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New Pacific Metals Announces Intention to Make Take-over Bid for Tagish Lake Gold Corp.

Vancouver, British Columbia (July 5, 2010) â€" New Pacific Metals Corp. (TSXV: "NUX.V") ("New Pacific"), announces today that it intends to make an offer to purchase all of the common shares (the "Offer") of Tagish Lake Gold Corp. ("Tagish Lake", TSXV: TLG.V). New Pacific's offer is $0.06 per share payable in cash or in 0.0822 New Pacific shares, or a combination of 50% in cash and 50% in New Pacific shares at the election of the Tagish Lake shareholders. New Pacific is concurrently offering to purchase for cash the approximately $7.4 million in secured and unsecured debt on the books of Tagish Lake. Secured creditors of Tagish Lake (the "Secured Creditors") are being offered 100% of their proven claim amounts with no conditions, and unsecured creditors (the "Unsecured Creditors") will be offered 100% of their debt on the books of the Company subject to the fulfillment of certain conditions under the take-over bid.

The Offer for the Tagish Lake common shares represents a premium of 50% over Tagish Lake's closing share price on July 2, 2010, and a 50% premium to Tagish Lake's 20-day, and year to date volume-weighted average closing price ("VWAP") on the TSX Venture Exchange ("TSXV"). New Pacific is offering Tagish Lake shareholders certainty, and a solution to remove Tagish Lake from Companies Creditors Arrangement Act ("CCAA") protection, with a compelling premium to the longstanding share price, in a bid that enables them to choose to cash out or participate in the development of Tagish Lake's Skukum Creek Gold District.

New Pacific has $10 million in cash, a further $10 million available under a line of credit, a transparent ownership structure and a track record of raising capital in North American financial markets. Its management and directors have a history of operational success in bringing high grade, narrow vein mines into production effectively.

The Offer

The Offer permits Tagish Lake shareholders to choose between:

(a) $0.06 per share in cash (the "Cash Election"); or

(b) 0.0822 of a New Pacific share (the "Share Election"), at an implied price of $0.73 per New Pacific share, being the 20 day VWAP of New Pacific shares on the TSXV up to July 2, 2010; or

(c) a combination of 50% in cash and 50% in New Pacific shares (the "Combined Election").

Consideration receivable by Tagish Lake shareholders under the Offer represents a compelling 50% premium over both Tagish Lake's closing share price of $0.04 on the TSXV on July 2, 2010 and Tagish Lake's 20-day and year to date VWAPs on the TSXV.

Further:

- the Offer represents a premium of approximately 860% over the offered value that had been approved by the Tagish Lake Board of Directors under the proposed amalgamation in 2009 with YS Mining Company Inc. ("YSM" or "YS Mining"), which valued the Tagish Lake shares at $0.00625 per share. That proposed amalgamation did not receive approval from TSXV and was subsequently terminated by YSM (see Tagish Lake press releases of April 2, May 19, June 12, July 2, August 11 & 19, 2009)

- the Offer also represents a superior alternative to Tagish Lake management's submission to the Supreme Court of British Columbia in the CCAA action that the asset value of the Company is less than its $7.4 million debt.

Offer to Secured Creditors

New Pacific is offering to pay Secured Creditors 100% of their proven claim amounts in cash. Secured Creditors who accept the offer will be paid regardless of the outcome of the takeover bid.

Offer to Unsecured Creditors

New Pacific is offering to pay Unsecured Creditors 100% of the value of their debt on the books of the Company, subject to the minimum tender condition under the takeover bid being satisfied and New Pacific taking up and paying for Tagish Lake shares tendered to the Offer.

Additional Details of the Offer

Full details of the Offer and the offer to the Secured Creditors and Unsecured Creditors will be contained in a formal offer and take-over bid circular to be filed with securities regulatory authorities and mailed to Tagish Lake shareholders and creditors. New Pacific has formally requested a list of Tagish Lake shareholders and expects to formally launch its Offer as soon as practicable following receipt of the Tagish Lake shareholder list. The Offer will remain open for at least 35 days following the commencement of the Offer. Copies of the Offer, offering circular and related documents will also be made available under New Pacific's filings on the SEDAR system: www.sedar.com.

The Offer, and the offer to Unsecured Creditors will be 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.

New Pacific holds, through a wholly owned subsidiary, 14,300,000 shares of Tagish Lake acquired at prevailing prices through the facilities of the TSXV, representing 9.9% of the current issued and outstanding capital of Tagish Lake.

This press release does not constitute an offer to buy or an invitation to sell, or the solicitation of an offer to buy or invitation to sell, any of the securities of New Pacific or Tagish Lake. Such an offer may only be made pursuant to an offer and take-over bid circular filed with the securities regulatory authorities in Canada.

Background to the Offer

Due to threats from secured creditors to seize the Company's assets, Tagish Lake sought, and is currently under Court protection from creditors pursuant to, an Order of the Supreme Court of British Columbia, under the CCAA granted April 9, 2010, as extended and amended by a Claims Process Order on May 7, 2010. See Tagish Lake press releases of April 12, May 6, and May 17, 2010.

Prior to announcing this Offer, New Pacific made a written proposal to the Board of Tagish Lake offering to immediately pay off and take an assignment of any outstanding secured loans and to agree not to enforce any security for at least one year, in conjunction with a friendly acquisition of Tagish Lake at $0.06 per common share, pursuant to a statutory Plan of Arrangement. On July 4, 2010, New Pacific received a response from the CEO of Tagish Lake advising that the board was prepared to discuss the proposal, but was unable to convene a board meeting to consider the matter until Tuesday July 6, 2010. New Pacific looks forward to hearing from the Tagish Lake board.

While New Pacific would much prefer to negotiate a friendly transaction with Tagish Lake, New Pacific is of the view that its proposal to Tagish Lake is material information that must be disclosed to the market. There is no certainty that a negotiated transaction on acceptable terms can be reached.

Should New Pacific be successful in its proposed offer, a priority will be to call an annual general meeting to elect directors, as the last shareholder meeting was held in March 2007.

New Pacific has secured a letter of credit in the amount of up to $10,000,000 with a shareholder of New Pacific. The letter of credit will bear interest at the Bank of Montreal prime rate plus 7% per annum, and New Pacific must pay an establishment fee of up to $350,000.

About New Pacific Metals Corp.

New Pacific is engaged in the exploration and development of mineral resources, gold-poly-metallic projects in China and other jurisdictions. New Pacific has extensive experience in implementing high grade resource development projects. For more information about New Pacific, visit the company's website at www.newpacificmetals.com.


For Further Information:
New Pacific Metals Corp.
Investor Relations
Phone: +1 (604) 633-1368
Fax: +1 (604) 669-9387
Email: info@newpacificmetals.com
Website: www.newpacificmetals.com

Forward Looking Information

This news release may contain forward looking statements, being statements which are not historical facts, including, without limitation, statements regarding the proposed acquisition of Tagish Lake common shares by New Pacific, the offer to pay out the secured and unsecured creditors ,and discussion of future plans and objectives. There can be no assurance that such statements will prove accurate. Such statements are necessarily based on a number of estimates and assumptions that are subject to numerous risks and uncertainties that could cause actual results and future events to differ materially from those anticipated or projected. New Pacific Metals disclaims any intention or obligations to revise or update such statements. The following factors, among others, could cause actual results or developments to differ materially from the results or developments expressed or implied by forward looking statements: New Pacific cannot determine the number of Tagish Lake shareholders who may accept New Pacific's Offer; New Pacific may not succeed in acquiring 66 2/3% of the outstanding Tagish Lake shares (on a fully-diluted basis); If the Offer is successful, New Pacific may not be successful in assisting Tagish Lake to obtain, and Tagish Lake may not obtain, the regulatory and other approvals and financing required to develop the Skukum Mineral District; Tagish Lake may not be successful in developing the Skukum Mineral District.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of the release.