14 January 2011 Market Release (via electronic lodgement) WHITE DAM GOLD PROJECT - VERTIGO RESOURCE UPGRADE
* A resource update for the Vertigo Deposit has been completed resulting in a 50% conversion from Inferred to Indicated Resource for a total of: 2.45Mt @ 1.04 g/t Au for 82,100 Oz contained (@ 0.4 g/t cut-off) * The Indicated portion of the resource now stands at 1.22Mt @ 1.18g/t Au for 46,200 Oz contained. * The conversion of "near mine" Inferred resources to the Indicated category is in line with the strategy to extend the mine life at White Dam. * Production levels at White Dam remain above expectations with ~40,000oz produced to date in this financial year. * Operating cash costs remain < A$600/oz leading to very healthy margins at prevailing gold prices. * Exco has achieved an average sale price for the project to date of A$1,373/oz. The White Dam Gold Project is located in South Australia; approximately 80kms west of Broken Hill (see Figure 1).

The Vertigo Deposit is located 1.5km from the existing mining site at White Dam. VERTIGO RESOURCE UPDATE The Vertigo resource has been re-estimated based on infill and extensional drilling completed since the previous 2007 resource.

The updated resource has increased on the original estimate and improved the confidence rating of the estimate. The resource cut-off has been reduced from 0.7g/t to 0.4g/t supported by an increase in gold price and further understanding of the potential to mine the deposit.

The updated resource is presented in Table 1 below. The geological and resource model for the Vertigo Deposit is based on detailed drilling on a combination of 25m by 25m and 25m by 50m grid spacings.

A total of 111 drill holes (including both Diamond and Reverse Circulation (RC) holes were utilised to define the resource. The resource model comprises two sub-horizontal to gently dipping, tabular zones of mineralisation.

The lower of the two zones is thicker and better grade. Statistical analyses on the accumulated composites were completed and outliers reduced where appropriate.

Variography and search neighbourhood analysis was also conducted as input into the grade estimation.

The grade estimation method used was Block Ordinary Kriging. Estimates of dry in-situ bulk density are derived from over one hundred core samples distributed through the deposit.

Although the average dry in-situ bulk density used for the resource estimate is 2.54t/m3, a range of densities have been applied to the model based on analysis by depth and position within the oxidation profile. Resource classification was developed from the confidence levels of key criteria including drilling method, geological understanding and interpretation, grade analysis, data density and location, grade estimation and quality.

Resources classified as Indicated fall within the zone of 25m by 25m drill spacing. STATUS OF VERTIGO APPROVALS * A Mining Lease application for the Vertigo deposit has been submitted to Primary Industry and Resources South Australia (PIRSA) for approval. * The approvals process is expected to be completed through the second quarter of 2011. RESERVE DEFINITION & MINE PLANNING FOR VERTIGO * Metallurgical column testwork is ongoing and will be completed early in the second quarter 2011. * The reserve definition and detailed pit designs will be undertaken on completion of the metallurgical testwork. * Final mine scheduling and planning is targeted for the second quarter of 2011 in line with the mining lease approval. PRODUCTION UPDATE Under the management of Excos joint venture (JV) partner Polymetals Group Pty Ltd (Polymetals), the first six months of production in financial year 2010/11 have yielded 40,365 ounces of gold (see Table 2). Excos 75% share of this production is 30,274 ounces.

Current production levels equate to an annualised rate of ~80,000 ounces.
Mining rates and operating costs remain in line with expectations. Operating costs remain well below A$600/oz and with prevailing gold prices remaining ≥A$1,350/oz, the JV partners are currently enjoying very healthy margins. Through a mixture of spot and forward sales, Exco has achieved an average sale price of A$1,373/oz.
To read full announcement please click here: http://www.stocknessmonster.com/news-item?S=EXS&E=ASX&N=524481
For further information contact: Michael Anderson Exco Resources Ltd Managing Director Phone +61 (0)8 9211 2000 Media Enquiries James Harris Professional Public Relations Phone +61 (0)8 9388 0944 Email:
FORWARD LOOKING STATEMENTS & COMPETENT PERSONS STATEMENT This report contains forward looking statements that are subject to risk factors associated with resources businesses.

It is believed that the expectations reflected in these statements are reasonable but they may be affected by a variety of variables and changes in underlying assumptions which could cause actual results or trends to differ materially, including but not limited to: price fluctuations, actual demand, currency fluctuations, drilling and production results, reserve estimates, loss of market, industry competition, environmental risks, physical risks, legislative, fiscal and regulatory developments, economic and financial market conditions in various countries and regions, political risks, project delay or advancement, approvals and cost estimates. All references to dollars, cents or $ in this presentation are to AUD$ currency, unless otherwise stated. Information in this report relating to the Vertigo Mineral Resource is based on data compiled by Mr Lauritz Barnes, who is a consultant to Exco Resources Limited.

Mr Barnes is a member of the Australasian Institute of Mining and Metallurgy and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person under the 2004 Edition of the Australasian Code for reporting of Exploration Results, Mineral Resources and Ore Reserves.

Mr Barnes consents to the inclusion of the data in the form and context in which it appears. Information in this report relating to the Cloncurry Copper Project Mineral Resource is based on data compiled by Excos Exploration Manager Stephen Konecny who is a member of The Australasian Institute of Mining and Metallurgy.

Mr Konecny has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as Competent Persons under the 2004 Edition of the Australasian Code for reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Konecny consents to the inclusion of the data in the form and context in which it appears.
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