Exco Resources Limited : Vertigo Project to be Developed

Exco Resources Limited (ASX:EXS, "Exco") and its joint venture partner Polymetals Mining Limited (ASX:PLY, "Polymetals") have agreed to proceed with the development of the Vertigo gold project in the Drew Hill area of South Australia under revised joint venture conditions.

The Drew Hill projects are located in South Australia approximately 80km west of Broken Hill.

Exco is currently a 75% partner in both the White Dam Gold Production Joint Venture and the Drew Hill Exploration Joint Venture with Polymetals owning 25% and operating both joint ventures

Under arrangements negotiated for proceeding with the Vertigo project,

• production from the currently producing Hannaford Pit will continue to be split 25:75;

• Polymetals will increase its interest in the exploration joint ventures to 50% in return for a commitment by Polymetals to spend $1.3m on exploration on the Drew Hill tenements prior to 30 June 2012;

• production from Vertigo and any other deposits developed will be split 50:50; and,

• Polymetals will increase its interest in White Dam infrastructure, including plant and camp facilities, from 25 per cent to 50 per cent for a cash consideration based on an agreed independent valuation and a commitment to take on an extra 25% of the future closure costs.

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