Exco Resources Limited (ASX:EXS) White Dam Reserve Upgrade And Finance Update

Perth, Oct 6, 2009 AEST (ABN Newswire) - Exco Resources Limited (ASX:EXS)(PINK:EXRSF) White Dam Gold Project is located in South Australia; approximately 80kms west of Broken Hill. The project is a joint venture between Exco and Polymetals Group Pty Ltd (Polymetals). Polymetals have acquired a 25% interest and will manage the implementation and operation of the project.

Having recently finalised financing arrangements with Barclays Capital, the project has now moved into the construction phase, with long lead items being purchased and initial earthworks underway.

WHITE DAM RESOURCE UPDATE

The White Dam Resource has been re-estimated based on infill drilling and detailed grade control drilling within the stage one pit. As a result the upper portion of the resource (above 130RL or ~70m below surface) has been re-estimated. The resource below 130RL has remained unchanged as there has been no additional data collected at depth.

The resource has been estimated within 11 geologically and geochemically defined domains using the ordinary krigging (OK) interpolation methodology, using Micromine modelling software.

With the additional infill drilling, all of the oxide material resource has been reclassified as Indicated. As a result of the infill and grade control drilling, the edges of the mineralisation have been better defined resulting in a modest drop in global resource tonnes. This has however been partly offset by slightly higher average grades (up by 2.4% to 1.05g/t Au), resulting in a global decrease in contained ounces of only 6.0% from 251,000 to 238,000 ounces.

WHITE DAM RESERVE UPGRADE

On completion of the updated resource, a series of pit optimisations were completed by Dallas Cox of Crystal Sun Consulting for various gold price and input assumptions. The general assumptions used in the optimisations have remained unchanged from the previous pit optimisations (as released on 29th of April 2009).

Based on the A$900 pit optimisation, the ultimate pit design was completed resulting in an updated Probable Reserve for White Dam of:

4.94Mt @ 1.07 g/t Au for 170,400 contained Ounces (0.4 g/t cut-off)

This represents an increase of 21,400 ounces (up 14.4%) compared to the previous Probable Reserve.

This is mainly as a result of the previously Inferred resources to the east being converted to Indicated through infill drilling.

The overall strip ratio for the revised pit is unchanged at approximately 1:1.

The overall philosophy also remains unchanged, with the western portion of the pit, that contains coherent high grades (in the grade control data - yet to be modelled) to be mined first, with the lower grade portions to the east being mined later in the schedule.

FINANCING UPDATE

As announced on 11 September, 2009, Exco and Polymetals completed the arrangements for a debt financing facility of A$16M for the construction and commissioning of the White Dam Gold Project Joint Venture in South Australia with Barclays Capital (Barclays).

The Barclays facility was structured to be available in two tranches, A$13 million immediately and a further A$3 million subject to a review of the Resource base and an upgrade in the Reserve.

Having successfully completed the Reserve upgrade, the second tranche is now available.

WHITE DAM FORWARD PROGRAMME

- Mobilisation of the earth works contractor
- Pad and pond construction
- Construction of the plant
- Mobilisation of the mining fleet
- Placing of first ore under leach
- Targeting gold production in Q1 2010

Contact

Michael Anderson Managing Director Phone +61-8-9211-2000