New Pacific Metals Replies to Tagish Takeover Bid Circular

New Pacific Metals Corp. (TSX VENTURE:NUX) ("New Pacific"), today responded to the Tagish Lake Gold Corp. Directors' Circular dated August 3, 2010 (the "Tagish Circular") in connection with the take-over bid by New Pacific (the "New Pacific Offer") to acquire all of the shares ("Shares") and all proven secured and unsecured debt ("Debt") of the Company.

The Tagish Lake Board of Directors has not yet taken a position on the New Pacific offer, but Evans & Evans, Inc., the independent financial advisor to the Tagish Lake Special Committee, has concluded that: the consideration to be paid for the Shares under the New Pacific Offer is fair, from a financial point of view, to the shareholders of the Tagish Lake. Evans & Evans, Inc. is also of the opinion that, given the scope of its engagement and the terms of its engagement letter, the fair market value of 100% of the issued and outstanding shares of Tagish as at July 15, 2010 is in the range of $7,500,000 to $8,200,000.

If all Tagish Lake Shares outstanding were tendered to the Cash Election of the New Pacific Offer, Tagish Lake shareholders would receive approximately $8,640,000 – higher than the fair market value of the Company as determined by the Special Committee's independent valuator.

If all Tagish Lake Shares outstanding were tendered to the Share Election of the Offer, based on the current market price of New Pacific shares at $1.05 (which equates to $0.8631 per Tagish Lake Share), Tagish Lake shareholders would receive New Pacific shares having a current market value of approximately $12,430,000 - a 50% premium over the highest fair market value placed on the Company by the independent valuator.

The New Pacific Offer permits Tagish Lake shareholders, for each Tagish Lake share tendered to the Offer to choose between:

1. $0.06 per share in cash (the "Cash Election"); or
2. 0.0822 of a New Pacific share (the "Share Election"); or
3. a combination of 50% in cash and 50% in New Pacific shares (the "Combined Election").

Tagish Lake shareholders who have not yet decided to tender to the Offer should note the following:

• New Pacific announced on July 27th, 2010, after the date of its takeover bid circular, that it had entered into an agreement to sell its Huaiji gold property for total consideration of $30.5 million. Assuming successful completion of the sale, and together with funds currently on hand, New Pacific would have the equivalent of $1.10 in cash per share. A "Notice Of Change to Offer to Purchase" has been filed and mailed to Tagish Lake shareholders on August 4, 2010 providing details of the sale. This monetization of New Pacific's asset makes it easier for Tagish Lake shareholders to evaluate the merits of accepting either the Cash Election or the Share Election, and further reinforces New Pacific's ability to finance the development of the Skukum project.
• The recent increases in the stock price of Tagish Lake are solely as a result of the New Pacific Offer, in the absence of which Tagish Lake shares can be expected to return to lower historic trading prices.
• The fair market value of Tagish Lake determined by the independent valuator retained by the Special Committee of Tagish Lake is approximately 10 times the $811,375 value ascribed to Tagish Lake in the failed amalgamation proposed last year between Tagish Lake and YS Mining Company Inc. ("YS Mining").

In the Tagish Circular, the Tagish Lake Board of Directors also notes the following important considerations for Tagish Lake shareholders:

• The New Pacific Offer is the only offer for the Shares and Debt outstanding at this time.
• The proposal made by YS Mining on July 20, 2010 and revised on July 23, 2010, for the recapitalization of the Company has been withdrawn.
• The Company is under Companies' Creditors Arrangement Act protection and needs funds to pay its creditors.
• There can be no assurance of future liquidity opportunities for the Shares or Debt if the New Pacific Offer is not successful.

In addition to the foregoing, New Pacific notes that one of the Special Committee's considerations in deciding not to make a recommendation in respect of the New Pacific offer is that it is of the view that YS Mining will either make a bid to acquire the shares of Tagish Lake that it does not already own or will make a proposal for the recapitalization of the Company. This appears to contradict YS Mining's own statement that it does not intend to make a bid for the Company and that YS Mining has made and withdrawn recapitalization proposals. Instead, YS Mining has advised the Special Committee that it intends to apply to the British Columbia Securities Commission for a cease trade order in respect of the New Pacific offer. In the unlikely event of such an application being successful it would deprive the holders of Tagish Lake Shares and Tagish Lake Debt from obtaining the benefits under the New Pacific Offer.

The Tagish Circular also describes a Shareholder Rights Plan (SRP) approved by the Tagish Board on March 17, 2010, but not disclosed to the market until July 8, 2010, after New Pacific had approached the Tagish Lake board with a proposal for a friendly transaction. The SRP, if not earlier terminated by the Tagish Board, will automatically terminate if not approved by Shareholders on or before September 14, 2010. (Tagish Lake has not held a shareholders meeting since March 2007). New Pacific may determine to terminate the New Pacific Offer if the SRP is not withdrawn by the Tagish Board in a timely manner. In the absence of the New Pacific Offer Tagish Lake will remain under the control of YS Mining and it is likely that Tagish Lake shares will return to lower historic trading prices.

The New Pacific Offer is open for acceptance until 8:00 pm (Vancouver time) on September 2, 2010 unless it is extended or withdrawn. The New Pacific Offer, and the offer to Unsecured Creditors, is subject to certain customary conditions including: a minimum tender threshold of 66 2/3% of the Tagish Lake Shares, receipt of all required regulatory approvals and third-party consents, the absence of any material adverse change in Tagish Lake; the absence of certain prohibited activities on the part of Tagish Lake (including share issuances, material debt issuances, acquisitions and dispositions) between the date hereof and the expiry of the Offer; and no untrue statements or omissions in Tagish Lake's public disclosure. Tagish Lake shareholder and holders of Tagish Lake Debt are urged to review the New Pacific Offer and offering circular and to tender their Shares and Debt to the New Pacific Offer.