 80%, up from 79% in Q3.
    -   Improved metallurgical recovery of copper to 56%, up from 46% in Q3.
    -   Sold approximately 22,730 dry metric tonnes of zinc concentrate
        averaging 49% zinc, 6,421 dry metric tonnes of copper concentrate
        averaging 16% copper and 225 tonnes of lead concentrate averaging 20%

Production details for the year are given in the following table. Complete fourth quarter operational and audited financial results will be released to the market and filed on SEDAR on or about March 30, 2010. An analyst conference call is planned for March 31, 2010. Details of the call will be available closer to the date.

                         Q4 2009    Q3 2009    Q2 2009    Q1 2009   YTD 2009

    Production (contained
     in concentrate)
    Zinc (000's Pounds)   23,383     22,137     21,319     16,895     83,734
    Copper (000's pounds)  2,443      1,776      1,740      1,180      7,139
    Lead (000's pounds)        0          0        588        328        916
    Silver (ounces)      382,120    301,202    284,352    229,539  1,197,213
    Gold (ounces)          4,224      3,355      4,443      3,309     15,331

    Ore Mined (tonnes)   150,984    125,978    134,970    115,978    527,910
    Ore Processed
     (tonnes)            142,752    117,318    114,644    106,265    480,979
    tonnes per day         1,552      1,275      1,260      1,180      1,318
    Zinc grade (%)           9.3       10.9       11.0        9.2       10.1
    Copper grade (%)         1.4        1.6        1.3        1.1        1.3
    Lead grade (%)           1.1        1.2        1.2        0.9        1.1
    Silver grade (%)         182        205        165        170        181
    Gold grade (%)           3.0        2.2        2.3        1.7        2.3

    Recovery             Q4 2009    Q3 2009    Q2 2009    Q1 2009   YTD 2009
    Zinc (%)                  80         79         77         79         79
    Copper (%)                56         46         55         45         51
    Lead (%)                   0          0         20         16          8
    Silver (%)                47         39         47         40         44
    Gold (%)                  32         34         52         43         40

    Zinc (DMT)            21,584     20,462     18,567     14,829     75,442
    Zinc (%)                49.1       49.1       52.1       51.7       50.3
    Silver (g/t)             295        259        206        252        255
    Gold (g/t)               2.4        1.7        2.0        2.4        2.1
    Copper (DMT)           7,157      4,894      5,603      3,015     20,669
    Copper (%)              15.4       16.5       14.1       17.8       15.7
    Silver (g/t)           765.5        822        572        694        716
    Gold (g/t)              11.0       13.3        8.7       10.4       10.8
    Lead (DMT)                 0          0      1,280        650      1,930
    Lead (%)                                      20.9       22.9       21.6
    Silver (g/t)                                 1,540      2,005      1,697
    Gold (g/t)                                    41.4       56.5       46.5

    Site Costs
     (US$/t milled)       $81.42     $77.29     $76.28     $70.64
    Total Cash Costs
     (US$/payable pound
     zinc)                 $0.44      $0.45      $0.39      $0.44

    (1) See "Non-GAAP Financial Measures" on pg. 15 of the Company's
        September 30, 2009 MD&A for more information.
    (2) These are provisional assays, subject to finalization. DMT means Dry
        Metric Tonnes

Farallon's G-9 zinc, copper, silver, gold and lead mine at the Campo Morado Property in Mexico reached commercial production in April 2009. The Company is targeting annual production of 120 million pounds of zinc and 15 million pounds of copper per year.

    J.R.H. (Dick) Whittington
    President & 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 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. There are no mineral reserves at Campo Morado and there is no assurance that the mineralization at Campo Morado will ever be classified as mineral reserves. 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.

SOURCE Farallon Mining Ltd.

For further information: For further information: on Farallon Mining Ltd., please visit the Company's website at www.farallonmining.com or contact Neil MacRae, Investor Relations Manager, at (604) 638-2160 or within North America at 1-877-688-2050

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