UPDATE February 22, 2012 regarding news release entitled "Tosca Mining Releases NI 43-101 Resource Estimate and Metallurgical Results for Red Hills, Texas";

UPDATE February 2, 2012

The company's primary asset is the Red Hills Molybdenum/Copper project located in Presidio County, Texas. A program to confirm, and expand the considerable size and potential of the project and evaluate various economic scenarios was completed in 2011.
 
Tosca recently received results from the 13 remaining holes from its phase two, 16,000 M (4,873 m) diamond drill program. Per Tosca’s Chairman, Dr. Sadek El-Alfy, “the drill program has successfully verified historic drill results of the shallow Copper-Molybdenum cap and confirmed the presence of a deeper, well mineralized Molybdenum Porphyry deposit.” The results of 21 holes drilled through the copper/moly cap in Tosca's 2011 drill program give a weighted average grade of 0.39 % Cu over a core length of 113 feet (34.5 m). Since the copper cap is subhorizontal, the average core length can be interpreted as being approximately equivalent to true width. The copper/moly cap is crescent shaped, approximately 4,000 feet (1220 metres) long and 400 feet (122 m) to 1000 feet (305 m) wide.
 
The 2011 program encountered numerous thick Molybdenum mineralized intervals including Hole TMC-25 wich intersected 1,189 feet (362.4 m) averaging 0.089 per cent Mo including 830 feet (253 m) of 0.1 per cent Mo from 359 feet (109.8 m) to the bottom of the hole. Hole TMC-29 cut 989 feet (301.4 m) averaging 0.09 per cent Mo including 139 feet (42.4 m) of 0.16 per cent Mo. The molybdenum grades are similar and in some cases higher than those of projects currently considered of potential economic interest."
 
Aggressive plans are in place for 2012 to conduct metallurgical tests, produce an updated resource estimate and Pre Economic Assesment. Tosca is operated by an experienced mine development team, operates in Texas, a mine-friendly jurisdiction and its property iseasily accessible with infrastructure in place to advance operations.

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--- Copy of archived (dated) story below ---

Location & Infrastructure

The Red Hills advanced stage Copper and Molybdenum project is located 18 kilometers north and west of the Texas-Mexico border town of Presidio which is served by US highway 67 and the South Orient Railroad. The 2,880 acre project lies along a seven kilometer mineral district characterized by significant occurrences of precious and base metals, including the Shafter-Presidio silver deposit owned by Aurcana.

The infrastructure at the project is good, with a paved road, easy access, water and power close by, and a rail system in the local town of Marfa, there are no significant challenges. The project is in a mining friendly jurisdiction, the semi-desert climate allows for year round exploration and development, permitting is uncomplicated, and the Red Hills project is on private land.

Marfa is the Texas base for Tosca and is where the crew is residing. Just 20 miles from the mine site, Marfa’s claim to fame is that it is where No Country for Old Men, and the 1956 Academy Award winner Giant with James Dean was filmed.  The drive from Marfa towards the mine site is on a well paved road, there is a ~10 minute drive down a gravel road when the mine site is accessed. The actual mine site is tucked behind a hill and is difficult to see from the main road.

Figure 4. Red Hills Molybdenum-Copper Project claim map superimposed on satellite image (above). The red squares are the claim boundaries and off in the right is a town called Shafter (basically a ghost town). The Shafter Mine is a big silver deposit which is owned by Aurcana Corporation, they are headed towards production. If you look from right towards left you can visibly see a trend that goes right into Tosca's claim blocks. And if you look at claim block 34 you can actually see the redness of the TSQ.V Red Hills copper. Highway 67 runs right to Marfa. The distance from Aurcana to claim block 34 is ~7 km.

Figure 5. Image, Shafter-Presidio Mineral District (above). The Red Hills moly/copper project lies approximately 8 km from the Shafter Silver Mine of Aurcana Corporation. The image above shows the mineralized trend starting in silver way off on the right, ending in copper where you see the Red Hills intrusive. Interesting enough, since this is a polymetallic trend, TSQ.V also has lots of gold and silver on surface. On both the right and left of the intrusive you can see gold chip samples; Duval's 1970 chip samples 0.02 to 0.15 oz per tonne, Tosca Mining's claim block 34 covers the entire intrusive (that upside down horseshoe) section and adjacent area.

The Deal

Reflected in the deal is the fact this is a serious asset that was only parted to Tosca Mining due to the strong history of the directorship/technical leadership in big moly and taking projects to production; TSQ.V acquired Red Hills by letter of intent [now formal agreement] with an interest to earn 100%; US$10.9 million cash over five years (with virtually no money up front, first year commitments are $575,000 + 400,000 common shares), 2.1 million Tosca shares over five years (see related April 6, 2011 new release entitled "Tosca Mining Signs Option to Acquire the Red Hills Molybdenum-Copper Project in Texas").

Figure 6. Image Red Hills Molybdenum-Copper Project (main image above) & Model (inset) - You can see the red hills is the background, which is where the historic drilling has taken place and is a good picture of the surface of the deposit. One can see this is easy country to work with. Visualize extracting this all out and making it into a pit as that is the near term plan should confirmation drilling this Q2 & Q3 2011 confirm the historic results.

History & Findings (from 88 historic drill holes)

Much of the heavy lifting on Red Hills has already been done by past operators, TSQ.V simply needs to confirm data via drilling on the copper asset and build more data on the Molybdenum

The property was worked by several major companies (ASARCO, Phelps Dodge, Amax and Duval) between 1955 and 1972. Most of the drilling (88 holes in total) took place in 1970-71 under the operatorship of Duval Corporation. In 1997, using an evaluation price of $ 0.80 per pound for copper Rio Grande Mining Company conducted Pre-Feasibility studies aimed at determining the viability of extracting the shallow historic copper resources previously identified at Red Hills. At the time all these past operators were looking for a "large" copper resource, they didn’t find it, instead they found this copper blanket. Rio Grande Mining's prefeasibility on the copper shows modeling, mine site planning, construction planning, and reveals a significant asset for TSQ.V to take into business at today's prices. Rio Grande decided not to move forward because copper was $1/lb at the time. None of the companies really spent any time looking at the moly underneath however analysis of the data indicates that that is where the big 'company-maker' money is at.
 
Based on historic drilling, the following targets have been identified:
 
1) A copper blanket with an historic resource estimated at 17.1 million tons averaging 0.35% Cu with associated molybdenum credits • Low strip ratio • 1997 studies showed profitability at $1.10 Cu and $4.50 Mo

Figure 8. Previous Drilling - Copper - The green line drawn outlines the dimensions of the copper blanket.

Mining MarketWatch Journal notes the copper bed resource is possibly closer to 25 million tons averaging 0.35% rather than the 17.1 million (non NI 43-101) historic tons; if you look in the middle it says 'AMAX1', Amax took this property on and drilled one 2000 ft hole and hit nothing and then left, you can see there is ~500 feet between AMEX and the bottom of the green outline, it is believed this area could possibly accommodate revisions upward. Much like Mercator Minerals it appears that the deposit has a barren core which Amax drilled into.

The copper material is chalcocite (a sulphide mineral of copper common in the zone of secondary enrichment, almost leached copper in nature) and very shallow (a definite economic plus in the attractiveness of the asset for mining purposes), the copper deposit is less than 300 ft and in some cases as shallow as 50 ft. 

Selected Copper Intercepts:

Figure 9. Selected Copper Intercepts - Currently TSQ.V is pegging the average copper grade at ~0.35% , however it is probably more between .4 to .5 -- after confirmation drilling TSQ.V will know.
 
2) A high grade shallow copper zone defined by the following three vertical holes.

If you look at ~1 o’clock on the outside of the green outline in the image of the green outline of the copper dimensions you can see it says 'high grade copper' – there are 3 holes there:
      • Hole 36: 110 feet (33.5 metres) of 9.09% Cu from 70' (21.3 m) to 180' (54.9 m)
      • Hole 59: 70 feet (21.3 metres) of 6.12% Cu from 140' (42.7 m) to 210' (64.0 m)
      • Hole 55: 70 feet (21.3 metres) of 7.77% Cu from 110' (33.5 m) to 180' (54.9 m)
 
These are extremely high values, as there are only three holes there and they are all vertical there is insufficient data to determine the size and nature of this structure. Part of Tosca’s current drill program will be to test this area in an attempt to better understand the potential of this high grade.

In the fall Tosca will do some line IP which should help matters in these regards -- Tosca cannot do IP right now because the ground is too dry and the conductivity just isn’t there. The obvious thing here is that if Tosca can put together enough (100 – 150M tonnes) of this grade that would cover its capex. The three holes, which lie along a northeast linear trend, are located 300 feet (91 metres) northeast of the porphyry stock. The distance between hole 36 and 59 is 120 feet (36.6 metres). Hole 55 is located 75 feet (22.9 metres) southwest of hole 59. Further drilling, including angle drilling is required to assess the nature and size of this high grade copper zone.

3) A molybdenum (copper) porphyry system which occupies a horseshoe shaped zone approximately 1000 m long and 200 m wide.

Most of the previous drill holes within this zone were stopped at an average depth of 430 feet (131 metres) while still in mineralization. Only five holes were drilled past the 1,000 foot (305 m) depth. All intersected molybdenum mineralization from top to bottom. The deepest hole (Duval 7), which was drilled to a vertical depth of 2106 feet (642 metres) averaged 0.076% Mo throughout. The Red Hills moly porphyry target is open in two directions and at depth.

Figure 11. Previous drilling delineating Molybdenum horseshoe pattern

Although the copper blanket is reasonably small it is likely very profitable as it is shallow and underneath it lie a very large moly system! The moly system has yet to be defined and we say that only because there hasn’t been that many holes entering the moly. One of the reasons to get excited is hole DH7; DH7 is a phenomenal 2000 ft hole that runs almost concise grade from top to bottom of .076% molybdenum.

Moly Highlights:
      • 28 of 88 holes in moly zone
      •  Average hole depth: 652 feet (199m)
      • 5 of 28 holes exceed 1000 feet (305m)
      • Deepest hole: DDH 7, 2016 feet (642m) @ 0.076% Mo
      • Average depth of remaining 23 holes: 431 feet (131m)
      • Weighted average moly grade of 71% of intercepts is 0.07% Mo at 0.05% Mo cutoff
      • Open to the South and at depth
      • Present dimensions 1000m x 200m

Figure 12. Selected Molybdenum Intercepts
 

Aside Note: Figures seen and quoted in this article are historic estimates which have not been verified by a QP and should not be relied upon. Confirmation drilling this Q2 & Q3 2011 by TSQ.V is expected to affirm the historic data and build on it.

Following through on the focus of the Company -- to take a quality project into production, mining of the near surface copper blanket will provide a means to economically advance and exploit the large Molybdenum zone that lies beneath.

Moly grades 0.07% and up are considered good grades and using 0.05% moly cutoff to mine high grade TSQ.V can conceivably spread out for a large open pit -- confirmation drilling this 2011 at Red Hills is going to be exciting and interesting from a standpoint of the increasing the size of the asset and working towards determining its economics.

Figure 13. Red Hills Cross Section Looking North - The blue pods at the top (at and near surface) that is the copper.  The pink zone is the moly. Seen from the left and right is the pit outline to 1000 ft. Looking at figure 13, if you figure that the blue copper is ~20M tonnes you get a feel (comparatively) for how big the moly could be -- right now the forward looking of the engineering is that the moly is 120M – 150M tonnes of .075% and greater which runs about $1.5 billion at today’s prices, however that is thought to be just the tip of the iceberg.

TSQ.V is right now drilling 12,000 ft (~4,000 m), not to explore it but rather to confirm the existing copper data and see if it can be expanded. While drilling the copper, the holes can just be deepened, giving more data on the underlying Moly deposit. TSQ.V is drilling into the copper because the Company needs to take this to 43-101 resource. Since the core is not available from the old drill program TSQ.V is basically doing confirmation, not exploration.

The horseshoe is actually thought to be a doughnut for the molybdenum

There is evidence that this moly system extends in a southerly direction and that TSQ.V is looking at an extremely large, possibly up to 500M tonnes of moly;

Drill hole 'D9' (seen at the bottom of the moly horseshoe figure, in the foreground away from the hills) is quite a distance from the other drill holes and yet it hit .075% moly at 300 ft. This indicates that the moly system is likely much larger and could be more a doughnut than a horseshoe. If TSQ.V does have 300 – 400M tonnes of moly then it is sitting on $3 to 4 billion worth ore at today's prices (note the future is very bright for Moly, qualified analyst forecasts we could get our hands on for molybdenum prices were all very bullish).

The mill process for the copper would be floatation because of its calcocite nature, plus floatation is better for moly anyways. The goal is to put the copper into production first and inexpensively, achieving cash flow. While this is underway, more drilling to determine the full size of the moly deposit would occur. The likelihood is that moly prices will continue to rise as China has deemed it a strategic metal. The management has many years of experience in low cost production with contacts all over the world in mine equipment and individuals with the needed expertise! The capex would probably be in the $100M – 150M range -- this is reasonably small compared to some others in the business which run well above $600M.

Maximizing shareholder value

It is too early for TSQ.V to do an off take agreement, however Tosca has already been approached regarding the shallow copper bed. Back of the envelope calculations show that amount of copper so close to surface could throw off ~$60 million/year for 8 years from a nominal ~$100M capex for mill and mine site development, the mill could then be used to process the Mo zone -- that is the model that Mercator Minerals Ltd. (which was recently purchased/merged with Creston Moly Corp.) used to put its moly into business. There is likely an equal amount of copper, although lower grade mixed in the Moly Zone, this would add to the bottom line as the moly is mined the copper credits add value. Shareholders and potential investors in TSQ.V would do well to look at the phenomenal success Mercator encountered in its growth to maturity as it appears a similar situation is about to repeated for TSQ.V here at Red Hills. One only needs to look at the curriculum vitae of the directorship/technical leadership of Tosca to know where this is going -- the management has production experience, recent copper/moly success; Tosca Mining's CEO Dr. Sadek El-Alfy is a professional Mining Engineer with 35 years experience and was COO at Creston Moly Corp. where he was instrumental in preparing the Pre-Feasibility and Environmental Impact Studies for a large scale Moly/copper deposit in Northern Mexico.

Initial Plan of Action
• Prepare 43-101 compliant report based on historic drilling
• Quantify geometry and extent of high grade copper zone (5 holes, 500m)
• Carry out verification drilling within shallow copper-moly blanket (10 holes , 1,500 m) and select samples for metallurgical tests.
• Verify and deepen previous drill holes in moly zone (4 holes, 1,400 m).
• Investigate extensions to the moly zone (2 holes, 600 m)
• Prepare Pre-Economic Assessment of shallow copper blanket and associated moly mineralization (M.D.A. Reno & M3 Engineering, Tucson)

See related May 26, 2011 release entitled "Drilling Underway the Red Hills Copper-Molybdenum Project".

See related July 18, 2011 release entitled "Tosca Reports 70 Feet (21.3 M) of 6.71% Cu Including 26 Feet (7.9 M) of 14.1% Cu at Red Hills High Grade Zone; Additional Drilling under Way".

Tosca Mining's Drill Results at Red Mountain as of July 18, 2011

Mining MarketWatch Journal Note: The work that is being done now will morph itself into a document sometime in ~October 2011 and that document will be somewhere between a pre economic assessment and a pre feasibility about taking the copper into business and some updates on the moly. By then the reality of the magnitude of what Tosca possesses at Red Hills will be better understood by the marketplace and could well translate to substantial share price appreciation.

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