With the recent release of the NI 43-101 compliant Definitive Feasibility Study (DFS), Baja Mining is now in a position to fast-track project development to achieve production in mid-2009.  The DFS is a compilation of the results of two test mining programs, two process pilot campaigns, and a +38,000 metre in-fill drill program completed on the Boleo project.

Highlights

• Commercial life of mine average cash cost of negative $0.07/lb of produced copper, net of by-products
• Average annual production, for the first four years of production:
  • Copper cathode: 55,750 tonnes
  • Cobalt cathode: 1,535 tonnes
  • Zinc contained metal: 6,300 tonnes
• Total Capital Cost is $568.4 million
• Proven and probable reserves provide for 25 year mine life
• Measured and Indicated resources: 277.2 million tonnes grading 1.77% copper equivalent
• Inferred resources: 253.2 million tonnes grading 1.29% copper equivalent
• After-tax IRR of 24.7%, or 46.0% at current market prices
• After-tax NPV (at 8% discount rate) of $700 million, or $2.3 billion at current market prices
• Upside from potential manganese production is still available and will increase the base case NPV by an additional $302 million
• Manganese (contained in manganese carbonate) production could exceed 100,000 tonnes/year at the current design capacity

Current Activity

Site Preparation:
Phase 1 of flora and fauna relocation was completed in late 2008 as part of the Company’s Environmental permit requirements. The Company must ensure that all flora and fauna in areas where there ground will be disturbed due to construction activities must first be relocated to other areas of site. Groundwater monitoring and baseline environmental data collection work is continuing. 

Construction Activities
Currently there is no construction activity related to the progression of Boleo happening on site. In October 2008, due to the global economic crisis, the Company made the decision to delay construction and slow down progress on Boleo in an effort to conserve its cash position until such time as construction financing was completed.  Construction activities will resume once commitments for construction financing have been secured.

Financing:
Strong support of the Boleo project has been shown by the financial community, including project finance lenders and metal off-take parties. The Company had made considerable progress in the latter half of 2007 and 2008 to arrange the majority of financing required for the project. As the international banking market began to weaken, an eventually freeze, in the fourth quarter of 2008, project debt facilities Baja had arranged did not close. Baja has been working closely with its advisor, Endeavour Financial, to work towards arrangement and completion of project financing. The Company will announce any developments in this area as they become available.

Engineering and Construction:
In May 2009, the Company signed a letter of intent with ICA Fluor to perform the engineering, procurement and construction management (EPCM) for the Boleo project.

The project will be performed in two phases.  MMB has released ICA Fluor to work on Phase I, which consists of the development of an open book capital cost estimate and project construction schedule. The cost estimate will reflect current market conditions and be supported by the work performed to date (about 30% of engineering has been completed). The Phase I capital cost estimate will be subject to independent third party review, and is expected to be completed by the end of the third quarter of 2009

Phase II will include the execution of engineering, procurement and construction management necessary to bring the project into production.  The parties are currently negotiating an interim Memorandum of Understanding which will include the general terms and conditions of a reimbursable EPCM contract. Phase II will commence upon completion of construction financing.

Manganese Progress:
In June 2009, the Company announced a key milestone has been achieved towards manganese metal production at its Boleo project in Baja, Mexico. Staff at the University of British Columbia’s Hydrometallurgy Research Laboratory successfully demonstrated that manganese metal can be manufactured from Boleo manganese carbonate using conventional hydrometallurgical processing steps. A sample of manganese carbonate produced during the 2006 Boleo demonstration pilot plant at SGS Lakefield was used as feedstock for the tests which were done under the supervision of Dr. Thomas Glück, Baja’s Manager Process Technology and Dr. David Dreisinger, Baja’s Vice President—Metallurgy. More information is available in the Company’s news release dated June 16, 2009.

DFS ADVISORS
The DFS incorporates capital and engineering estimates prepared by Bateman Engineering (“Bateman”) and Wardrop Engineering (“Wardrop”) for the process plant and mine plan developed by Agapito Associates, Inc (“AAI”), Australian Mine Design and Development (“AMDAD”) and Wardrop in accordance with NI 43-101 standards.