Atacama Pacific Announces Positive Preliminary Economic Assessment for the Cerro Maricunga Oxide Gold Project, Chile

Atacama Pacific Gold Corporation (TSX VENTURE:ATM) ("Atacama Pacific") is
pleased to announce the results from a Preliminary Economic Assessment ("PEA")
for its 100% owned Cerro Maricunga oxide gold project located in Chile's
Maricunga Mineral Belt. The PEA was prepared by NCL Ingenieria y Construccion SA
("NCL"), Santiago, Chile, in accordance with Canadian National Instrument 43-101
"Standards of Disclosure for Minerals Projects" ("NI 43-101").


Preliminary Economic Assessment Highlights (All amounts in US dollars)



--  Potential for average annual gold production, over the first five years,
    of 298,000 ounces 
    
--  Projected total gold production of 2.7 million ounces over a 10-year
    mine life 
    
--  Life of mine estimated operating cash costs of $652 per ounce gold ("/oz
    Au") 
    
--  Preliminary capital cost estimate of $514.6 million with sustaining
    capital of $249.0 million
    

                                                                            
The PEA demonstrates the potential economic viability of the Cerro Maricunga
project as noted in Table 1.                                                
                                                                            
Table 1 - Economic Summary                                                  
----------------------------------------------------------------------------
                               Before Tax Case          After Tax Case      
                          --------------------------------------------------
                                 Base         Spot        Base         Spot 
                           ($1,450/oz   ($1,700/oz  ($1,450/oz   ($1,700/oz 
                                  Au)          Au)         Au)          Au) 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
IRR (%)                          33.9%        51.2%       26.6%        40.5%
----------------------------------------------------------------------------
NPV 5% Discount (US$ M)     $     741   $    1,247   $     531   $      923 
----------------------------------------------------------------------------
Average Annual Cash Flow                                                    
 (US$ M)                    $     189   $      256   $     161   $      213 
----------------------------------------------------------------------------
Payback Period (years)            2.5          1.7         3.1          2.2 
----------------------------------------------------------------------------
Note - Assumes 100% equity financing                                        



"We are very pleased with the robust results from the PEA for our Cerro
Maricunga oxide gold deposit," said Carl Hansen, President and CEO of Atacama
Pacific. "With a processing rate of over 80,000 tonnes per day and the potential
for average annual production of 298,000 ounces of gold over the first 5 years,
Cerro Maricunga is globally one of the largest oxide gold projects under
consideration for development. The high processing rate and positive
metallurgical characteristics combined with a low 1.6 to 1 strip ratio, cost
effective open pit mining and heap leach processing methods establish the
potential for an economically strong project with quick payback on capital
expenditures for a project of this scale. With the PEA completed, we will move
forward towards a feasibility study and will examine the opportunities to
potentially improve the results of the PEA by increasing the overall resource
through additional drilling and leaching coarser crushed material in a
valley-fill heap leach scenario."


The PEA is preliminary in nature and includes Inferred Mineral Resources that
are considered too speculative geologically to have the economic considerations
applied to them that would enable them to be categorized as Mineral Reserves.
There is no certainty that the PEA results will be realized. The PEA is not a
preliminary feasibility study or feasibility study. The PEA has been completed
to a level of accuracy of +35% to -10%.


Economic Analysis

The PEA calculates a base case pre-tax net present value at a 5% discount rate
("NPV5%") of $741 million, a pre-tax internal rate return ("IRR") of 33.9% and
an average pre-tax cash flow from operations of $189 million per year. Table 1
summarizes the key economic results of the PEA. The base case was calculated at
a gold price of $1,450. The three-year historical gold price, as of January 1,
2013, was approximately $1,490/oz Au.


The following operational parameters and costs were used in the PEA:



    Processing Rate (tonne per day)             80,000
    Gold Recoveries                              79.5%
    Mining Costs ($/tonne mined)                 $1.43
    Processing Costs ($/tonne)                   $2.56
    G&A Costs ($/tonne processed)                $0.53



Mining and Processing

Projected total gold production over a potential 10-year mine life is 2.7
million ounces at an average operating cash cost of $652/oz Au. The gold is
produced from heap leaching 261 million resource tonnes with an average grade of
0.40 grams per tonne gold ("g/t Au"). An average life of mine strip ratio of 1.6
to 1 (waste to resource) was calculated. Table 2 summarizes a potential mining
schedule base on this mine life.


Conventional open pit mining methods have been considered in mining the Cerro
Maricunga deposit. The PEA considers utilizing a fleet of 16 haul trucks
(Komatsu 9300E - 290 tonne), five diesel shovels (Komatsu PC5500 - 38 yard),
five production drills (Sandvik DR460 - 10 5/8 inch) and various ancillary
equipment. No additional production fleet equipment is considered during the
mine life. The preliminary open pit design incorporates 10 metre ("m") high
benches with 40 metre wide main haul roads at a maximum grade of 10% and pit
walls at an average 42 degree angle.


The PEA envisions that oxide mineralization will be trucked to a primary
gyratory crusher facility, with a minimum capacity of 4,200 tonne per hour,
located to the immediate west of the Lynx Zone where it will be crushed to 165
mm. The primary crushed material will then be conveyed approximately 3.4
kilometres ("km") to feed three secondary cone crushers and three tertiary cone
crushers. The final crushed product, measuring (P80) 19 mm, will be conveyed 2.8
km to the heap leach pads.




Table 2 - Conceptual Mining and Processing Schedule                         
----------------------------------------------------------------------------
               Resource         Waste                     Grade   Production
Year      ('000 tonnes) ('000 tonnes)  Strip Ratio   (g/t gold)      (oz Au)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
-1                6,624         4,776          0.7         0.38            -
----------------------------------------------------------------------------
1                22,576        27,874          1.2         0.44      318,500
----------------------------------------------------------------------------
2                29,200        55,350          1.9         0.41      309,100
----------------------------------------------------------------------------
3                29,200        55,350          1.9         0.41      305,200
----------------------------------------------------------------------------
4                29,200        55,350          1.9         0.40      296,600
----------------------------------------------------------------------------
5                29,200        55,350          1.9         0.35      260,900
----------------------------------------------------------------------------
6                29,200        55,273          1.9         0.36      268,700
----------------------------------------------------------------------------
7                29,200        49,929          1.7         0.38      282,600
----------------------------------------------------------------------------
8                26,759        41,040          1.5         0.40      269,700
----------------------------------------------------------------------------
9                20,685        18,615          0.9         0.47      247,400
----------------------------------------------------------------------------
10                8,537         3,132          0.4         0.58      129,000
----------------------------------------------------------------------------
11                  742           118          0.2         0.66       12,800
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Totals          261,123       422,157          1.6         0.40    2,700,500
----------------------------------------------------------------------------



Crushed material would be stacked on the heap leach pad by a radial stacker in
50 by 50 metre modules in layers 10 m thick. Every five layers, a geomembrane
will be placed on the heap to separate subsequent layers from the underlying
material. The final leach pad height will be approximately 100 m. A pad
irrigation rate of 10 liters/hour/metre2 has been considered. Sodium cyanide and
lime consumption are expected to be 0.24 kilograms per tonne ("kg/t") and 1.4
kg/t respectively. The pregnant leaching solution containing gold would then be
pumped to a conventional carbon adsorption facility (ADR plant) where gold from
process solutions would be recovered to a final gold dore product.


Average gold recoveries of 79.5% have been used in the PEA based on bottle roll
and column metallurgical testing. To date, over 75 bottle roll tests and 20
column tests have been completed on material from the Cerro Maricunga deposit.
The majority of the column tests have been completed on mineralization crushed
to 19 millimetres ("mm"), however, 78% gold recoveries were also achieved on
material crushed to 50 mm and 77% recoveries were achieved on 100 mm crushed
material. In order to evaluate gold recoveries at various crush sizes, further
metallurgical test work is continuing.


Capital Requirements

The PEA initially estimates capital expenditures for the potential development
of an open pit mining and conventional heap leach processing operation at the
Cerro Maricunga project at $514.6 million, which includes contingencies of $41.3
million and Engineering, Procurement, and Construction Management ("ECPM") costs
of $28.9 million. A breakdown of these costs is provided in Table 3. Additional
capital requirement during the life of the mine, including annual heap leach pad
expansions and closure costs total $249.0 million, which includes a 5%
contingency. The capital costs presented are based on quotes received from
equipment manufactures or contractors. The PEA assumes, on the basis of quotes
received, that the mining fleet will be acquired through a manufacturer lease
arrangement payable over the life of the mine at a total cost of $214.1 million.




Table 3 - Preliminary Summary of Capital Expenditures                       
---------------------------------------------------------------------------
                       Item                                  US$ (millions)
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Open Pit                                                                   
---------------------------------------------------------------------------
                                         Pre-strip                     17.1
---------------------------------------------------------------------------
                           1st Fleet Lease Payment                     14.7
---------------------------------------------------------------------------
                 Mining Support (incl. truck shop)                     27.6
---------------------------------------------------------------------------
Processing                                                                 
---------------------------------------------------------------------------
                             Crushing & Stockpiles                    108.2
---------------------------------------------------------------------------
                                        Leach Pads                     93.2
---------------------------------------------------------------------------
                                 ADR & EW/Smelting                     29.5
---------------------------------------------------------------------------
                                          Indirect                     55.6
---------------------------------------------------------------------------
Infrastructure                                                             
---------------------------------------------------------------------------
                                             Water                     84.8
---------------------------------------------------------------------------
                           Warehouse, Office, etc.                      7.7
---------------------------------------------------------------------------
                                             Roads                      3.0
---------------------------------------------------------------------------
                                          Indirect                      3.1
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Capital Costs (without contingencies)                                 444.5
---------------------------------------------------------------------------
Contingencies(ii)                                                      41.3
---------------------------------------------------------------------------
EPCM(ii)                                                               28.9
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Total Capital                                                      514.6(i)
---------------------------------------------------------------------------
(i) The PEA has been completed to a level of accuracy of +35% to -10%.      
(ii) Contingencies are 10% and EPCM are 7% of capital expenditures excluding
Pre-strip and 1st Fleet Lease Payment.                                      



Taxes

The federal Chilean tax rate used in the PEA is 20%. In addition, included in
the economic analysis is the variable Chilean tax on mining activities levied on
operational income.


Resource Estimate

On September 25, 2012, Atacama Pacific published a global unconstrained resource
estimate summarized in Table 4. The pit constrained resource estimate used in
the preliminary open pit mine model, Table 5, includes approximately 75% of the
Measured and Indicated and 33% Inferred resources from the global unconstrained
resource estimate.


The pit constrained resource estimate includes those resources which lie within
the boundary of a conceptual open pit designed at an average gold price of
$1,400 using the mining and processing parameters and associated costs outlined
in the PEA. The cut off grade used in the estimation of the pit constrained
resource is variable at 0.18 g/t Au up to the third year and at 0.15 g/t Au from
year 4 to the end of the proposed mine life.




Table 4 - Cerro Maricunga Oxide Gold Project Global Unconstrained Resource  
Estimate                                                                    
-----------------------------------------------------------
                           Measured               Indicated
-----------------------------------------------------------
Cut-off          Tonnes       Grade      Tonnes       Grade
                                                           
(g/t Au)     (millions)    (g/t Au)  (millions)    (g/t Au)
-----------------------------------------------------------
-----------------------------------------------------------
0.2                60.4        0.44       187.5        0.41
-----------------------------------------------------------
0.3                40.7        0.53       123.1        0.50
-----------------------------------------------------------
0.4                24.5        0.64        71.2        0.61
-----------------------------------------------------------
0.5                15.1        0.77        42.8        0.72
-----------------------------------------------------------

----------------------------------------------------------------------------
                     Measured and Indicated              Inferred           
----------------------------------------------------------------------------
Cut-off        Tonnes      Grade       Gold     Tonnes      Grade       Gold
                                     Ounces                           Ounces
(g/t Au)   (millions)   (g/t Au)    (000's) (millions)   (g/t Au)    (000's)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
0.2             247.9       0.42      3,344      226.3       0.36      2,654
----------------------------------------------------------------------------
0.3             163.9       0.51      2,667      120.7       0.47      1,810
----------------------------------------------------------------------------
0.4              95.8       0.62      1,912       57.8       0.60      1,118
----------------------------------------------------------------------------
0.5              57.9       0.74      1,370       32.3       0.73        754
----------------------------------------------------------------------------
                                                                            
                                                                            
Table 5 - Cerro Maricunga Oxide Gold Project Pit Constrained Resource       
Estimate                                                                    
-------------------------------------------------------------------------
Constrained at $1,400/oz Au           Tonnes         Grade    Gold Ounces
                              -------------------------------------------
                                  (millions)      (g/t Au)        (000's)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Measured                                48.6          0.43            668
-------------------------------------------------------------------------
Indicated                              137.1          0.41          1,791
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Measured and Indicated                 185.8          0.41          2,460
-------------------------------------------------------------------------
Inferred                                75.4          0.39            938
-------------------------------------------------------------------------



The PEA includes Inferred Mineral Resources that are considered too speculative
geologically to have the economic considerations applied to them that would
enable them to be categorized as Mineral Reserves. There is no certainty that
the PEA results will be realized. The PEA is preliminary in nature and is not a
preliminary feasibility study or feasibility study. The mining study for the PEA
was developed by NCL. The parameters of the mining study were used to develop
the constrained resource.


Water

The PEA considers that water will be transported by pipeline from Atacama
Pacific's water exploration concessions, under option from AMX de Chile S.A.,
located approximately 100 km north to the Cerro Maricunga project. Atacama
Pacific has received a quote of $85 million for the construction of the
pipeline. Power for the pumping stations will be supplied by leased generators.


Water requirements of 100 litres per second are projected. Atacama Pacific is
presently completing water exploration drilling and has encountered significant
water flows in the first two holes drilled on the exploration concessions. The
acquisition of other water sources is also being considered.


Permitting

Chile has an established and clearly defined and regulated permitting process
for development projects. In order to develop a mining and processing operation
at the Cerro Maricunga project, an Environmental Impact Assessment ("EIA") must
be obtained from the Chilean environmental authority, Servicio de Evaluation
Ambiental ("SEA"). The EIA process takes 6 to 18 months to complete and takes
into consideration all aspects of a proposed development. Once permits of this
nature are granted, Atacama Pacific would have a five year period to start
construction of the project.


Atacama Pacific has been gathering baseline environmental information for more
than two years and has contracted Arcadis Chile S.A. to prepare baseline study
documentation. Further works, including basic engineering, geotechnical
drilling, approval of water extraction rights, are necessary before an EAI
application can be submitted for approval.


Project Opportunities and Risks

Atacama Pacific has identified a number of opportunities that may positively
impact the economics of the Cerro Maricunga project which will be evaluated.
These opportunities include but may be not be limited to the following:




--  Expansion of the current resource and reduction of the strip ratio
    through positive results from the current drilling program; 
    
--  Examining the impact of increasing the crush size from 19 mm to coarser
    crush sizes including run of mine; 
    
--  Evaluating contracting crushing and conveying operations, 
    
--  Sale and leaseback of water supply; and 
    
--  Adoption of valley fill heap leach processing within a valley adjacent
    to the deposit. 



Aside from the risks typical of all large scale mining projects, such as, but
not limited to, confidence in mineral resource estimates, metallurgical
performance, capital and operating cost increases, commodity price decreases,
securing reasonably priced project financing, etc., principal project risks
specific to Cerro Maricunga include the following:




--  Identification or acquisition of sufficient water resources for the
    project; 
    
--  Ability to acquire water rights and mining and other permits while
    maintaining a reasonable development timeline; and 
    
--  The ability to attract and retain experienced professionals given the
    competitive state of the global mining industry. 



Project Developments

Atacama Pacific is currently undertaking a 20,000 m infill drilling program with
the goal of converting existing inferred category resource to the measured and
indicated category as well as targeting areas within the projected $1,400/oz Au
pit shell which have not been drilled to date and are considered un-mineralized
in the PEA.


Upon completion of the currently drilling program, Atacama Pacific will prepare
an updated pit confined resource estimate that should be available early in the
third quarter of 2013. The updated resource estimate will form the basis for a
feasibility study intended to commence shortly thereafter.


PEA Study Basis and Assumptions

This study constitutes a PEA for NI 43-101 purposes and is preliminary in
nature. It includes Inferred Mineral Resources that are considered too
speculative geologically to have the economic considerations applied to them
that enable them to be categorized as Measured or Indicated Resources or Mineral
Reserves. Mineral Resources used in this study are not Mineral Reserves and
require further work to demonstrate their economic viability. There is no
certainty that the Inferred resources will be converted to Measured or Indicated
resources. There is no certainty that the PEA results will be realized. Since
the analysis is based on a cash flow estimate, it should be expected that actual
economic results might vary from these results. The PEA has been completed to a
level of accuracy of +35% to -10%. The PEA is not a preliminary feasibility
study or feasibility study.


The NI 43-101 compliant PEA study was prepared by NCL for Atacama Pacific based
on inputs from the following entities:




  NCL Ingenieria y Construccion SA  - Mining and Project Implementation     
  Alquimia Conceptos S.A.           - Process and Infrastructure            
  Arcadis Chile S.A.                - Environmental Permitting and Closure  
                                                                            
Key assumptions used in the economic analysis in the PEA include the        
following:                                                                  





  Gold Price (US$/oz Au)                  $1,450                   
  Exchange Rate (Chilean Peso/US$)        500                      
  Fuel Price WTI ($/barrel)               $90                      
  Electricity (MWh)                       $115                     



National Instrument 43-101

Carlos Guzman, a mining engineer, Fellow of the Australasian Institute of Mining
and Metallurgy and a registered member of the Chilean Mining Commission, is the
independent qualified person as defined by National Instrument 43-101 ("NI
43-101") for the Preliminary Economic Assessment for the Cerro Maricunga
project. Mr. Guzman is a Principal and Project Director with NCL Ingeneiria y
Construccion Ltda., Santiago, Chile and has reviewed, approved and verified the
content of this press release.


Michael Easdon, a professional geologist registered with the State of Oregon,
USA, is the independent qualified person for the current exploration program.


John Wells, a mining engineering with Alquimia Conceptos S.A., Chile, is the
independent qualified person who prepared the information related to processing
and site infrastructure.


Dr. Eduardo Magri, a mining engineer (University of Witwatersrand) and a Fellow
of the Southern African Institute of Mining and Metallurgy, is the independent
qualified person for the Cerro Maricunga resource estimate released September
25, 2012. The Cerro Maricunga resource estimate was prepared under Canadian
Institute of Mining, Metallurgy and Petroleum ("CIM") Definition Standards
(2005). NCL Ingeneiria y Construccion Ltda. undertook to prepare and is
responsible for the resource estimate under the supervision of Dr. Eduardo Magri
and Antonio Couble (NCL Associate). The $1,400 pit constrained resource estimate
was estimated through the use of economic and mining parameters applied to the
global resource.


Atacama Pacific will file a new NI 43-101 Technical Report on the Cerro
Maricunga Oxide Gold project with the applicable Canadian securities regulatory
authorities within 45 days of this press release.


For further information please visit Atacama Pacific's website at
www.atacamapacific.com.


FORWARD-LOOKING STATEMENTS

This news release contains forward-looking statements, including predictions,
projections and forecasts. Forward- looking statements include, but are not
limited to, statements with respect to the PEA, including the potential for
annual gold production in the first five years of production of 298,000 ounces,
total gold production of 2.7 million ounces over a 10.1 year mine life, initial
life of mine estimated operating cash costs of $652 /oz Au, preliminary initial
capital cost estimate of $514.6 million with sustaining capital of $249.0
million, pre-tax pay-back period of 2.5 years at $1,450/oz Au and 1.7 years at
$1,700/oz Au, pre-tax NPV of $741 million at $1,450/oz Au and a 5% discount rate
After-tax NPV5% of $531 million, pre-tax NPV5% of $1,247 million and an
after-tax NPV5% of $923 million at $1,700/oz Au, pre-tax IRR) of 33.9% at
$1,450/oz Au (after-tax IRR of 26.6%), statements regarding the expectation to
increase mineral resources, statements regarding expectations for receipt of
permits and environmental approvals, exploration results (including with respect
to water resources), the success of exploration activities generally, mine
development prospects, and potential future gold production. Often, but not
always, forward-looking statements can be identified by the use of words such as
"plans", "planning", "expects" or "does not expect", "continues", "scheduled",
"estimates", "forecasts", "intends", "potential", "anticipates", "does not
anticipate", or "belief", or describes a "goal", or variation of such words and
phrases or state that certain actions, events or results "may", "could",
"would", "might" or "will" be taken, occur or be achieved.


Forward-looking statements involve known and unknown risks, future events,
conditions, uncertainties and other factors which may cause the actual results,
performance or achievements to be materially different from any future results,
prediction, projection, forecast, performance or achievements expressed or
implied by the forward-looking statements. Such factors include, among others,
the results of due diligence activities, changes in economic parameters and
assumptions, the interpretation and actual results of current exploration
activities; changes in project parameters as plans continue to be refined; the
results of regulatory and permitting processes; future prices of gold; possible
variations in grade or recovery rates; failure of equipment or processes to
operate as anticipated; labour disputes and other risks of the mining industry;
the results of further economic and technical studies, delays in obtaining
governmental approvals or financing or in the completion of exploration, as well
as those factors disclosed in Atacama Pacific's publicly filed documents.


Although Atacama Pacific has attempted to identify important factors that could
cause actual actions, events or results to differ materially from those
described in forward-looking statements, there may be other factors that cause
actions, events or results not to be as anticipated, estimated or intended.
There can be no assurance that forward- looking statements will prove to be
accurate, as actual results and future events could differ materially from those
anticipated in such statements. Accordingly, readers should not place undue
reliance on forward-looking statements.


FOR FURTHER INFORMATION PLEASE CONTACT: 
Atacama Pacific Gold Corporation
Carl B. Hansen
President and CEO
416 861 8267
[e-mail]
www.atacamapacific.com