August 19, 2011

Mediterranean Resources Comments On Hydroelectric Development In Its Region In Turkey

Vancouver, B.C., Mediterranean Resources Ltd. (TSX: MNR; Frankfurt: MHM1 ) ("Mediterranean") wishes to comment upon the evolution of various hydroelectric projects in the part of north-east Turkey where Mediterranean's Yusufeli project is located.

While nothing has occurred to our knowledge with the advancement of the Yusufeli Dam, it has been noted that work has begun on the Arkun Baraji (Dam) several kilometres upstream from the proposed Corak minesite. The Arkun dam can be seen at the far left of the map below –

The only other proposed dam on this map that has reached construction stage is the Deriner Dam (at the top right in red).

The Arkun Dam is a potential boon to Mediterranean's project as the 222 MW hydroelectric power station associated with this dam is being constructed right in front of the proposed minesite (to be fed water from upstream via a tunnel). This is a very positive development for the proposed mine as it significantly lowers the Capex on power infrastructure at the mine. In addition it brings the prospect of the lower electric cost inputs that hydro-power affords.

The dams (existing and proposed) on the Coruh River date back to a plan first propagated in the early 1960s. From the chart that follows one can note only the lowest two dams on the river have reaching functioning status, while only the Deriner Dam is advanced and the Arkun Dam has just started earthworks. Interestingly the Arkun Dam has leapfrogged up the timetable. As is well known, the Yusufeli Dam, which would border our proposed minesite, is the most problematical of the dams requiring extensive relocation of settlements and their populations, particularly the historic town of Yusufeli. 

The cost of industrial electricity (not specifically hydro) in Turkey is currently about 0.25 TL per kwh (US 15c per kwh).  According to recent articles in the Turkish press, the specific trade cost of hydro-power from the Turkish electricity generation company to the Turkish electric distribution company is a lot less than this (0.06 TL per kwh).  This presents the opportunity for the Yusufeli project to exploit these substantially lower electricity rates from hydroelectric facilities in very close proximity to the proposed milling facility at Corak.

Signed on behalf of the Board of Directors

For further information please contact:

Christopher Ecclestone
Chief Executive Officer
604-669-3397
www.medresources.ca

Neither Toronto Stock Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Toronto Stock Exchange) accepts responsibility for the adequacy or accuracy of this release. This news release shall not constitute an offer to sell or the solicitation of an offer to buy securities of the Company in any jurisdiction. The securities to be issued pursuant to the Unit Offering by the Company have not and will not be registered under the United States Securities Act of 1933, as amended (the "1933 Act"), or the securities laws of any state of the United States, and may not be offered or sold in the United States absent registration or an applicable exemption therefrom under the 1933 Act and the securities laws of all applicable states.

Certain information set out in this News Release constitutes forward-looking information, which may include information relating to estimates of sales and revenue of MNR. Forward-looking statements (often, but not always, identified by the use of words such as "expect", "may", "could", "anticipate" or "will" and similar expressions) may describe expectations, opinions or guidance that are not statements of fact and which may be based upon information provided by third parties. Forward-looking statements are based upon the opinions, expectations and estimates of management of the Company as at the date the statements are made and are subject to a variety of known and unknown risks and uncertainties and other factors that could cause actual events or outcomes to differ materially from those anticipated or implied by such forward-looking statements. Those factors include, but are not limited to risks, uncertainties and other factors that are beyond the control of the Company, risks associated with the industry in general, commodity prices and exchange rate changes, operational risks associated with exploration, development and production operations, delays or changes in plans, risks associated with the uncertainty of reserve estimates, health and safety risks and the uncertainty of estimates and projections of production, costs and expenses. In light of the risks and uncertainties associated with forward-looking statements, readers are cautioned not to place undue reliance upon forward-looking information. Although the Company believes that the expectations reflected in the forward-looking statements set out in this press release or incorporated herein by reference are reasonable, it can give no assurance that such expectations will prove to have been correct. The forward-looking statements of the Company contained in this press release, or incorporated herein by reference, are expressly qualified, in their entirety, by this cautionary statement.