Projects

In June 2006, Pacific Rim issued the results of an updated resource estimate for the El Dorado Project. The impetus for the updated resource estimate was primarily to quantify the gold and silver ounces at the South Minita deposit, the subject of an 18-month long definition drilling program at El Dorado that was completed in the spring of 2006. In July 2006 the El Dorado resource estimate was updated again to include inferred resources that were estimated for the Nance Dulce deposit. The Nance Dulce deposit and surrounding area remain open to the discovery of additional mineralization and the Company intends to resume drilling at Nance Dulce in the future. The inferred resource for the Nance Dulce deposit tabulated below should therefore be considered an interim resource estimate. Details of the methodology used in tabulating the 2006 updated El Dorado resource estimate are available at www.sedar.com.

El Dorado Project Resources (as of July 25, 2006)

Deposit	Resource Category	Tonnes	Gold Grade (g Au/t)	Gold Ounces	Silver Grade (g Ag/t)	Silver Ounces	Gold Equivalent Grade (g AuEq/t)	Gold Equivalent Ounces
South Minita	Indicated	1,070,900	9.25	318,400	63.99	2,203,000	10.16	349,900
	Inferred	302,800	7.20	70,100	48.23	470,000	7.89	76,800
Minita	Measured	614,100	12.23	241,500	80.59	1,591,200	13.39	264,300
	Indicated	1,175,100	9.65	364,400	58.16	2,197,300	10.47	395,700
	Total M&I	1,789,200	10.53	605,900	65.86	3,788,500	11.47	660,000
	Inferred	78,400	10.39	26,200	67.44	170,000	11.39	28,700
Nance Dulce	Inferred	128,900	19.56	81,100	121.98	506,000	21.30	88,300
Coyotera	Measured	166,000	7.86	42,100	57.79	309,000	8.69	46,500
	Indicated	501,000	7.15	115,200	58.68	945,000	7.99	128,700
	Total M&I	667,000	7.34	157,300	58.48	1,254,000	8.17	175,200
	Inferred	19,000	5.83	3,600	72.12	44,000	6.86	4,200
Nueva Esperanza	Indicated	183,000	5.77	33,900	30.47	179,000	6.20	36,400
	Inferred	29,000	4.67	4,300	35.49	33,000	5.17	4,800
TOTAL MEASURED & INDICATED ALL DEPOSITS		3,710,100	9.35	1,115,500	62.24	7,424,500	10.24	1,221,500
TOTAL INFERRED ALL DEPOSITS		558,100	10.33	185,300	68.16	1,223,000	11.30	202,800
Notes: 1) Resources based on a gold equivalent cut-off grade of 4.0 g AuEq/t 2) Gold equivalents based upon a silver to gold ratio of 70:1 3) The Minita resource is INCLUSIVE of reserves defined in the January 2005 El Dorado Pre-feasibility Study

A technical report supporting the 2006 El Dorado Project resource estimate was filed on SEDAR on July 31, 2006.

The resources above were estimated by interpreting drill intercepts in cross section, coding samples, capping assays, compositing to vein thicknesses, and estimating grades and thicknesses of each of the veins into a three dimensional grade thickness model. Each of the three veins at the Minita deposit and ten veins at the South Minita deposit were estimated separately. Readers are referred to the Forward-Looking Statements and Other Cautionary Notes and National Instrument 43-101 sections for further disclosure.


Minita Pre-feasibility Study Highlights

In January 2005 Pacific Rim released the results of a pre-feasibility study on the Minita deposit. The pre-feasibility study considers all aspects of a proposed operation at the Minita deposit, including an underground mine plan, metallurgy and processing, tailings impoundment, environmental matters, and capital and operating costs, and offers an economic evaluation of the Minita reserves. It does not include other current resources nor does it yet include the results of recent drilling by the Company at the South Minita and Nance Dulce gold zones discovered in mid-2004. The most compelling outcome of the study is that, at $163 per gold equivalent ounce, operating costs at the Minita deposit are within the lowest quartile on a world-wide basis.

Highlights from the Minita pre-feasibility study include (all monetary amounts in United States dollars; gold equivalent ounces based on $400 per gold ounce and $6.00 per silver ounce):

• Operating costs averaging $163 per gold equivalent ounce over the life of mine; including $140 and $137 per ounce operating cost in the first two years of production respectively.
• A proven and probable reserve of 490,758 ounces of gold and 3,138,016 ounces of silver at a cut-off grade of 5 g/t gold.
• Average annual gold equivalent production over a projected 6.2-year mine life of 80,497 ounces; including 87,346 and 98,576 gold equivalent ounces in the first two years of production respectively.
• Total capital costs of $66.9 million; $47.9 million pre-production capital and $19.0 million on-going capital.
• $43.6 million in free cash flow over the life of the mine with a payback period of 3.5 years (based on a gold price of $400 per ounce and a silver price of $6.00 per ounce).
• Projected pre-tax Internal Rate of Return ("IRR") of 18.1% based on a gold price of $400 per ounce and a silver price of $6.00 per ounce.

The Minita pre-feasibility study results are summarized in the following table (all monetary values in US dollars):

PRODUCTION SUMMARY
Mining and Processing Rate	750 tonnes per day
Run of Mine Ore to Mill	1,630,889 tonnes at 9.5 g/t gold and 60.3 g/t silver
Metal to Mill	497,101 ounces gold, 3.2 million ounces silver
Recovery	92% gold, 88.3% silver
Average Production	80,497 gold equivalent ounces
Peak Production	98,576 gold equivalent ounces
Mine Life (production)	6.2 years
Gross Revenue (at $400 gold and $6.00 silver)	$199.3 million
Net Smelter Return	$197.8 million
Royalties (2% government, 1.5% underlying owner)	$6.3 million
Gross Income from Mining	$191.5 million
OPERATING COSTS
Mining	$44.3 million
Processing	$22.8 million
Administrative	$13.9 million
Total	$81.0 million
Average Cash Cost per gold equivalent ounce	$163
CAPITAL COSTS
Equipment	$30.5 million
Capitalized costs	$36.4 million
Total	$66.9 million
Pre-production portion	$47.9 million
On-going portion	$19.0 million
FINANCIAL ANALYSIS
Payback (from start of milling)	3.5 years
Net Present Value @ 0%	$43.6 million
Internal Rate of Return	18.1%

The Minita pre-feasibility study resulted in the conversion of a portion of the Minita resource into proven and probable reserves. This conversion was based on the stope outlines and dimensions for resources at or above a diluted 5 g/t equivalent gold cut-off grade, where dilution was calculated on a block by block basis to account for the variability associated with variations in the vein thickness. The Minita reserve estimate eliminated those resources contained within the unrecoverable portions of the crown and sill pillars and incorporates planned dilution, unplanned dilution, backfill dilution and production losses. The total proven and probable reserve for the Minita deposit is 1,604,883 tonnes at an average grade of 9.51 g/t gold and 60.82 g/t silver for a total of 490,758 ounces of gold and 3,138,016 ounces of silver, or 535,586 gold equivalent ounces.

El Dorado Project Proven & Probable Reserves (as of January 21, 2005)
	Tonnes	Grade	Ounces	Grade	Ounces	Grade	Ounces
		(g Au/t)	(Au)	(g Ag/t)	(Ag)	(g AuEq/t)	(AuEq)
Proven	711,949	10.09	230,908	68.30	1,563,425	11.06	253,242
Probable	892,934	9.05	259,850	54.85	1,574,591	9.84	344
Total	1,604,883	9.51	490,758	60.82	3,138,016	10.38	535,586
Notes:
1) El Dorado Project proven and probable reserves at 5 g/t equivalent gold cut-off grade.
2) Reserves derived from cutoff grades based upon US$350/oz gold and US$5.00/oz silver market price.
3) Values shown in table are diluted and do account for mining recovery.

Note to US Investors: These reserves have been calculated in accordance with National Instrument 43-101, which differs significantly from the requirements for reserve disclosure under SEC Industry Guide 7. Industry Guide 7 requires a "final" or "bankable" feasibility study to make reserve disclosure. Readers are refered to Cautionary Notes for further information.


Project Description

The El Dorado gold project is located 65 km east of El Salvador's capital city San Salvador, and 12 km west of the city of Sensuntepeque (pop. 49,000). The project comprises three exploration licenses that total 144 square kilometers (14,400 hectares) and are 100% owned by Pacific Rim. In accordance with El Salvadoran law, Pacific Rim presented a request for the conversion of a portion of the El Dorado exploration licenses to an exploitation concession in December 2004. The Company is awaiting its granting of an exploitation concession (the only permit required to commence operations).

The El Dorado project is accessible by a paved highway that crosses the center of the property. The travel time from the project site to downtown San Salvador is approximately 1.5 hours. The area has a large rural population and Sensuntepeque is a moderate sized town. Unskilled labour and persons with general business and technical skills are readily available. El Salvador does not have an indigenous mining industry, so local personnel will be trained with exploration and mining skills.

The usual public utilities are available in Sensuntepeque. The communication infrastructure, including telephone and internet, is serviceable. The existing buildings on the project site are connected to the national electrical grid, but the power supply as currently configured is not considered reliable enough to service a mine.

The terrain in the El Dorado project area is one of moderate relief surrounded by higher hills to the north, east, and west. Elevations range between 200 m and 800 m above sea level. A tropical climate prevails, with a pronounced wet season from May to October and a dry season the remainder of the year. The project area contains shallow topsoils and volcanic subsoils that are cultivated for seasonal crops. Five perennial streams or rivers traverse the El Dorado project area. Water levels vary with the seasons: good flows are maintained during the wet season but many run dry during the dry season.

The El Dorado project hosts a very large (roughly 12 km by 4 km) adularia-sericite (or "low-sulfidation") epithermal gold system, in which gold and silver are hosted in veins that occupy a series of fault structures. In epithermal systems, precious metals are carried by fluids, and precipitate out of solution under certain pressure and temperature conditions known as the 'boiling zone'. Typical of similar epithermal systems worldwide, including the Midas and Sleeper Mines in Nevada, the El Penon Mine in Chile and the Hishikari Mine in Japan, high grade mineralization at El Dorado occurs in distinct, periodic concentrations within the boiling zone or "productive interval", which at El Dorado is between 0 and 400 meters above sea level.

Note to US Investors: Mineral resource and reserve estimates have been calculated in accordance with National Instrument 43-101 as required by Canadian securities regulatory authorities, which differ from standards of the U.S. Securities and Exchange Commission.