LE V EL 2

8 COL I N STREET WEST PERTH WA 6005

PO BOX 1726

WEST PERTH WA 6872

TELEPHONE: +61 8 9211 2000 FACS I MI LE: +61 8 9211 2001

ASX SHARE CODE: EXS

EMAI L : ⋅ in fo@excoresources.com.au

WEBSITE www.excoresources .com.au

ABN 99 080 339 671

13th October 2009

Market Release (via electronic lodgement)

DRILLING TO RESUME AT CLONCURRY COPPER AND HAZEL CREEK PROJECTS

• Drilling planned to test priority targets at E1 Camp, Monakoff Region and Pumpkin Gully Syncline with the aim of adding further value to the Cloncurry Copper Project.

• New Hazel Creek programmes designed to follow-up on previous ore-grade intersections at various prospects including Eight Mile Creek and Turpentine South.

Reverse Circulation (RC) drilling is scheduled to commence on a number of Exco’s key regional exploration prospects within the Cloncurry Copper and Hazel Creek Projects (see Figure 8). The drilling programmes have been planned both to follow-up on previous positive results at a number of prospects, and to focus on untested or partially tested geophysical anomalies. Further details are outlined below.

CLONCURRY COPPER PROJECT (CCP)

E1 Camp - Regional magnetic anomalies

The E1 Camp is already host to a sizeable resource base comprising 44.8Mt @ 0.75% Cu & 0.21g/t Au and containing 338,000t of copper and 309,000 oz of gold (see Table 1). Recent drilling has been successful in both expanding this resource base, and in converting a significant percentage (~55%) of Inferred resources to the Indicated category as the basis for an ultimate mineable reserve for the CCP. Remaining within the E1 Camp are numerous geophysical anomalies that are considered highly prospective, but which are, as yet, largely untested. Several key magnetic anomalies to the south and east of the known E1 Deposits are considered to be regionally significant and have therefore been selected for further drill testing (see Figure 1). To date, despite having been subjected to only limited drill testing, the results of previous programmes on these anomalies have delivered encouraging levels of both copper and gold, indicating the magnetite alteration has associated copper phases.

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Figure 1: Map of E1 Deposits and planned drilling targets

Monakoff North

Established resources at the Monakoff and Monakoff East Deposits together comprise 4Mt @ 1.32% Cu & 0.42g/t Au, containing 53,000t of copper and 54,000 oz of gold (see Table 1). A key aspect of these deposits is their relatively higher grade, such that finding additional sources of similar material is a high priority for the Company. The region around Monakoff is host to a number of buried magnetic anomalies of similar size and intensity to that associated with the known deposits (see Figures 2 & 3). Moreover, adding to the prospectivity is the fact that the geological and structural setting of these anomalies appears similar to both Monakoff and the E1 deposits to the North. A number of these anomalies have therefore been selected for initial testing.

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Figure 2: Monakoff Northwest

Figure 3: Monakoff North

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Pumpkin Gully Syncline The Pumpkin Gully Syncline (PGS) hosts numerous prospects in a range of geological settings. The syncline is composed of folded sequences of metavolcanics and metasediments with an extensive ironstone unit broadly following the contact between the metasediments and metavolcanic rock units. This ironstone hosts the Monakoff and Monakoff East Deposits on the northern limb of the syncline, the Pumpkin Gully Prospect at the interpreted closure of the syncline, and the Fisher Creek West Prospect on the southern limb (see Figure 4). The ironstone has a total strike length of more than 10km on the northern limb of the syncline. Airborne magnetic survey data suggests the continuity of southern limb may have been somewhat disrupted; however, work to date has highlighted significant prospectivity. Initial programmes will focus on the Fisher Creek West area where last year’s drilling of a coincident magnetic and Induced Polarisation (IP) geophysical anomaly intersected 20m @ 0.84% Cu and 0.23 g/t Au (see Figure 4). Visible oxide copper has also been noted in recent mapping approximately 1500 metres west of this drill hole, associated with a previous soil geochemical anomaly that has not yet been drill tested. Significant mineralisation has also been intersected adjacent to the southern limb of the PGS within black shale units in contact with metavolcanics, and often associated with calc silicate breccias. This target type will be drilled at the Salebury and Fisher Creek Prospects where the best intersections to date are 30m @ 1.93% Cu and 1.25 g/t Au, and 28m @ 3.7% Cu and 3.1 g/t Au respectively (see Figure 4).

Figure 4: Map of the Pumpkin Gully Syncline showing prospects and best intersections

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Tanbah Prospect

Zones of copper mineralisation associated with brecciated siliceous and calc silicate rocks have been mapped at the Tanbah Prospect (see Figure 5) over a strike length of more than 400 metres. Previous exploration in this area by other companies focused primarily on gold, however, a soil geochemistry survey over part of the area highlights widespread copper anomalism. An initial programme of drilling will test the apparent width and continuity of this mineralisation below surface.

Figure 5: Location map showing the Salebury South and Tanbah Prospects

Images of copper outcropping at the Tanbah Prospect

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HAZEL CREEK PROJECT The Hazel Creek Project area includes the Turpentine Deposit (1.8mt @ 1.03% Cu & 0.2 g/t Au) (see Table 1), and a number of other prospects where ore grade mineralisation has previously been intersected (see Figures 6 & 7).

Figure 6: Location Map showing Hazel Creek Project area

The more advanced prospects include:

• Eight Mile Creek - best intersection to date of 30m @ 0.90% Cu • Eight Mile Creek North - best intersection to date of 44m @ 0.90% Cu & 0.1 g/t Au • Eight Mile Creek East - best intersection to date of 16m @ 0.86% Cu & 0.18 g/t Au • Brumby - best intersection to date of 20m @ 0.78% Cu • Turpentine South - best intersection to date of 12m @ 0.79 % Cu & 0.42 g/t Au, and • Quail Creek - high grade boulders of oxide copper at surface and anomalous copper in

drilling to date

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Figure 7: Magnetic Image highlighting best intersections at the Turpentine, Turpentine South and Eight Mile Creek Prospects

Whilst previous drilling in this area has indeed intersected many zones of anomalous to potentially ore grade copper- gold mineralisation, the programmes have been relatively widespread and further systematic work is required to fully assess the prospectivity and resource potential of the numerous targets. As part of a more systematic approach, a Sub Audio Magnetics (SAM) survey has just commenced in this area, as shown in Figure 7. The survey will assist in better defining the magnetic trends and zones of conductivity, which in turn will enable further target prioritisation. Initial programmes will focus on Eight Mile Creek East where shallow RC drilling several years ago tested two magnetic anomalies approximately 500m apart. Both returned positive results of 16m @ 0.86% Cu & 0.2 g/t Au and 14m @ 0.7% Cu and 0.21 g/t Au (see Figure 7).

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The prospective basement rocks have been interpreted to occur below approximately 50 metres of cover in this area and follow-up drilling is therefore warranted. It is also planned to carry out further work at Turpentine South where the most recent drilling late last year intersected near surface oxide mineralisation (12m @ 0.79 % Cu & 0.42 g/t Au) (see Figure 7). The magnetic anomaly associated with this mineralisation comprises multiple bodies and is approximately 1km in strike extent. Once again it is planned to test the deeper, primary zone during the forthcoming programme.

Further information and results and will be provided in due course.

On behalf of the Board of Exco Resources Ltd Michael Anderson Managing Director

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 mineral resources and exploration results is based on data compiled by Mr Stephen Konecny (who is a full time employee of Exco Resources Ltd). Mr Konecny 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 Konecny consents to the inclusion of the data in the form and context in which it appears.

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TABLE 1: EXCO RESOURCES – NW QUEENSLAND Cu-Au RESOURCE SUMMARY

Deposit Class Tonnes Grade Metal Cu% Au g/t Cu T Au Oz

E1 Camp (2) Indicated* 24,600,000 0.83 0.24 205,000 194,000Inferred* 20,200,000 0.7 0.2 133,000 115,000

TOTAL 44,800,000 0.75 0.21 338,000 309,000

Monakoff (1) & Monakoff East

Indicated 2,000,000 1.39 0.44 28,000 28,000Inferred 2,000,000 1.3 0.4 25,000 26,000TOTAL 4,000,000 1.32 0.42 53,000 54,000

Great Australia (1) Indicated 1,400,000 1.53 0.13 21,000 6,000Inferred 800,000 1.57 0.14 12,000 3,000TOTAL 2,100,000 1.54 0.13 33,000 9,000

Sub-total – CCP Indicated 28,000,000 0.91 0.25 254,000 228,000Inferred 23,000,000 0.74 0.19 171,000 144,000

ALL 51,000,000 0.83 0.23 425,000 373,000

Other Deposits

Turpentine Indicated 1,627,000 1.04 0.21 17,000 11,000

Inferred 215,000 0.9 0.16 2,000 1,000

TOTAL 1,841,000 1.03 0.2 19,000 12,000

Taipan Inferred 1,460,000 0.80 0.1 12,000 5,000

Kangaroo Rat (1) Inferred 875,000 1.65 1.0 14,000 28,000

Wallace South Inferred*** 1,000,000 - 1.6 - 53,000

Victory-Flagship Inferred 196,000 1.2 1.4 2,000 9,000

Mt Colin (1) Measured** 113,800 3.80 - 4,300 -

Indicated** 311,000 3.49 - 11,000 -

Inferred** 242,000 3.16 - 8,000 -

TOTAL 668,800 3.43 - 23,300 -Sub-total - Other 6,039,000 1.16 0.55 70,300 107,000

TOTAL 57.0 Mt 0.87 0.26 495,000 480,000

Note: Discrepancies in totals are as result of rounding

(1) Granted Mining Lease

(2) ~30 % of E1 camp resources on a granted Mining Lease

Unless otherwise stated the above resources are reported at a 0.5% Cu cut-off.

* E1 resources completed at 0.3%Cu cut-off. ** Mt Colin resource cut-off = 2.3% Cu. *** Wallace South resource cut-off = 0.5g/t

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Figure 8: Location map highlighting planned drilling targets at Cloncurry

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Information on Exco Resources Exco is an Australian focused ASX-listed mining company (ASX: EXS) with a dual focus on developing both the White Dam Gold Project in South Australia, and the Cloncurry Copper Project (CCP) in north-west Queensland. In addition, the Company has renewed its exploration efforts at the highly prospective Hazel Creek Project, also in north-west Queensland.

At White Dam Exco has entered a 75:25 joint venture with Polymetals Group Pty Ltd, who will manage the implementation and operation of the project. The project, which contains a resource inventory of 325,000 ounces of gold, has now been granted final approvals and debt financing has been secured through Barclays Capital. The JV partners have commenced construction, with first gold production scheduled by early 2010. The relatively short-life project is expected to produce a total of 120,000 oz of gold at a rate of 50,000oz/annum. Near mine exploration and resource potential is expected to ultimately increase overall production and with estimated operating costs of only ~A$600/oz, the project has the potential to deliver significant cash flows.

In north-west Queensland Exco holds a large (>4,100km2), strategically located and highly prospective land package. The CCP comprises numerous tenements and mining leases, which host the flagship E1 Camp, Monakoff and Great Australia deposits. Resources delineated for the project to date total 51Mt, containing 425,000 tonnes of copper and 373,000 ounces of gold, with further exploration upside and indicated resource development highlighting the potential for economic extraction of a significant portion of the resources.

Exco completed a Pre-Feasibility Study (PFS) on the CCP in June 2008, which demonstrated the technical and commercial credentials of a 2Mtpa project. Encouraged by the positive PFS results, and with ongoing drilling delivering further resource upgrades, the Company commenced a Definitive Feasibility Study (DFS) on a slightly larger operation treating 2.5 to 3Mtpa through a concentrator facility located at the E1 Camp. At this expanded throughput the project will produce ≥25,000 tonnes of copper in concentrate per annum (25% more than envisaged by the PFS) with substantial by-product credits from gold, cobalt, magnetite and potentially uranium. The Company has now submitted its Environmental Impact Statement (EIS) in pursuit of the relevant approvals for the CCP.

Drilling is about to recommence at the Hazel Creek Project, where numerous geophysical targets remain untested. An initial resource at Turpentine (1.8Mt @ 1.0% Cu), and multiple ore grade intersections at other prospects, demonstrates the significant potential of this greenfields project.

Exco also has a number of exploration joint ventures in Queensland with major companies including Xstrata, BHP Billiton Limited and Ivanhoe Mines. These JVs are managed by Exco’s partners, creating additional development options, and allowing the Company to maintain its primary focus on the CCP.

The Board, backed by the Company’s major shareholders including Ivanhoe Mines and the Lion Selection Group, and the management of Exco are committed to unlocking value from this highly prospective portfolio of projects, and looks forward to keeping shareholders informed of developments.

Further information is available at www.excoresources.com.au