---

PACIFIC RIM MINING CORP.

(an exploration stage enterprise) CONSOLIDATED FINANCIAL
STATEMENTS

APRIL 30, 2009 and 2008

Expressed in US Funds

- 1 -

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MANAGEMENTS RESPONSIBILITY FOR FINANCIAL
REPORTING

Management is responsible for the integrity and fair
presentation of the financial information contained in this annual report. Where
appropriate, the financial information, including financial statements, reflects
amounts based the best estimates and judgments of management. The financial
statements have been prepared in accordance with accounting principles generally
accepted in Canada and reconciled to accounting principles generally accepted in
the United States as set out in note 14.

Management is responsible for establishing and maintaining
adequate internal control over financial reporting. Any system of internal
control over financial reporting, no matter how well designed, has inherent
limitations. Therefore, even those systems determined to be effective can
provide only reasonable assurance with respect to financial statement
preparation and presentation. Management has a process in place to evaluate
internal control over financial reporting based on the criteria established by
the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in
Internal Control  Integrated Framework.

The Board of Directors oversees managements responsibility for
financial reporting and internal control systems through an Audit Committee,
which is composed entirely of independent directors. The Audit Committee reviews
the financial statements and recommends their approval to the Board of
Directors. The Companys independent auditors have full access to the Audit
Committee, with and without management being present. The Audit Committee meets
periodically with management and the independent auditors to review the
financial statements and related financial reporting and internal control
matters before the financial statements are approved by the Board of Directors
and submitted to the shareholders.

Management has assessed the effectiveness of the Companys
internal control over financial reporting as at April 30, 2009. The Company has
changed its internal controls over financial reporting during the twelve months
ended April 30, 2009 that has materially affected, or is reasonably likely to
materially affect, its control over disclosures. Based on our assessment,
management has concluded that, as at April 30, 2009, the Companys internal
control over financial reporting was not effective due to the existence of a
material weakness. A material weakness existed in the design of internal control
over financial reporting caused by a lack of adequate segregation of duties in
the financial close process. The Chief Financial Officer is responsible for
preparing, authorizing, and reviewing information that is key to the preparation
of financial reports. He is also responsible for preparing and reviewing the
resulting financial reports. This weakness has the potential to result in
material misstatements in the Companys financial statements, and should also be
considered a material weakness in its disclosure controls and procedures.

Management has concluded, and the audit committee has agreed
that taking into account the present stage of the Company/s development, the
Company does not have sufficient size and scale to warrant the hiring of
additional staff to correct the weakness at this time.

The effectiveness of the Companys internal control over
financial reporting has not been audited by the independent auditors as it was
not a legal requirement for the year ended April 30, 2009.

PricewaterhouseCoopers LLP, our independent auditors, appointed
by the shareholders, have audited our financial statements in accordance with
Canadian generally accepted auditing standards their report follows.



|Steve Krause          | Thomas C. Shrake     
|----------------------- | -----------------------
|                        |                        
|Steve Krause            | Thomas C. Shrake       
|Chief Financial Officer | Chief Executive Officer
|Vancouver, Canada       | Vancouver, Canada      
|July 22, 2009           | July 22, 2009          

- 2 -

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PricewaterhouseCoopers LLPChartered AccountantsPricewaterhouseCoopers PlaceIndependent Auditors Report
      
      250 Howe Street, Suite 700Vancouver, British ColumbiaCanada V6C 3S7To the Shareholders of Pacific Rim Mining Corp.
      
      Telephone +1 604 806 7000Facsimile +1 604 806 7806


We have audited the accompanying consolidated balance sheets of
Pacific Rim Mining Corp. as at April 30, 2009 and April 30, 2008, and the
related consolidated statements of loss, shareholders equity, cash flows and
comprehensive loss for each of the years in the three year period ended April
30, 2009. These financial statements are the responsibility of the Companys
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits of the Companys consolidated financial
statements in accordance with Canadian generally accepted auditing standards and
the standards of the Public Company Accounting Oversight Board (United States).
Those standards require that we plan and perform an audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit of financial statements includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. A financial statement audit also includes assessing the accounting
principles used and significant estimates made by management, and evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred
to above present fairly, in all material respects, the financial position of the
Company as at April 30, 2009 and April 30, 2008 and the results of its
operations and its cash flows for each of the years in the three year period
ended April 30, 2009 in accordance with Canadian generally accepted accounting
principles.

PricewaterhouseCoopers LLP

Chartered AccountantsVancouver, BC, Canada
  July 22, 2009



Comments by Auditor for U.S. Readers on Canada-U.S Reporting
Difference

In the United States, reporting standards for auditors require
the addition of an explanatory paragraph (following the opinion paragraph) where
there are events that cast substantial doubt on the Companys ability to
continue as a going concern, such as those described in note 1 to the
consolidated financial statements. Our report to the shareholders dated July 22,
2009 is expressed in accordance with Canadian reporting requirements which do
not permit a reference to such events and conditions in the auditors report
when they are properly accounted for and adequately disclosed in the financial
statements.

PricewaterhouseCoopers LLP

Chartered AccountantsVancouver, BC, CanadaJuly
22, 2009



PricewaterhouseCoopers refers to PricewaterhouseCoopers
  LLP, an Ontario limited liability partnership, or, as the context requires,
  the PricewaterhouseCoopers global network or other member firms of the network,
  each of which is a separate and independent legal entity.

---

Pacific Rim Mining Corp.Consolidated Balance SheetsAs at April 30In thousands of U.S. Dollars

|ASSETS                                                   |   | 2009    |   |   | 2008    |  
|-------------------------------------------------------- | - | ------- | - | - | ------- | -
|Current Assets                                           |   |         |   |   |         |  
|                                                         |   |         |   |   |         |  
|Cash and
      cash equivalents                          | $ | 1,284   |   | $ | 1,922   |  
|Short-term investments                                   |   | -       |   |   | 4,232   |  
|Bullion
      (Note 3)                                   |   | 1,225   |   |   | -       |  
|Current portion of
      discontinued operation (Note 6) |   | -       |   |   | 1,290   |  
|Receivables, deposits and prepaids                       |   | 106     |   |   | 222     |  
|                                                         |   | 2,615   |   |   | 7,666   |  
|                                                         |   |         |   |   |         |  
|Property, Plant and Equipment(Note 4)                    |   | 5,551   |   |   | 5,620   |  
|Restricted Cash(Note 5)                                  |   | 21      |   |   | 24      |  
|Discontinued Operation(Note 6)                           |   | -       |   |   | 4,960   |  
|                                                         | $ | 8,187   |   | $ | 18,270  |  
|                                                         |   |         |   |   |         |  
|LIABILITIES                                              |   |         |   |   |         |  
|Current Liabilities                                      |   |         |   |   |         |  
|Accounts payable
      and accrued liabilities           | $ | 633     |   | $ | 1,370   |  
|Discontinued operation (Note
      6)                    |   | -       |   |   | 1,573   |  
|                                                         |   | 633     |   |   | 2,943   |  
|                                                         |   |         |   |   |         |  
|Future Income Tax Liability(Note
      11)               |   | 1,046   |   |   | 1,046   |  
|Discontinued Operation(Note 6)                           |   | -       |   |   | 2,120   |  
|                                                         |   | 1,679   |   |   | 6,109   |  
|SHAREHOLDERS
      EQUITY                               |   |         |   |   |         |  
|Share Capital(Note 7)                                    |   |         |   |   |         |  
|Authorized:                                              |   |         |   |   |         |  
|unlimited common shares without par value                |   |         |   |   |         |  
|Issued and fully paid:                                   |   |         |   |   |         |  
|118,033,642 shares outstanding (2008 - 116,915,460)      |   | 82,914  |   |   | 82,649  |  
|Contributed Surplus                                      |   | 4,725   |   |   | 4,170   |  
|Accumulated Other Comprehensive Income                   |   | -       |   |   | 197     |  
|Deficit                                                  |   | (81,131 | ) |   | (74,855 | )
|                                                         |   | 6,508   |   |   | 12,161  |  
|                                                         | $ | 8,187   |   | $ | 18,270  |  
|Going Concern(Note 1)                                    |   |         |   |   |         |  
|Measurement Uncertainty(Note 4 (a))                      |   |         |   |   |         |  
|Contingency(Note 4 (a))                                  |   |         |   |   |         |  
|Commitments(Note 12)                                     |   |         |   |   |         |  

APPROVED BY THE BOARD OF DIRECTORS:

|Thomas C.
      Shrake | Director
|------------------------ | --------
|Paul Sweeney           | Director

- The accompanying notes are an integral part of these
consolidated financial statements -

- 1 -

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Pacific Rim Mining Corp.Consolidated Statements of LossFor the year
ended April 30In thousands of U.S. Dollars, except for per
share amounts

|                                           |   | 2009    |   |   | 2008    |   |   | 2007    |  
|------------------------------------------ | - | ------- | - | - | ------- | - | - | ------- | -
|                                           |   |         |   |   |         |   |   |         |  
|                                           |   |         |   |   |         |   |   |         |  
|Expenses (Income)                          |   |         |   |   |         |   |   |         |  
|Exploration                                |   |         |   |   |         |   |   |         |  
|- direct                                   | $ | 5,298   |   | $ | 11,398  |   | $ | 10,401  |  
|- stock-based compensation
      (Note 7)  |   | 240     |   |   | 372     |   |   | 263     |  
|General and administrative                 |   |         |   |   |         |   |   |         |  
|- direct                                   |   | 3,409   |   |   | 2,894   |   |   | 2,346   |  
|- stock-based
      compensation (Note 7)  |   | 315     |   |   | 622     |   |   | 705     |  
|Foreign exchange loss (gain)               |   | 240     |   |   | (438    | ) |   | 86      |  
|Interest income                            |   | (59     | ) |   | (237    | ) |   | (475    | )
|Loss Before Taxes and Discontinued         |   |         |   |   |         |   |   |         |  
|Operations                                 |   | (9,443  | ) |   | (14,611 | ) |   | (13,326 | )
|                                           |   |         |   |   |         |   |   |         |  
|Income Taxes(Note 11)                      |   | -       |   |   | (1,046  | ) |   | -       |  
|                                           |   |         |   |   |         |   |   |         |  
|Loss Before Discontinued Operations        |   | (9,443  | ) |   | (15,657 | ) |   | (13,326 | )
|                                           |   |         |   |   |         |   |   |         |  
|Discontinued Operation  Net Income of     |   |         |   |   |         |   |   |         |  
|Denton-Rawhide Joint Venture(Note          |   |         |   |   |         |   |   |         |  
|6(a))                                      |   | 3,167   |   |   | 1,523   |   |   | 2,909   |  
|                                           |   |         |   |   |         |   |   |         |  
|Discontinued Operation -
      Recovery of |   |         |   |   |         |   |   |         |  
|Investment In Andacollo Mine(Note          |   |         |   |   |         |   |   |         |  
|6(b))                                      |   | -       |   |   | 1,400   |   |   | 1,000   |  
|                                           |   |         |   |   |         |   |   |         |  
|Loss for the Year                          | $ | (6,276  | ) | $ | (12,734 | ) | $ | (9,417  | )
|                                           |   |         |   |   |         |   |   |         |  
|Loss Per Share From Continued              |   |         |   |   |         |   |   |         |  
|Operations
      - Basic and Diluted       | $ | (0.08   | ) | $ | (0.13   | ) | $ | (0.12   | )
|                                           |   |         |   |   |         |   |   |         |  
|Loss Per Share After Discontinued          |   |         |   |   |         |   |   |         |  
|Operations - Basic and Diluted             | $ | (0.05   | ) | $ | (0.11   | ) | $ | (0.09   | )
|                                           |   |         |   |   |         |   |   |         |  
|Weighted average shares outstanding        |   |         |   |   |         |   |   |         |  
|during year
      (thousands)              |   | 117,151 |   |   | 111,123 |   |   | 106,939 |  

- The accompanying notes are an integral part of these
consolidated financial statements -

- 2 -

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Pacific Rim Mining Corp.Consolidated Statements of Shareholders EquityIn thousands of U.S. Dollars

AccumulatedShare Capital
      
      
      Contributed
      
      
      Other
      
      
      Accumulated
      
      
      TotalCommon Shares
      
      
      Surplus
      
      
      Comprehensive
      
      
      DeficitIncomeNumber
      
      
      $
      
      
      $
      
      
      $
      
      
      $
      
      
      $Balance  April 30, 2006
      
      105,590,960
      
      
      74,178
      
      
      1,181
      
      
      -
      
      
      (52,704
      )
      
      22,655Shares issued for cash - optionsexercised
      
      2,644,000
      
      
      1,208
      
      
      -
      
      
      -
      
      
      -
      
      
      1,208Shares issued for cash warrants exercised
      
      1,195,000
      
      
      862
      
      
      -
      
      
      -
      
      
      -
      
      
      862Shares issued for services
      
      152,000
      
      
      111
      
      
      -
      
      
      -
      
      
      -
      
      
      111Shares issued for property optionpayment (Note 4(b))
      
      200,000
      
      
      199
      
      
      -
      
      
      -
      
      
      -
      
      
      199Fair value of warrants exercised
      
      -
      
      
      168
      
      
      (168
      )
      
      -
      
      
      -
      
      
      -Fair value of options exercised
      
      -
      
      
      39
      
      
      (39
      )
      
      -
      
      
      -
      
      
      -Warrants issued for propertyoption payment
      
      -
      
      
      -
      
      
      51
      
      
      -
      
      
      -
      
      
      51Stock-based compensation
      
      -
      
      
      -
      
      
      968
      
      
      -
      
      
      -
      
      
      968Loss for the year
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      (9,417
      )
      
      (9,417
      )Balance  April 30, 2007
      
      109,781,960
      
      
      76,765
      
      
      1,993
      
      
      -
      
      
      (62,121
      )
      
      16,637Adoption of new accountingstandards
      
      -
      
      
      -
      
      
      -
      
      
      77
      
      
      -
      
      
      77Stock-based compensation
      
      -
      
      
      -
      
      
      994
      
      
      -
      
      
      -
      
      
      994Fair value of optionsexercised
      
      -
      
      
      139
      
      
      (139
      )
      
      -
      
      
      -
      
      
      -Shares issued for cash- options exercised
      
      282,500
      
      
      216
      
      
      -
      
      
      -
      
      
      -
      
      
      216Shares issued for cash,net of cost
      
      6,711,000
      
      
      5,496
      
      
      1,204
      
      
      -
      
      
      -
      
      
      6,700Shares issued for propertyoption payment
      
      140,000
      
      
      151
      
      
      
      
      
      -
      
      
      -
      
      
      151Warrants issue costs
      
      -
      
      
      (118
      )
      
      118
      
      
      -
      
      
      -
      
      
      -Unrealized gain on financialassets classified as available
      
      -
      
      
      -
      
      
      -
      
      
      120
      
      
      -
      
      
      120for saleLoss for the year
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      (12,734
      )
      
      (12,734
      )Balance  April 30, 2008
      
      116,915,460
      
      
      82,649
      
      
      4,170
      
      
      197
      
      
      (74,855
      )
      
      12,161Stock-based compensation
      
      -
      
      
      -
      
      
      555
      
      
      -
      
      
      -
      
      
      555Disposal of Denton-RawhideJoint Venture (Note 5)
      
      -
      
      
      -
      
      
      -
      
      
      (197
      )
      
      -
      
      
      (197
      )Shares issued for propertyoption payment
      
      1,118,182
      
      
      265
      
      
      -
      
      
      -
      
      
      -
      
      
      265Loss for the year
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      (6,276
      )
      
      (6,276
      )Balance  April 30, 2009
      
      118,033,642
      
      
      82,914
      
      
      4,725
      
      
      -
      
      
      (81,131
      )
      
      6,508


- The accompanying notes are an integral part of these
consolidated financial statements -

- 3 -

---

Pacific Rim Mining Corp.Consolidated Statements of Cash FlowsFor the
year ended April 30In thousands of U.S. Dollars(unaudited)

|                                                            |   | 2009   |   |   | 2008    |   |   | 2007    |  
|----------------------------------------------------------- | - | ------ | - | - | ------- | - | - | ------- | -
|Operating Activities                                        |   |        |   |   |         |   |   |         |  
|Loss for the year from
      continuing operations          | $ | (9,443 | ) | $ | (15,657 | ) | $ | (13,326 | )
|Items not affecting cash:                                   |   |        |   |   |         |   |   |         |  
|Depletion,
      depreciation and amortization              |   | 73     |   |   | 58      |   |   | 13      |  
|Stock-based compensation                                    |   | 555    |   |   | 994     |   |   | 968     |  
|Loss on disposal
      of capital assets                    |   | 2      |   |   | -       |   |   | -       |  
|Shares issued for property
      option payment             |   | 265    |   |   | 151     |   |   | 199     |  
|Future income
      tax                                     |   | -      |   |   | 1,046   |   |   | -       |  
|Warrants issued for property
      option payment           |   | -      |   |   | -       |   |   | 51      |  
|Shares issued
      for services                            |   | -      |   |   | -       |   |   | 111     |  
|                                                            |   | (8,548 | ) |   | (13,408 | ) |   | (11,984 | )
|Changes in non-cash working
      capital:                  |   |        |   |   |         |   |   |         |  
|Accounts payable and accrued
      liabilities              |   | (736   | ) |   | 429     |   |   | 482     |  
|Receivables,
      deposits and prepaids                    |   | 116    |   |   | 43      |   |   | (94     | )
|Cash Flow Used for Operating Activities                     |   | (9,168 | ) |   | (12,936 | ) |   | (11,596 | )
|Investing Activities                                        |   |        |   |   |         |   |   |         |  
|Net proceeds from short term investments
      redemption   |   | 4,232  |   |   | 3,779   |   |   | 6,683   |  
|Purchase of property, plant
      and equipment             |   | (7     | ) |   | (1,180  | ) |   | (309    | )
|Decrease (Increase) in restricted cash                      |   | 3      |   |   | -       |   |   | (24     | )
|Proceeds from sale of
      discontinued operation (Note 6) |   | 1,818  |   |   | 1,400   |   |   | 1,000   |  
|Cash Flow Provided By Investing Activities                  |   | 6,046  |   |   | 3,999   |   |   | 7,350   |  
|Financing Activities                                        |   |        |   |   |         |   |   |         |  
|Shares issued for cash, net of issuance cost                |   | -      |   |   | 6,916   |   |   | 2,065   |  
|Cash Flow Provided By Financing
      Activities            |   | -      |   |   | 6,916   |   |   | 2,065   |  
|                                                            |   |        |   |   |         |   |   |         |  
|Cash flows from continuing operations                       |   | (3,122 | ) |   | (2,021  | ) |   | (2,181  | )
|                                                            |   |        |   |   |         |   |   |         |  
|Cash flows from discontinued operations(Note 6)             |   | 2,484  |   |   | 1,459   |   |   | 2,908   |  
|                                                            |   |        |   |   |         |   |   |         |  
|Change in Cash and Cash Equivalents                         |   | (638   | ) |   | (562    | ) |   | 727     |  
|                                                            |   |        |   |   |         |   |   |         |  
|Cash and cash equivalents -
      Beginning of year         |   | 1,922  |   |   | 2,484   |   |   | 1,757   |  
|                                                            |   |        |   |   |         |   |   |         |  
|Cash and Cash Equivalents - End of Year                     | $ | 1,284  |   | $ | 1,922   |   | $ | 2,484   |  
|                                                            |   |        |   |   |         |   |   |         |  
|Supplemental Schedule of Non-Cash
      Transactions        |   |        |   |   |         |   |   |         |  
|                                                            |   |        |   |   |         |   |   |         |  
|Bullion received                                            | $ | 1,686  |   | $ | -       |   |   | -       |  

- The accompanying notes are an integral part of these
consolidated financial statements -

- 4 -

---

Pacific Rim Mining Corp.Consolidated Statements of Comprehensive LossFor
the Year Ended April 30In thousands of U.S. Dollars(unaudited)

|                                                     |   | 2009   |   |   | 2008    |   |   | 2007   |  
|---------------------------------------------------- | - | ------ | - | - | ------- | - | - | ------ | -
|                                                     |   |        |   |   |         |   |   |        |  
|Net Loss for the Year                                | $ | (6,276 | ) | $ | (12,734 | ) | $ | (9,417 | )
|Other comprehensive income                           |   |        |   |   |         |   |   |        |  
|Unrealized loss on investments available for sale    |   | -      |   |   | 120     |   |   | 77     |  
|Disposal of
      Denton-Rawhide Joint Venture (Note |   |        |   |   |         |   |   |        |  
|6(a))                                                |   | (197   | ) |   | -       |   |   | -      |  
|                                                     |   |        |   |   |         |   |   |        |  
|Comprehensive Loss for the Year                      | $ | (6,473 | ) | $ | (12,614 | ) | $ | (9,340 | )

- The accompanying notes are an integral part of these
consolidated financial statements -

- 5 -

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|Pacific Rim Mining Corp.                                    
|------------------------------------------------------------
|Notes to Consolidated Financial
      Statements            
|April 30, 2009, 2008, and 2007                              
|In thousands of U.S. Dollars, except per share
      amounts
|                                                            

|1. | Nature of Operations, Going Concern and Basis of
      Presentation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | The Company is involved in the exploration and
      development of gold properties. The Company owns a 100% interest in
      certain mineral properties, known as El Dorado, located in El Salvador and
      carries out exploration activities in Costa Rica and Guatemala. During the
      second quarter, the Company sold its 49% interest in the Denton-Rawhide
      mine, located near Fallon, Nevada, U.S.A. (Note 5).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | The Company has not yet confirmed whether any of its
      exploration properties contain mineral deposits that are economically
      recoverable. The recoverability of any amounts capitalized for Mining
      Property Acquisition costs in El Salvador is dependent upon the existence
      of economically recoverable mineral deposits, the ability of the Company
      to obtain the necessary financing and permitting to complete the
      exploration and development of its exploration properties, and upon future
      profitable production or proceeds from the disposition of its
      properties.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | Going Concern                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | During the year ended April 30, 2009, the Company
      incurred a loss of $9,443 (2008  $15,657) before discontinued operations
      and as at April 30, 2009 has an accumulated deficit of $81,131 (2008 -
      $74,855). The Company will require additional funding to maintain its
      ongoing exploration programs and property commitments as well as for
      administrative purposes and CAFTA arbitration and negotiation (Note
      4(a)).These conditions and risks cast substantial doubt on the
      validity of the going concern assumption.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | The Companys ability to continue operations and
      exploration activities as a going concern is dependent upon its ability to
      obtain additional funding. The Company will need to raise sufficient fund
      to fund ongoing exploration and administration expenses as well as its
      costs under its CAFTA arbitration. While the Company has been successful
      in obtaining its required funding in the past, there is no assurance that
      sufficient funds will be available to the Company in the future. The
      Company has no assurance that such financing will be available or be
      available on favourable terms. Factors that could affect the availability
      of financing include the progress and results of the El Dorado project and
      its permitting application, the resolution of international arbitration
      proceedings over the non-issuance of permits in El Salvador, the state of
      international debt and equity markets, investor perceptions and
      expectations and the global financial and metals markets. The Company will
      have to obtain additional financing through, but not limited to, the
      issuance of additional equity.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | These consolidated financial statements do not reflect
      adjustments in the carrying values of the assets and liabilities, the
      reported revenues and expenses, and the balance sheet classifications
      used, that would be necessary if the company were unable to realize its
      assets and settle its liabilities in the normal course of operations. Such
      adjustments could be material.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|2. | Significant Accounting Policies and Changes in
      Accounting Policies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | a) Consolidation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | These consolidated financial statements are presented in
      accordance with generally accepted accounting principles (GAAP)
      applicable in Canada and have been reconciled as to significant
      differences in measurement to generally accepted accounting principles
      applicable in the United States as disclosed in Note 14.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | These consolidated financial statements include the
      accounts of the Companys wholly-owned active subsidiaries, Dayton Mining
      (U.S.) Inc., Pacific Rim Exploration Inc., Pacific Rim Cayman, Pacific Rim
      El Salvador S.A. de C.V., Dorado Exploraciones S.A. de C.V., Pac Rim
      Caribe III and its wholly- owned subsidiaries International Pacific Rim
      S.A and Pacific Rim Chile Limitada.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

- 6 -

---

|Pacific Rim Mining Corp.                              
|------------------------------------------------------
|Notes to Consolidated Financial Statements            
|April 30, 2009, 2008, and 2007                        
|In thousands of U.S. Dollars, except per share amounts
|                                                      

b) Cash and Cash Equivalents

Cash and cash equivalents consist of
cash on deposit with banks and short-term interest-bearing investments with
maturities of three months or less at the purchase date. Cash equivalents are
designated as held for trading and are recorded at fair value with unrealized
gains and losses recorded in other comprehensive income.

c) Short Term Investments

Short term investments are comprised of
interest-bearing deposits with a term to maturity from inception of greater than
three months and less than one year. These investments are designated as held
for trading and are recorded at fair value with unrealized gains and losses
recorded in other comprehensive income.

d) Bullion

Holdings of gold and silver bullion are
valued the lesser of cost when received or net realizable value.

e) Property, Plant and
Equipment

Property, plant and equipment are
stated at cost as at the date of acquisition less accumulated depreciation and
accumulated write-downs. The Company provides for amortization on equipment
using the straight-line method over their useful lives as follows:

Office furniture and equipment
    1-5 yearsComputer equipment
    2-5 yearsComputer software
    2-5 years


f) Mineral Properties

The Company is in the process of
exploring its mineral properties. All exploration expenditures are expensed as
incurred. Property acquisition payments for active exploration properties are
capitalized. If no mineable ore body is discovered, previously capitalized costs
are expensed in the period the property is abandoned, sold or determined to be
impaired.

Management reviews and evaluates the
carrying value of its mineral properties for impairment when events or changes
in circumstances indicate that the carrying amount of the related asset may not
be recoverable. If the total estimated future operating cash flows on an
undiscounted basis are less than the carrying amount of the asset, an impairment
loss is recognized and assets are written down to fair value which is normally
determined using the discounted value of future cash flows. Where estimates of
future net cash flows are not available and where other conditions suggest
impairment, management assesses whether carrying value can be recovered by
considering alternative methods of determining fair value. When it is determined
that a mineral property is impaired it is written down to its estimated fair
value.

Ownership in mineral properties
involves certain interest risks due to the difficulties of determining and
obtaining clear title to claims as well as the potential for problems arising
from the frequently ambiguous conveyance history characteristics of many mineral
properties. The Company has investigated ownership of its mineral properties
and, to the best of its knowledge, ownership of its interests are in good
standing.

- 7 -

---

|Pacific Rim Mining Corp.                              
|------------------------------------------------------
|Notes to Consolidated Financial Statements            
|April 30, 2009, 2008, and 2007                        
|In thousands of U.S. Dollars, except per share amounts
|                                                      

g) Asset Impairment

Reviews are undertaken to evaluate the
carrying values of property, plant and equipment and mineral properties when
events or changes in circumstances indicate that carrying values may not be
recoverable. When information is available and conditions suggest a potential
impairment, estimated future net cash flows for the mine or property are
calculated using estimated future prices, mineral resources and operating,
capital and reclamation costs on an undiscounted basis. When estimated future
cash flows are less than the carrying value, the project is considered impaired.
Reductions in the carrying value of the mine or property are recorded to the
extent the net book value exceeds fair value, estimated using the discounted
future cash flows, through a charge to earnings.

h) Asset Retirement
Obligations

The Company recognizes asset retirement
obligations at fair value in the period in which the liability is incurred. Fair
value is determined based on the estimated future cash flows required to settle
the liability discounted at the Companys credit adjusted risk free interest
rate. The liability is adjusted for changes in the expected amounts and timing
of cash flows required to discharge the liability and accreted over time to its
full value. The associated asset retirement costs are capitalized as part of the
carrying amount of the related long-lived asset and amortized over the expected
useful life of the asset.

i) Income Taxes

Current income taxes are recorded based
on estimated income taxes payable for the current year. Future income tax assets
and liabilities are recognized for temporary differences between the tax and
accounting bases for assets and liabilities using substantively enacted tax
rates for the periods in which the differences are expected to reverse. The
amount of future income tax assets recognized is limited to the amount that is
more likely than not to be realized.

j) Share Capital

Share capital issued as non-monetary
consideration is recorded at an amount based on fair market value.

The proceeds from the issue of units is
allocated between common shares and common share purchase warrants on a
pro-rated basis on a relative fair value as follows: the fair value of common
shares is based on the price at market close on the date the units are issued
and the fair value of the common share purchase warrants is determined using a
Black-Scholes pricing model.

k) Stock-based Compensation

All stock-based awards made to
employees and non-employees are measured and recognized using the Black-Scholes
fair value based method. For employees, the Company recognizes stock based
compensation expense based on the estimated fair value of the options on the
date of the grant. For non-employees, the fair value of the options is measured
on the earlier of the date at which the counterparty performance is complete or
the date the performance commitment is reached or the date at which the equity
instruments are granted if they are fully vested and non-forfeitable. The fair
value of the options is recognized over the vesting period of the options
granted as stock based compensation expense and corresponding adjustment to
contributed surplus. Upon exercise these amounts are transferred to share
capital.

l) Revenue Recognition

Revenues from the sale of all precious
metal bullion are recognized when delivery has occurred, title to the bullion
has passed to the buyer, evidence of an arrangement exists, the selling price is
fixed or determinable, and collection is reasonably assured.

- 8 -

---

|Pacific Rim Mining Corp.                              
|------------------------------------------------------
|Notes to Consolidated Financial Statements            
|April 30, 2009, 2008, and 2007                        
|In thousands of U.S. Dollars, except per share amounts
|                                                      

m) Earnings (Loss) per Share

Basic earnings (loss) per share is
computed by dividing income available to common shareholders by the weighted
average number of common shares outstanding during the period. The dilutive
effect of outstanding options and warrants and their equivalents is reflected in
diluted earnings per share by application of the treasury stock method. In
periods where a loss is incurred, the conversion, exercise or contingent
issuance of securities has not been included in the calculation as increasing
the number of shares outstanding would be anti-dilutive.

n) Derivative Transactions

Derivative financial instruments,
including embedded derivatives, are designated as held-for-trading and recorded
on the balance sheet at fair value with realized and unrealized gains and losses
recorded in net earnings. Fair values for derivative instruments
held-for-trading are determined using valuation techniques. Valuations use
assumptions based on market conditions existing at the balance sheet date.
Realized gains and losses are recorded as a component of operating cash flow.

o) Foreign Currency Translation

The Companys functional and reporting
currency is the United States dollar. Transactions denominated in other
currencies are translated into their United States dollar equivalents at
exchange rates prevailing at the transaction date. Carrying values of monetary
assets and liabilities denominated in foreign currencies are adjusted at each
balance sheet date to reflect exchange rates prevailing at that date.

Integrated foreign operations are
translated into the functional currency using the temporal method as follows:

| | i)   | Monetary assets and liabilities at the rate of exchange
      in effect at the balance sheet date,                                                            
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------
| | ii)  | Non-monetary assets, liabilities and equity at historical
      rates , and                                                                                   
| | iii) | Revenue and expense items at the average rate of exchange
      prevailing during the period, except depreciation which is recorded at
      historical rates.

Gains and losses on translation are
included in determining net income for the period.

p) Use of Estimates

The preparation of financial statements
in conformity with Canadian GAAP requires management to make estimates and
assumptions that affect the reported amounts in these financial statements and
accompanying notes. Significant areas of estimation relate to the assessment of
impairment of mineral claim interests, stock-based compensation, future site
restoration costs, and the future income tax asset valuation allowance. Actual
results could differ from these estimates. By their nature, these estimates are
subject to a degree of uncertainty, and the impact on the financial statements
of future changes in such estimates could be material.

q) Comparative Figures

Certain of the comparative figures have
been reclassified to conform to the current years presentation.

- 9 -

---

|Pacific Rim Mining Corp.                              
|------------------------------------------------------
|Notes to Consolidated Financial Statements            
|April 30, 2009, 2008, and 2007                        
|In thousands of U.S. Dollars, except per share amounts
|                                                      

r) New Accounting Pronouncements

Changes in Accounting
Policies

Going Concern

Effective May 1, 2008, the Company
implemented CICA Handbook Section 1400, which states that financial statements
shall be prepared on a going concern basis unless management either intends to
liquidate the entity or to cease trading, or has no realistic alternative but to
do so. When management is aware, in making its assessment, of material
uncertainties related to events or conditions that may cast significant doubt
upon the entity's ability to continue as a going concern, those uncertainties
shall be disclosed. This section applies to interim and annual financial
statements relating to fiscal years beginning on or after January 1, 2008
(Note 1).

Financial Instruments
Disclosures

Effective May 1, 2008, the Company
adopted CICA Handbook section 3862, Financial Instruments  Disclosure and
section 3863, Financial Instruments  Presentation. These sections require the
Company to provide disclosure to enable users to evaluate the significance of
financial instruments on the Companys financial position and performance, the
nature and extent of risks arising from financial instruments the Company is
exposed to during the reporting period and as at the balance sheet date, and how
the Company is managing those risks. Disclosures required by these standards are
included in Note 9.

Capital Disclosures

Effective May 1, 2008, the Company
adopted CICA Handbook section 1535, Capital Disclosures. This section requires
the Company to provide disclosures to enable users to evaluate the Companys
objectives, policies and processes for managing capital. Disclosures required by
this standard are include in Note 10.

Inventories

Effective May 1, 2008, the Company
adopted CICA Handbook section 3031, Inventories, which replaces section 3030,
Inventories. The new section establishes standards for the measurement and
disclosure of inventories, including the determination of cost and its
subsequent recognition as an expense, including any write-down to net realizable
value. It also provides guidance on the cost formulas that are used to assign
costs to inventories. The adoption of this standard did not have a material
impact on the consolidated financial statements.

Income Statement Presentation of Tax
Loss Carryforwards

Effective May 1, 2008, the Company
adopted EIC-172, Income Statement Presentation of a Tax Loss Carryforward
Recognized Following an Unrealized Gain in Other Comprehensive Income. This
abstract provides guidance on whether the tax benefit from the recognition of
previously unrecognized tax loss carryforwards consequent to the recording of
unrealized gains in other comprehensive income, such as unrealized gains on
available-for-sale financial assets, should be recognized in net income or in
other comprehensive income. The abstract should be applied retrospectively, with
restatement of prior periods from January 1, 2007, the date of adoption of CICA
Handbook Section 3855, Financial Instruments  Recognition and Measurement.
The adoption of this standard did not have a material impact on the consolidated
financial statements.

- 10 -

---

|Pacific Rim Mining Corp.                              
|------------------------------------------------------
|Notes to Consolidated Financial Statements            
|April 30, 2009, 2008, and 2007                        
|In thousands of U.S. Dollars, except per share amounts
|                                                      

|   | Credit risk and fair value of financial assets and
      financial liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | In January 2009, the CICA approved EIC-173 Credit Risk
      and the Fair Value of Financial Assets and Financial Liabilities. This
      guidance clarified that an entitys own credit risk and the credit risk of
      the counterparty should be taken into account in determining the fair
      value of financial assets and financial liabilities including derivative
      instruments. The Company has evaluated the new section and determined that
      adoption of these new requirements did not have a significant impact on
      the Companys consolidated financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | Recent Accounting Pronouncements not yet
      adopted                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | Goodwill and intangible assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | In February 2008, the CICA issued handbook section 3064,
      Goodwill and Intangible Assets, which replaces CICA HB Section 3062,
      Goodwill and Intangible Assets, and CICA HB Section 3450, Research and
      Development Costs, and amendments to Accounting Guideline (AcG) 11,
      Enterprises in the Development Stage, and EIC-27, Revenues and
      Expenditures during the Pre- operating Period and CICA HB Section 1000,
      Financial Statement Concepts. The standard intends to reduce the
      differences with International Financial Reporting Standards (IFRS) in
      the accounting for intangible assets and results in closer alignment with
      U.S. GAAP. The objectives of Section 3064 are to reinforce the
      principle-based approach to the recognition of assets only in accordance
      with the definition of an asset and the criteria for asset recognition;
      and clarify the application of the concept of matching revenues and
      expenses such that the current practice of recognizing assets that do not
      meet the definition and recognition criteria are eliminated. The standard
      will also provide guidance for the recognition of internally developed
      intangible assets (including research and development activities),
      ensuring consistent treatment of all intangible assets, whether separately
      acquired or internally developed.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | This standard will be effective for the Company beginning
      on May 1, 2009. The Company does not expect adoption of this standard to
      have any significant impact on its reported results.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | Business combinations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | In October 2008, the CICA issued Handbook section 1582,
      Business Combinations, which establishes new standards for accounting
      for business combinations. This is effective for business combinations for
      which the acquisition date is on or after the beginning of the first
      annual reporting period beginning on or after May 1, 2011. The impact on
      adoption of this standard is currently being evaluated.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | Non-controlling interest                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | In October 2008, the CICA issued Handbook section 1602,
      Non-controlling Interests, to provide guidance on accounting for
      non-controlling interests subsequent to a business combination. The
      section is effective for fiscal years beginning on or after May 1, 2011.
      The impact on adoption of this standard is currently being
    evaluated.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|3. | Bullion                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

| |                      |   | 2009  |  |   | 2008  | 
| | -------------------- | - | ----- |  | - | ----- | 
| | Bullion              | $ | 1,225 |  | $ | 1,060 | 
| | In-process inventory |   | -     |  |   | 230   | 
| |                      | $ | 1,225 |  | $ | 1,290 | 

- 11 -

---

|Pacific Rim Mining Corp.                              
|------------------------------------------------------
|Notes to Consolidated Financial Statements            
|April 30, 2009, 2008, and 2007                        
|In thousands of U.S. Dollars, except per share amounts
|                                                      

|   | Following the sale of the Denton-Rawhide mine on October
      28, 2008, (Note 5), the Company received 49% of all dore produced and
      shipped from the mine prior to December 31, 2008. This dore has been
      treated as part of proceeds of disposition.
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                  
|   | As at April 30, 2009, the Company had 1,460 ounces of
      gold and 11,974 ounces of silver on hand.                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                  
|4. | Property, Plant and
Equipment                                                                                                                                                                                                                                    

| |                                                 |   | 2009  |   |   | 2008  |  
| | ----------------------------------------------- | - | ----- | - | - | ----- | -
| | Office Equipment and Vehicles                   | $ | 362   |   | $ | 399   |  
| | Accumulated depreciation                        |   | (265  | ) |   | (233  | )
| |                                                 |   | 97    |   |   | 166   |  
| | Mining Property Acquisition Costs  El Salvador |   | 5,454 |   |   | 5,454 |  
| |                                                 | $ | 5,551 |   | $ | 5,620 |  

El Salvador Properties

a) El Dorado

The Company holds a 100% interest in
certain mineral properties in El Salvador known as El Dorado. El Dorado is
subject to a royalty of 3% of net smelter returns in favour of a previous
property owner. Pacific Rim has the right to buy back the royalty for $1 million
for the first 1.5% and $3 million for the second 1.5%, provided that at least
one half of the royalty is acquired within six months of the commencement of
commercial production.

An Environmental Impact Study has been
submitted to governmental authorities for their consideration and requires
approval before the exploration licence can be converted to an exploitation
concession which is required to carry out mining in the licence area.

In meeting its responsibilities, a
mine design for the Companys El Dorado gold project was submitted to the
Government of El Salvador in its final form in October 2006. The issuance of the
permit remains outstanding and consequently the Company has concluded it must
seek a legal remedy to secure its right to develop the El Dorado project.

On April 30, 2009 Pac Rim Cayman LLC,
a Nevada corporation and a wholly-owned subsidiary of Pacific Rim Mining Corp.
(collectively with Pac Rim Cayman LLC, Pacific Rim or the Company), filed
international arbitration proceedings against the Government of El Salvador
under the Central America-Dominican Republic-United States of America Free Trade
Agreement ("CAFTA") in its own name and on behalf of its two wholly-owned El
Salvadoran enterprises, Pacific Rim El Salvador, Sociedad Anónima de Capital
Variable and Dorado Exploraciones, Sociedad Anónima de Capital Variable.

The arbitration will be administered
under the Convention on the Settlement of Investment Disputes Between States and
Nationals of Other States and under the Rules of Procedure for Arbitration
Proceedings of the International Centre for Settlement of Investment Disputes
("ICSID"). ICSID is an affiliate of the World Bank and is headquartered in
Washington, D.C.

Measurement uncertainty:

The Companys activities in El
Salvador are subject to the effects of changes in legal, tax and regulatory
regimes, national and local political issues, labour and economic developments
and government bureaucracy. The Company has experienced lengthy delays in the
processing of the El Dorado exploitation concession application and has
commenced a legal claim under CAFTA as noted above. If the Company is
unsuccessful in obtaining a permit for El Dorado or in its

- 12 -

---

|Pacific Rim Mining Corp.                              
|------------------------------------------------------
|Notes to Consolidated Financial Statements            
|April 30, 2009, 2008, and 2007                        
|In thousands of U.S. Dollars, except per share amounts
|                                                      

CAFTA claim, or other factors beyond
the control of the Company, such factors would adversely impact operations in El
Salvador or result in the impairment of the El Dorado property in the future;
such impairment would be material. To date, the Companys discussions with its
legal counsel representing the Company in its CAFTA arbitration have not
resulted in a determination of any material impairment in the carrying value of
the Company concessions.

b) Other El Salvador Properties

By agreement dated February 6, 2006,
the Company agreed to acquire from a consortium of private companies a 100%
interest in an El Salvador exploration concession to be known as the Zamora
property. Upon TSX approval of the original agreement, the Company was required
to make a payment of 50,000 shares. The agreement was subsequently amended in
September 2006 to include the acquisition of a 100% interest in the Cerro
Colorado claims while maintaining the provisions in the agreement for the
Companys acquisition of the Zamora claims. Under the terms of the amended
agreement, the Company maintains an option to purchase the exploration
concessions by making advance royalty payments as follows:

Upon TSX approval
      of the agreement:
    100,000 shares plus 100,000 warrants of the CompanyYearly advance
      payments:
    The
      greater of:First anniversary (shares
      issued)
    100,000 shares or $100 in
      shares of the CompanySecond anniversary (shares issued)
    140,000 shares or $140 in
      shares of the CompanyThird anniversary (shares issued)
    200,000 shares or $200 in
      shares of the CompanyFourth anniversary
    300,000 shares or $300 in
      shares of the CompanyFifth and subsequent anniversaries
    400,000 shares or $400 in
      shares of the Company


The advance royalty payments will
continue until production is achieved or the exploration concessions expire.
Title to 100% of the Cerro Colorado and Zamora claims will be transferred to the
Company at such time as a positive production decision is made by the Company.
Upon achievement of commercial production from the Cerro Colorado or Zamora
claims, the vendor will receive a 3% net smelter royalty to a maximum purchase
price of $10,000 (inclusive of the value of the advance royalty payments made).

Upon TSX approval of the original
agreement, 50,000 shares were issued on March 8, 2006. Upon TSX approval of the
amended agreement, 100,000 shares and 100,000 warrants of the Company were
issued on November 8, 2006. On February 13, 2007, February 11, 2008, and
February 12, 2009 100,000 and 140,000, and 1,118,182 common shares respectively
were issued pursuant to the first, second and third anniversary payments.

|5. | Restricted Cash                                                                                                 
|-- | ----------------------------------------------------------------------------------------------------------------
|   |                                                                                                                 
|   | The Company has $21 (2007 - $24) in environmental bonds
      relating to exploration properties in El Salvador.
|   |                                                                                                                 
|6. | Discontinued Operations                                                                                         

a) Sale of Denton-Rawhide Joint-Venture

On October 28 2008, the Company sold
its 49% interest in the Denton Rawhide mine and its interest in the agreement
with the Nevada Resource Recovery Group LLC (NRRG) to Kennecott Rawhide Mining
Company for cash proceeds of $3.1 million.

In addition, the Company had the right
to a 49% interest in all dore produced and shipped from the Rawhide Mine on or
before December 31, 2008 and was responsible to fund its proportionate 49% share
of all cash calls for normal operating costs up to and including December 31,
2008. This contingent consideration was received and recorded in the year ended
April 30, 2009.

- 13 -

---

|Pacific Rim Mining Corp.                              
|------------------------------------------------------
|Notes to Consolidated Financial Statements            
|April 30, 2009, 2008, and 2007                        
|In thousands of U.S. Dollars, except per share amounts
|                                                      

Pursuant to the terms of the sale
agreement, and subsequent to December 31, 2008, the Company is responsible for
its proportionate share of reclamation and environmental closure costs exceeding
$7 million related to the Denton Rawhide mine. The Company has not accrued any
closure costs for amounts greater than $7 million as at April 30, 2009. The
Company estimates total reclamation and environmental closure costs to be $4.9
million. The Company believes the contingent liability relating to the
reclamation and environmental closure costs exceeding $7 million is unlikely and
cannot be estimated and therefore has not recorded a liability for these costs.

The company realized a gain, net of
tax, on its sale of the joint venture interest as follows:

| |                                                                               |   | For the Year Ended |  
| | ----------------------------------------------------------------------------- | - | ------------------ | -
| |                                                                               |   | April 30 2008      |  
| |                                                                               |   |                    |  
| | Cash proceeds from sale of 49% interest in
      Denton-Rawhide joint venture | $ | 3,100              |  
| | Fair value of bullion received in November and December
      2008            |   | 1,686              |  
| | Cash operating payments made in November
      and December 2008 - net        |   | (754               | )
| | Less net assets disposed:                                                     |   |                    |  
| | Property plant and equipment                                                  |   | (1,239             | )
| | Closure fund                                                                  |   | (3,792             | )
| | Pension and Post-Retirement Benefits and
      Severence Liability            |   | 587                |  
| | Asset Retirement Obligations                                                  |   | 1,691              |  
| |                                                                               |   | 1,279              |  
| | Income taxes net of tax losses carried forward                                |   | (40                | )
| | Realized gain, net of tax, on sale of joint
      venture interest            | $ | 1,239              |  

| | For the Year Ended April 30,                             |  | 2009   |   |  | 2008   |   |  | 2007   |  
| | -------------------------------------------------------- |  | ------ | - |  | ------ | - |  | ------ | -
| |                                                          |  |        |   |  |        |   |  |        |  
| | Results of operations from Discontinued
      Operations |  |        |   |  |        |   |  |        |  
| | Revenue                                                  |  | 6,090  |   |  | 7,680  |   |  | 8,337  |  
| | Cost of sales                                            |  | (4,229 | ) |  | (6,084 | ) |  | (5,582 | )
| | General                                                  |  | 67     |   |  | (27    | ) |  | 332    |  
| | Income before taxes                                      |  | 1,928  |   |  | 1,623  |   |  | 3,087  |  
| | Income taxes                                             |  | (-)    |   |  | (100   | ) |  | (178   | )
| |                                                          |  | 1,928  |   |  | 1,523  |   |  | 2,909  |  
| |                                                          |  |        |   |  |        |   |  |        |  
| | Cash Flows From (Used In) Discontinued
      Operations  |  |        |   |  |        |   |  |        |  
| | Cash flow provided by operating activities               |  | 2,721  |   |  | 1,662  |   |  | 3,397  |  
| | Cash flow used in investing activities                   |  | (237   | ) |  | (203   | ) |  | (489   | )
| |                                                          |  | 2,484  |   |  | 1,459  |   |  | 2,908  |  

The gain on sale of the net assets of
$1,239 and the results of operations of $1,928 for the year ended April 30, 2009
,amounting to $3,167, have been disclosed as discontinued operations in the
statement of loss. Also as a result of the sale, $197 previously recognized as
other comprehensive income has been reclassified as part of the gain on disposal
in the statement of loss as the mine closure fund was part of the assets
disposed of.

- 14 -

---

|Pacific Rim Mining Corp.                              
|------------------------------------------------------
|Notes to Consolidated Financial Statements            
|April 30, 2009, 2008, and 2007                        
|In thousands of U.S. Dollars, except per share amounts
|                                                      

Assets and liabilities of the Companys
joint venture have been reclassified as assets and liabilities of discontinued
operations on the balance sheet as follows:

| |                                                      |   | April 30 |  |   | April 30 | 
| | ---------------------------------------------------- | - | -------- |  | - | -------- | 
| |                                                      |   | 2009     |  |   | 2008     | 
| | Inventory                                            | $ | -        |  | $ | 1,290    | 
| | Property, plant and equipment                        |   | -        |  |   | 1,173    | 
| | Closure fund                                         |   | -        |  |   | 3,787    | 
| | Total Assets                                         |   | -        |  |   | 6,250    | 
| |                                                      |   |          |  |   |          | 
| | Accounts payable and accrued liabilities             |   | -        |  |   | 1,182    | 
| | Current portion of Pension and
      Post-Retirement |   |          |  |   |          | 
| | Benefits                                             |   | -        |  |   | 131      | 
| | Current portion of Asset Retirement
      Obligation |   | -        |  |   | 260      | 
| | Current Liabilities                                  |   | -        |  |   | 1,573    | 
| | Severance Liability                                  |   | -        |  |   | 384      | 
| | Pension and Post-Retirement Liability                |   | -        |  |   | 72       | 
| | Asset Retirement Obligation                          |   | -        |  |   | 1,664    | 
| | Total Liabilities                                    | $ | -        |  | $ | 3,693    | 

|   | b) Shut Down and Sale of Andacollo Mine                                                                                                                                                                                                                                                                                                                                     
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                             
|   | The carrying values of the assets and liabilities of the
      Chilean operating subsidiary that owned the Andacollo Mine were written
      off effective December 1, 2000 with a corresponding charge to income and
      to reflect permanent closure of the mine and the estimated realizable
      value of capital assets after all liabilities had been
  liquidated.
|   |                                                                                                                                                                                                                                                                                                                                                                             
|   | Proceeds from creditor distribution and payments related
      to subsequent sales of the previously written off assets are recorded as
      Discontinued Operations  Recovery of Investment in Andacollo
    Mine.                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                             
|   | On September 21, 2005 the Company entered into an
      agreement to sell 100% of the shares of the Cayman and Chilean
      subsidiaries that owned the Andacollo Mine for a total price of $5,400, of
      which $4,000 was received by April 30, 2007 and the remaining balance of
      $1,400 was received in the year ended April 30, 2008.                          
|   |                                                                                                                                                                                                                                                                                                                                                                             
|7. | Share Capital                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                             
|   | Common Shares                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                             
|   | Authorized: Unlimited number of common shares                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                             
|   | Warrants                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                             
|   | As at April 30, 2009, there were 7,161,350 (April 30,
      2008  7,161,350) warrants outstanding with a weighted average exercise
      price of Cdn$1.34.                                                                                                                                                                                                                

Number of
      warrants
    Exercise price ($Cdn)
    Expiry100,000
    0.81
    November 07, 20096,711,000
    1.35
    August 29, 2009350,350
    1.11
    August 29, 20097,161,350


- 15 -

---

|Pacific Rim Mining Corp.                              
|------------------------------------------------------
|Notes to Consolidated Financial Statements            
|April 30, 2009, 2008, and 2007                        
|In thousands of U.S. Dollars, except per share amounts
|                                                      

Stock Options

In April 2002 Dayton Mining Corporation
and Pacific Rim Mining Corporation were amalgamated. The stock option plans
existing at that date were combined.

In October 2002 shareholders approved a
stock option and bonus plan (2002 Plan) under which, up to 6,000,000 common
shares were reserved for the grant of stock options and up to 367,000 common
shares were reserved for the grant of bonus shares to directors, employees or
consultants (eligible parties).

On August 29, 2006, shareholders
adopted an evergreen incentive stock option plan (2006 Plan) whereby the
maximum number of shares reserved for grant to Eligible Parties under the 2006
Plan is equal to 10% of the number of shares outstanding at the time of the
grant, including all outstanding options granted under the 2002 Plan.

There are currently 1,606,663 stock
options available for grant as at April 30, 2009. Current option details are as
follows:

|                                      |  | Number of Options |   |  |                 |   |  |                 |  
|------------------------------------- |  | ----------------- | - |  | --------------- | - |  | --------------- | -
|                                      |  |                   |   |  |                 |   |  |                 |  
|                                      |  | Pre-              |   |  |                 |   |  |                 |  
|                                      |  | Amalgamation      |   |  |                 |   |  |                 |  
|                                      |  | Plans             |   |  | 2002
      Plan |   |  | 2006
      Plan |  
|Options outstanding at April 30, 2006 |  | 959,000           |   |  | 4,267,500       |   |  | -               |  
|                                      |  |                   |   |  |                 |   |  |                 |  
|Year ended April 30,2007  granted    |  | -                 |   |  | 1,000,000       |   |  | 1,795,000       |  
|
      exercised                     |  | (959,000          | ) |  | (1,685,000      | ) |  | -               |  
|Options outstanding at April 30, 2007 |  | -                 |   |  | 3,582,500       |   |  | 1,795,000       |  
|                                      |  |                   |   |  |                 |   |  |                 |  
|Year ended April 30,2008  granted    |  | -                 |   |  | -               |   |  | 2,400,000       |  
|
      expired/cancelled             |  | -                 |   |  | (60,000         | ) |  | (30,000         | )
|
      exercised                     |  | -                 |   |  | (282,500        | ) |  | -               |  
|Options outstanding at April 30, 2008 |  | -                 |   |  | 3,240,000       |   |  | 4,165,000       |  
|                                      |  |                   |   |  |                 |   |  |                 |  
|Year ended April 30,2009  granted    |  | -                 |   |  | -               |   |  | 2,855,000       |  
| expired                             |  | -                 |   |  | (1,195,000      | ) |  | -               |  
| forfeited                           |  | -                 |   |  | -               |   |  | (335,001        | )
|Options outstanding at April 30, 2009 |  | -                 |   |  | 2,045,000       |   |  | 6,684,999       |  
|Options vested as at April 30, 2009   |  | -                 |   |  | 2,045,000       |   |  | 4,314,999       |  

The total stock-based compensation
recognized during the year ended April 30, 2009 was $555 (2008 - $994; 2007 -
$968) with the offsetting entry to contributed surplus. These options were
valued using the Black-Scholes option pricing model, based on the following
assumptions:

| |                                                                | 2009      | 2008    | 2007   
| | -------------------------------------------------------------- | --------- | ------- | -------
| | Risk free interest rate                                        | 1.59 %    | 3.94%   | 4.01%  
| | Expected option life (years)                                   | 3-5 years | 5 years | 4 years
| | Stock volatility  based on trading history                    | 85-95%    | 66%     | 78%    
| | Dividend payments during life of option                        | nil       | nil     | nil    
| | Total fair value of options granted (in Cdn
      $ thousands) | $309      | $389    | $309   

Option pricing models require the input
of highly subjective assumptions regarding the expected volatility. Changes in
assumptions can materially affect the fair value estimate, and therefore, the
existing models do not necessarily provide a reliable measure of the fair value
of the Companys stock options at the date of grant.

- 16 -

---

|Pacific Rim Mining Corp.                              
|------------------------------------------------------
|Notes to Consolidated Financial Statements            
|April 30, 2009, 2008, and 2007                        
|In thousands of U.S. Dollars, except per share amounts
|                                                      

The following table summarizes
information about stock options outstanding at April 30, 2009.

Exercise Price
    Number
    NumberExpiry Date
    (in
      Cdn $)
    Outstanding
    VestedFebruary 18, 2010
    $0.75
    995,000
    995,000September 16, 2009
    $0.75
    15,000
    15,000November 29, 2009
    $0.75
    20,000
    20,000October 30, 2009
    $0.75
    15,000
    15,000June 27, 2010*
    $0.99
    220,000
    -March 30, 2010
    $0.74
    500,000
    500,000December 11, 2009
    $0.92
    500,000
    500,000August 28, 2011
    $0.92
    1,080,000
    1,080,000September 16, 2009
    $0.92
    20,000
    20,000October 30, 2009
    $0.92
    110,000
    110,000November 29, 2009
    $0.92
    40,000
    40,000February 27, 2010
    $0.92
    80,000
    80,000June 29, 2009
    $0.92
    30,000
    30,000July 30, 2009
    $0.92
    80,000
    80,000December 3, 2011
    $1.34
    125,000
    125,000February 11, 2012
    $1.32
    200,000
    200,000June 12, 2012
    $0.90
    60,000
    40,000August 27, 2012
    $0.96
    300,000
    300,000March 9, 2013
    $1.17
    1,255,000
    836,667March 30, 2010
    $1.17
    83,333
    83,333December 11, 2009
    $1.17
    33,333
    33,333September 16, 2009
    $1.17
    6,667
    6,667October 30, 2009
    $1.17
    43,333
    43,333February 27, 2010
    $1.17
    26,666
    26,666June 29, 2009
    $1.17
    10,000
    10,000July 30, 2009
    $1.17
    26,667
    26,667December 29, 2013
    $0.17
    2,855,000
    1,143,3338,729,999
    6,359,999


|   | * These are performance vested
      options that have a term of three years and vest upon attaining specified
      milestones.    
|-- | ------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                     
|8. | Related Party Transactions                                                                                                          
|   |                                                                                                                                     
|   | The following represents the
      details of related party transactions paid or accrued during the year
      ended April 30, 2009:

| |                                                                 |   | 2009 |  |   | 2008 | 
| | --------------------------------------------------------------- | - | ---- |  | - | ---- | 
| | Accounting fees paid to a firm in which an
      officer of the |   |      |  |   |      | 
| | Company is a
      partner                                      | $ | 52   |  | $ | nil  | 

Included in accounts payable is $8
(2008 - $nil) of amounts due to related parties, which are unsecured,
non-interest bearing and payable on demand.

Related party transactions are in the
normal course of business and occur on terms similar to transactions with
non-related parties, and therefore are measured at the exchange amount.

- 17 -

---

|Pacific Rim Mining Corp.                              
|------------------------------------------------------
|Notes to Consolidated Financial Statements            
|April 30, 2009, 2008, and 2007                        
|In thousands of U.S. Dollars, except per share amounts
|                                                      

|9. | Financial Risk Management                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | (a) Market Risks                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | (i) Commodity Price Risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | The Company is subject to price risk from fluctuations in
      the market price of gold and silver as a result of it holding bullion,
      which in turn is affected by numerous factors including central bank
      policies, producer hedging activities, the value of the US dollar relative
      to other major currencies, global demand and supply and global political
      and economic conditions. At April 30, 2009, the impact of a 10%
      depreciation or appreciation from the carrying value of its gold and
      silver buillion would result in an increase or decrease of $122 in the
      Companys net earnings.                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | (ii) Foreign Currency Risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | The Companys exposure to foreign currency risk is
      primarily related to Canadian dollar-denominated transactions. The Company
      does not enter into foreign exchange contracts to manage this exposure. At
      April 30, 2009 the impact of a 10% depreciation or appreciation of the US
      dollar against the Canadian dollar would result in an increase or decrease
      of $19 in the Companys net earnings.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | (b) Liquidity Risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | Liquidity risk is the risk that the Company will
      encounter difficulty in raising funds to meet its operating commitments.
      The Company seeks to manage liquidity by maintaining adequate cash and
      cash equivalent balances to meet its short term commitments and by raising
      equity or debt financing as required to meet long term commitments. As
      disclosed in note 1, the Company has no assurance that such financing will
      be available or be available on favourable terms. Factors that could
      affect the availability of financing include Pacific Rims performance as
      measured by various factors including the progress and permitting of the
      El Dorado project, the state of international debt and equity markets,
      investor perceptions and expectations and the global financial and metals
      markets. The following table summarizes the remaining contractual
      maturities of the Companys financial liabilities and operating and
      capital commitments at April 30, 2009:

2014 and2010
    
    
    2011
    
    
    2012
    
    
    2013
    
    
    later
    
    
    Total$
    
    
    $
    
    
    $
    
    
    $
    
    
    $
    
    
    $Accounts payable
    
    633
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    633Operating leases
    
    50
    
    
    37
    
    
    35
    
    
    25
    
    
    -
    
    
    147Totals
      
      683
      
      
      37
      
      
      35
      
      
      25
      
      
      -
      
      
      780


(c) Interest Rate Risk

The Company does not have significant
interest rate risk as all short term investments and closure fund investments
are held in instruments with guaranteed interest rates.

(d) Credit risk

Credit risk is the risk of an
unexpected loss if a customer or third party to a financial instrument fails to
meet its contractual obligations. The maximum credit risk the Company is exposed
to is 100% of cash and receivables.

(e) Fair Values

The Company classifies its financial
assets as either held for trading, available for sale or loans and receivables.
Financial liabilities are classified as either held for trading or other
financial liabilities.

- 18 -

---

|Pacific Rim Mining Corp.                              
|------------------------------------------------------
|Notes to Consolidated Financial Statements            
|April 30, 2009, 2008, and 2007                        
|In thousands of U.S. Dollars, except per share amounts
|                                                      

|    | Cash and cash equivalents, short term investments and
      restricted cash are designated as held for trading and recorded at fair
      value with unrealized gains and losses recorded in operating income or
      loss during the period. Receivables and Deposits are designated as loans
      and receivables and recorded at amortized cost. Accounts Payable are
      designated as other financial liabilities and are recorded at amortized
      cost. The Companys carrying values of receivables and deposits and
      accounts payable approximate fair values due to their short terms to
      maturity.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|10. | Capital Risk Management                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | The Company defines its capital as shareholders equity
      as the Company has no debt.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | The Companys objectives when managing capital
  are:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    | •                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | •                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | The Company continuously assesses its capital structure
      in light of economic conditions, debt and equity markets and changes in
      the Companys short-term and long-term plans. The Company is not subject
      to externally imposed capital requirements.                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|11. | Income Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

| |                                    |   | Year ended |   |   | Year ended |   |   | Year ended |  
| | ---------------------------------- | - | ---------- | - | - | ---------- | - | - | ---------- | -
| |                                    |   | April 30,  |   |   | April 30,  |   |   | April 30,  |  
| |                                    |   | 2009       |   |   | 2008       |   |   | 2008       |  
| | Loss before income taxes and       |   |            |   |   |            |   |   |            |  
| | discontinued operations            | $ | (9,443     | ) | $ | (14,611    | ) | $ | (13,327    | )
| | Federal and provincial income tax  |   |            |   |   |            |   |   |            |  
| | rates                              |   | 30.50%     |   |   | 33.10%     |   |   | 34.10%     |  
| |                                    |   |            |   |   |            |   |   |            |  
| | Income tax recovery based on the   |   |            |   |   |            |   |   |            |  
| | above rates                        | $ | (2,880     | ) | $ | (4,836     | ) | $ | (4, 544    | )
| | Non-deductible expenses for income |   |            |   |   |            |   |   |            |  
| | tax
      purposes                 |   | 189        |   |   | 206        |   |   | 306        |  
| | Difference between Canadian and    |   |            |   |   |            |   |   |            |  
| | foreign tax rates                  |   | 285        |   |   | 977        |   |   | 975        |  
| | Change in future tax rates         |   | -          |   |   | 3,482      |   |   | -          |  
| | Foreign exchange losses in local   |   |            |   |   |            |   |   |            |  
| | currencies                         |   | -          |   |   | -          |   |   | -          |  
| | Losses and other temporary         |   |            |   |   |            |   |   |            |  
| | differences for which no
      tax |   |            |   |   |            |   |   |            |  
| | benefit
      has been recorded    |   | 2,406      |   |   | 662        |   |   | 3,263      |  
| | Income tax expense                 | $ | -          |   | $ | 1,046      |   | $ | -          |  
| |                                    |   |            |   |   |            |   |   |            |  
| | Represented by:                    |   |            |   |   |            |   |   |            |  
| | Current income
      tax           | $ | -          |   | $ | -          |   | $ | -          |  
| | Future income tax                  |   | -          |   |   | 1,046      |   |   |            |  
| |                                    | $ | -          |   | $ | 1,046      |   | $ | -          |  

- 19 -

---

|Pacific Rim Mining Corp.                              
|------------------------------------------------------
|Notes to Consolidated Financial Statements            
|April 30, 2009, 2008, and 2007                        
|In thousands of U.S. Dollars, except per share amounts
|                                                      

The tax effects of temporary
differences that give rise to significant portions of the future tax assets and
future tax liabilities at April 30, 2009 and April 30, 2008 are presented below:

| |                                                            |   | April 30, |   |   | April 30, |  
| | ---------------------------------------------------------- | - | --------- | - | - | --------- | -
| |                                                            |   | 2009      |   |   | 2008      |  
| | Future income tax assets:                                  |   |           |   |   |           |  
| | Non-capital losses                                         | $ | 6,024     |   | $ | 4,306     |  
| | Net
      capital losses                                   |   | 12,110    |   |   | 15,135    |  
| | Mineral properties and
      property, plant and equipment |   | 565       |   |   | 3,859     |  
| | Share
      issue costs and other                          |   | 205       |   |   | 649       |  
| | Total future income tax assets                             |   | 18,903    |   |   | 23,949    |  
| | Valuation allowance                                        |   | (18,903   | ) |   | (23,949   | )
| | Net future income tax
      assets                         |   | -         |   |   | -         |  
| |                                                            |   |           |   |   |           |  
| | Future income tax liabilities:                             |   |           |   |   |           |  
| | Property,
      plant and equipment                        |   | 1,046     |   |   | 1,046     |  
| |                                                            |   | 1,046     |   |   | 1,046     |  
| |                                                            |   |           |   |   |           |  
| | Net future income
      tax liabilities                    | $ | 1,046     |   | $ | 1,046     |  

| | b) | The Company has various losses and deferred exploration
      expenditures that are available for carry forward to reduce taxable income
      of future years. As at April 30, 2009 the Company has the following tax
      loss carry forwards and deductions:
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Non-capital
      losses, expiring as follows: |   | Canada |  |   | United States |  |   | Argentina | 
| | ---------------------------------------------- | - | ------ |  | - | ------------- |  | - | --------- | 
| | 2009-2013                                      | $ | 1,006  |  | $ | -             |  | $ | 2,633     | 
| | 2014                                           |   | 1,247  |  |   | -             |  |   | -         | 
| | 2015                                           |   | 1,144  |  |   | -             |  |   | -         | 
| | 2017                                           |   | -      |  |   | 664           |  |   | -         | 
| | 2019                                           |   | -      |  |   | 24            |  |   | -         | 
| | 2020                                           |   | -      |  |   | 269           |  |   |           | 
| | 2021                                           |   | -      |  |   | 612           |  |   |           | 
| | 2022                                           |   | -      |  |   | 719           |  |   |           | 
| | 2023                                           |   | -      |  |   | 1,654         |  |   |           | 
| | 2024                                           |   | -      |  |   | 808           |  |   |           | 
| | 2026                                           |   | 1,318  |  |   | 313           |  |   | -         | 
| | 2027                                           |   | 1,613  |  |   | 271           |  |   | -         | 
| | 2028                                           |   | 2,606  |  |   | 476           |  |   | -         | 
| | 2029                                           |   | 3,175  |  |   | 118           |  |   | -         | 
| |                                                |   | 12,109 |  |   | 5,928         |  |   | 2,633     | 

In addition, the Company has incurred
over $42 million in exploration expenditures in El Salvador that are not
recognized because there is uncertainty surrounding mining tax legislation in El
Salvador.

A full valuation allowance has been
recorded against the majority of the potential future income tax assets
associated with the Canadian loss carry-forwards and the exploration
expenditures in El Salvador as their utilization is not considered more likely
than not at this time.

|12. | Commitments                                                                                                                                                             
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                         
|    | a) The Company has entered into an operating lease
      agreement, commencing February 1, 2008 to January 30, 2013. The minimum
      monthly lease payments are Cdn$3.

- 20 -

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|Pacific Rim Mining Corp.                              
|------------------------------------------------------
|Notes to Consolidated Financial Statements            
|April 30, 2009, 2008, and 2007                        
|In thousands of U.S. Dollars, except per share amounts
|                                                      

|    | b) The Company has entered into an operating lease
      agreement, commencing December 1, 2008 to November 30, 2009. The minimum
      monthly lease payments are Cdn$3.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                          
|13. | Segmented Information                                                                                                                                                    

| | Total Assets                        |   | April
      30, 2009 |  |   | April
      30, 2008 |  |   | April
      30, 2007 | 
| | ----------------------------------- | - | -------------------- |  | - | -------------------- |  | - | -------------------- | 
| | Canada                              | $ | 403                  |  | $ | 5,641                |  | $ | 9,748                | 
| | USA                                 |   | 2,013                |  |   | 369                  |  |   | 100                  | 
| | El Salvador                         |   | 5,770                |  |   | 5,987                |  |   | 5,554                | 
| | Argentina                           |   | 1                    |  |   | 10                   |  |   | 9                    | 
| | Discontinued
      operations  USA |   | -                    |  |   | 6,263                |  |   | 6,083                | 
| | Total                               | $ | 8,187                |  | $ | 18,270               |  | $ | 21,494               | 

| | Property, Plant and Equipment |   | April
      30, 2009 |  |   | April
      30, 2008 |  |   | April
      30, 2007 | 
| | ----------------------------- | - | -------------------- |  | - | -------------------- |  | - | -------------------- | 
| | Canada                        | $ | 12                   |  | $ | 17                   |  | $ | 77                   | 
| | El Salvador                   |   | 5,539                |  |   | 5,603                |  |   | 4,711                | 
| | Total                         | $ | 5,551                |  | $ | 5,620                |  | $ | 4,788                | 

| |                                     |   | Year
      Ended April 30 |  
| | ----------------------------------- | - | ------------------------- | -
| | Net Income (Loss)                   |   | 2009                      |  
| | Canada                              | $ | (3,847                    | )
| | USA                                 |   | (673                      | )
| | El Salvador                         |   | (4,824                    | )
| | Argentina                           |   | (99                       | )
| | Discontinued operations
       USA |   | 3,167                     |  
| | Chile                               |   | -                         |  
| | Total                               | $ | (6,276                    | )

|14. | United States Generally Accepted Accounting Principles
      (US GAAP)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | The measurement differences between Canadian GAAP and US
      GAAP are summarized below. There is no effect on the financial
      statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | Accounting for Uncertainty in Income Tax
      Positions                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | In June 2006, the Financial Accounting Standards Board
      (FASB) issued FIN 48, Accounting for Uncertainty in Tax Position, an
      Interpretation of FASB Statement No. 109. FIN 48 addresses the recognition
      and measurement of all tax positions. The recognition process involves
      determining whether it is more likely than not that a tax position would
      be sustained on an audit based solely on its technical merits. The amount
      of benefit recognized in the financial statements is the maximum amount
      that is more likely than not to be realized based on a cumulative
      probability approach. FIN 48 is effective for fiscal years beginning on or
      after December 15, 2006. The Company adopted FIN 48 effective May 1, 2007.
      The adoption did not result in any difference between Canadian GAAP and US
      GAAP.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | Realization of Future Income Tax Benefit for Stock
      Compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | For Canadian GAAP purposes, a future tax asset is
      recognized for the temporary difference related to share options based on
      the stock-based compensation recognized for financial statement purposes.
      The future tax asset is recognized in the period that the stock-based
      compensation expense is                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

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|Pacific Rim Mining Corp.                              
|------------------------------------------------------
|Notes to Consolidated Financial Statements            
|April 30, 2009, 2008, and 2007                        
|In thousands of U.S. Dollars, except per share amounts
|                                                      

recorded. At each reporting period, if
there is a decline in the market price of the Corporations common stock below
the option strike price , this factor is taken into account in determining
whether recoverability of the future income tax asset is considered more likely
than not. At December 31, 2008 a full valuation allowance has been recorded
under Canadian GAAP against the related future tax asset for options whose
market price is below their share price. Under US GAAP, a decline in stock price
subsequent to the issuance of a share option is not taken into account in
assessing whether related future income tax assets are recoverable. This caused
no differences to arise between US and Canadian GAAP.

Equity InstrumentsIn June 2008, EITF07-5 confirmed a consensus that all equity instruments
with an exercise price denominated in a currency that is different from the
entitys functional currency cannot be classified as equity. As a result, these
instruments would be treated as derivatives and recorded as liabilities carried
at their fair value, with changes in the fair value from period to period
recorded as a gain or loss in the Statement of Income/(Loss). The Companys
functional currency is the U.S. dollar and it has issued and outstanding
warrants and options that have an exercise price that is denominated in Canadian
dollars. This consensus is applicable for fiscal years beginning after December
15, 2008 and accordingly will apply to the Company in the fiscal year commencing
May 1, 2009.

Stock-based
CompensationUS GAAP requires that stock-based compensation
not be shown as a separate item in the determination of net income (loss), as
allowed under Canadian GAAP, but to be included in the specific income statement
categories that include the costs of the employees for which the option grant
applies. This difference resulted in no differences arising in the presentation
of income.

Proportionate
ConsolidationUS GAAP requires investments in joint ventures
to be accounted for using the equity method, whereas under Canadian GAAP the
accounts of joint ventures are proportionately consolidated. The Companys joint
venture interest qualifies for the SEC accommodation, which allows the continued
use of the proportionate consolidation method. Additional information regarding
the Companys joint venture interest is disclosed in note 6.

Financial InstrumentsUnder Canadian GAAP, prior to adopting the new financial instruments
standard effective May 1, 2007, investments in short term investments and the
closure fund were recorded at cost. For US GAAP, these investments are
designated as available for sale and are recorded at fair value with
unrealized gains or losses included in other comprehensive income until
realized. With the adoption of the new Canadian financial instruments standards
effective May 1, 2007, the treatment and recording of unrealized gain and losses
on investments has been harmonized. The differences between Canadian and US GAAP
in 2007 and 2006 were not material.

Recent U.S. Accounting
Pronouncements

SFAS No. 141 (revised 2007), Business
Combinations (SFAS No.141R). Under SFAS No. 141R, all business combinations
will be accounted for under the acquisition method, and the new standard makes
certain other changes to the accounting for business combinations, of which the
most significant are as follows: (i) the acquirer will recognize the full
acquisition date fair value of contingent assets and liabilities, with
subsequent changes to the fair value recognized in earnings; and (ii) equity
issued in consideration for a business combination will be measured at fair
value as of the acquisition date. SFAS No. 141R applies prospectively to
business combinations for which the acquisition date is on or after fiscal years
beginning after December 15, 2008. Early adoption is prohibited. The Corporation
will adopt SFAS-141R for US GAAP purposes for business combinations on May 1,
2009, as required and is currently evaluating the impact of this statement.

- 22 -

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|Pacific Rim Mining Corp.                              
|------------------------------------------------------
|Notes to Consolidated Financial Statements            
|April 30, 2009, 2008, and 2007                        
|In thousands of U.S. Dollars, except per share amounts
|                                                      

SFAS No 157, Fair Value Measurements,
(SFAS 157) was issued in September 2006. SFAS 157 provides a consistent
definition of fair value which focuses on exit price and prioritizes, within a
measurement of fair value, the use of market-based inputs over entity-specific
inputs. SFAS 157 requires expanded disclosures about fair value measurements and
is effective for financial statements issued for fiscal years beginning after
November 15, 2007. The provisions of SFAS 157 will be applied prospectively. The
Company has determined that the adoption of SFAS 157 has no impact on its
consolidated financial statements.

SFAS No 159, The Fair Value Option for
Financial Assets and Financial Liabilities  including an Amendment of SFAS No
115 (SFAS 159) was issued in February 2007. SFAS 159 permits an entity to
measure certain financial assets and financial liabilities at fair value that
are not currently required to be valued at fair value. Entities that elect the
fair value option will report unrealized gains and losses in earnings at each
subsequent reporting date. The fair value option may be elected on an
instrument-by-instrument basis, with few exceptions. SFAS 159 also establishes
presentation and disclosure requirements to help financial statement users
understand the effect of the election. SFAS 159 is effective for fiscal years
beginning after November 15, 2007. The Company has determined that the adoption
of this standard has no impact on its consolidated financial statements.

SFAS No 160, Non-controlling Interests
in Consolidated Financial Statements, an Amendment of ARB 51 (SFAS 160) was
issued in December 2007. SFS 160 specifies that non-controlling interests are to
be treated as a separate component of equity, not as a liability or other item
outside of equity. Because non-controlling interest are an element of equity,
increases an decreases in the parent companys ownership interest that leave
control intact are accounted for as a capital transaction rather than as a step
acquisition or dilution of gains and losses. The carrying amount of
non-controlling interests is adjusted to reflect the change in ownership
interests, and any difference between the amount by which the non-controlling
interests are adjusted and the fair value of the consideration paid or received
is recognized directly in equity attributable to the controlling interest. SFAS
160 is effective for fiscal years beginning on or after December 15, 2008 and
will be applied prospectively to all non-controlling interests, including those
that arose before the effective date. The Company has determined that the
adoption of this standard has no impact on its consolidated financial
statements.

SFAS No 161, Disclosures about
Derivative Instruments and Hedging Activities  an amendment to FASB Statement
No 133 (SFAS 161) was issued in March 2008. SFAS 161 is intended to improve
financial instruments standards for derivative instruments and hedging
activities by requiring enhanced disclosures to enable investors to better
understand their effects on an entitys financial position, financial
performance, and cash flows. Entities are required to provide enhanced
disclosures about: (a) how and why an entity uses derivative instruments; (b)
how derivative instruments and related hedged items are accounted for under
Statement 133 and its related interpretations; and (c) how derivative
instruments and related hedged items affect an entitys financial position,
financial performance and cash flows. It is effective for financial statements
issue for fiscal years beginning after November 15 2008, with early adoption
encouraged. Since the Company does not apply hedge accounting and has no
derivatives, the adoption of this standard has no impact.

SFAS No. 162, The Hierarchy of
Generally Accepted Accounting Principles, (SFAS 162) was issued May 2008.
SFAS 162 identifies the sources of accounting and the framework for selecting
the principles to be used in the preparation of financial statements of
nongovernmental entities that are presented in conformity with U.S. GAAP. SFAS
No. 162 was effective November 15, 2008. The Company does not expect that the
adoption of this standard for US GAAP purposes will have a material effect on
its consolidated financial statements.

FAS 157-3, Determining the Fair Value
of a Financial Asset when the Market for That Asset is Not Active. (FAS 157-3),
was issued October 2008. FAS 157-3 clarifies the application of SFAS No. 157 in
a market that is not active and provides key considerations in determining the
fair value of the

- 23 -

---

|Pacific Rim Mining Corp.                              
|------------------------------------------------------
|Notes to Consolidated Financial Statements            
|April 30, 2009, 2008, and 2007                        
|In thousands of U.S. Dollars, except per share amounts
|                                                      

financial asset. FSP FAS 157- 3 is
effective upon issuance, including prior periods for which financial statements
have not been issued. Revisions resulting from a change in the valuation
technique or its application shall be accounted for as a change in accounting
estimate. It is not expected that the adoption of this standard for US GAAP
purposes will have a material effect on the consolidated financial statements.

FAS 169, Subsequent Events, (FAS
169) was issued May 2009. FAS 169 sets out (a) the period after the balance
sheet date during which management should evaluate events that may occur for
potential recognition or disclosure in the financial statements, (b) the
circumstances under which an entity should recognize events or transactions
occurring after the balance sheet date in its financial statements and (c) he
disclosures that an entity should make about events or transactions that
occurred after the balance sheet date. An entity should apply the requirements
of this statement to interim and annual financial periods ending after June 15,
2009. The Company is currently evaluating the impact of this statement on the
financial statements.

- 24 -

---