Investors

Results To Be Incorporated Into Mine Development Study

VANCOUVER, B.C. --- Pacific Minerals Inc. (PMZ:TSXV) announced today that the company has resumed its surface drilling program at the 217 Gold Project, Inner Mongolia, China. The drilling is intended to increase the size and grade of the currently delineated, near-surface gold deposit, which already contains more than 2.5 million ounces of gold in inferred resources and another 950,000 ounces in indicated resources. When the current drilling is completed this fall, the new results will be integrated into the company's ongoing preliminary scoping study to help determine the economic viability of developing a large-scale, open-pit gold mining operation at the project.

The first hole of the current program, drilled to a depth of 138 metres in the Southwest Zone, was completed on July 12. The hole successfully intercepted the mineralized zone and assays are pending. A second drill rig arrived in mid-July and will test the southwest extent of the Northeast Zone along strike.

An independent resource estimate for the 217 Project, prepared in March of this year, reported a substantial, near-surface deposit containing measured and indicated resources of approximately 35 million tonnes grading 0.848 grams of gold per tonne (g/t), containing 953,000 ounces, at a 0.6 g/t gold cut-off. The independent estimate also reported an inferred resource of 85 million tonnes grading 0.928 g/t gold --- an additional 2,543,130 ounces of gold, at a 0.6 g/t gold cut-off. The independent estimate was prepared according to the standards in National Instrument 43-101 by Westervelt Engineering Ltd., under the direction of Messrs. R. Westervelt, P. Eng., and M. Gao, P. Geo., independent qualified persons. Details of the resource estimate are in the company's March 19, 2003, news release on www.pacific-minerals.com. Mr. Westervelt also is supervising the current drill program at the 217 Project.

The mineralized zone hosting the 217 gold deposit has been traced along strike by drilling and surface trenches for a distance of 4.8 kilometres. The zone ranges in width from 40 metres to 150 metres and remains open along strike to the south and west, and to depth.

Assuming the results of the current drilling program are successful, Pacific Minerals will complete additional infill drilling to convert some, or all, of the project's inferred resource to measured and indicated resources, and complete additional metallurgy testing for a pre-feasibility study. Indicated resources are that part of a mineral resource for which quantity and grade can be estimated with a level of confidence sufficient to allow the application of technical and economic parameters to support mine planning and evaluation of the economic viability of the deposit. Inferred resources do not have the same degree of verification.

To help ascertain capital and operating costs for a potential mine at the 217 Project, Pacific's management visited a commercial gold mine in southern China that is of a similar scale and grade to the operation being considered at 217. Ivanhoe Mines, Pacific Minerals' partner on the 217 Project, also has conducted extensive due diligence on a large number of contemporary Chinese underground and open-pit mines. Ivanhoe's studies indicate that the fabrication and construction at the Chinese mines are of excellent quality, and the reported capital and operating costs are significantly lower than comparable mines in most western countries, confirming an important advantage for mining projects in this region.

As part of the company's scoping work, SGS Lakefield Research Canada Ltd. is conducting follow-up, confirmatory metallurgical testing on core samples from the 217 Project. Preliminary metallurgical tests performed earlier this year by SGS Lakefield achieved overall gold extraction in excess of 95% from both the oxide and sulphide mineralization using gravity separation and cyanidation.

The 217 Project is in the western part of Inner Mongolia, northern China. The site is approximately 650 kilometres northwest of Beijing and 160 kilometres south of Ivanhoe Mines' major gold and copper project at Turquoise Hill (Oyu Tolgoi), in southern Mongolia. The 217 Project is centrally positioned within the east-west-trending Tien Shan Gold Belt. This prolific structure hosts seven major gold mines with a total combined production of more than 70 million ounces of gold.

New Gold and Copper Prospects

Pacific Minerals is continuing to assess new mineral exploration opportunities in China. The company recently applied for new exploration concessions covering 473 square kilometers in a highly prospective area of Inner Mongolia. Initial results from surface rock-chip samples taken from various locations within the exploration permit area and assayed in China have returned grades of up to 5% copper, 3.6 g/t gold and 84 g/t silver. Pacific Minerals' geologists also believe that the exploration concessions represent a prospective exploration target for deposits of platinum group metals (PGMs). Rock-chip samples from several outcrops have been sent to Vancouver, Canada, to be assayed for PGMs.

Elsewhere in China, Pacific Minerals is actively exploring at the JBS Platinum/ Palladium Project in Yunnan Province and has started a regional exploration program over an exploration block covering prospective, large-scale gold, platinum, palladium, nickel and copper projects within the same geologic belt as the JBS Project. Initial results are expected later this summer.

The company is finalizing contract issues on other exploration projects in China and plans to commence an exploration-drilling program of approximately 5,000 metres to test a number of prospective targets within the new exploration regions.

Pacific Minerals is a Canadian company focused on the exploration and development of precious and base metals (platinum, palladium, gold, nickel, and copper) in the People's Republic of China. Ivanhoe Mines (TSX: IVN) owns approximately 36.3% of the issued and outstanding shares of the company, and 41.4 % on a fully diluted basis. Ivanhoe also has the right to acquire a majority interest in the 217 and JBS projects by completing production feasibility studies and arranging financing to take the properties into production. Ivanhoe also holds a right of first refusal to acquire a majority interest in any new project in China (excluding Anhui Province) undertaken by Pacific during the next nine years.

Information contacts: Investors: Bill Trenaman/ Media: Bob Williamson: +1.604.688.5755
Email: [email protected] Website: www.pacific-minerals.com

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