---

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 20-F

[   ] REGISTRATION STATEMENT PURSUANT TO SECTION 12(b)
or (g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended April 30, 2009

[   ] TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____ to _____

OR

[   ] SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of event require this shell company report:

Commission file number:001-31328



PACIFIC RIM MINING CORP.(Exact name of Registrant as specified in its charter)

Province of British Columbia, Canada(Jurisdiction of incorporation or organization)

625 Howe Street, Suite 1050, Vancouver, British Columbia,
Canada V6E 2T6(Address of principal executive offices

Ronda Fullerton625 Howe Street, Suite 1050,
Vancouver, British Columbia, Canada V6E 2T6 Tel: (604) 689-1976E-mail: rfullerton@pacrim-mining.com(Name, address
(including zip code) and telephone number (including area code) of agent for
service in the United States)

Securities registered or to be registered pursuant to Section
12(b) of the Act:

|Title of Each Class:        | Name of Each Exchange On Which Registered:
|--------------------------- | ------------------------------------------
|Common Shares, no par value | NYSE Amex                                 

Securities registered or to be registered pursuant to Section
12(g) of the Act: None

Securities for which there is a reporting obligation pursuant to
Section 15(d) of the Act: None

Indicate the number of outstanding shares of each of the
issuer's classes of capital or common stock as of the close of the period
covered by the annual report: 118,033,642

Indicate by check mark if the registrant is a well-known
seasoned issuer, as defined in Rule 405 of the Securities Act. [  
] Yes    [X] No

---

If this report is an annual or transition report, indicate by
check mark if the registrant is not required to file reports pursuant to Section
13 or 15(d) of the Securities Exchange Act of 1934. [   ]
Yes    [X] No

Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or if such shorter
period that the registrant was required to file such report(s), and (2) has
been subject to such filing requirements for the past 90 days. [X]
Yes    [   ] No

Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Web site, if any, every
Interactive Data File required to be submitted and posted pursuant to Rule
405 of Regulation S-T (§232.405 of this chapter) during the preceding 12
months (or for such shorter period that the registrant was require to submit and
post such files) [   ] Yes   [   ] No

Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, or a non-accelerated filer. See
definition of accelerated filer and large accelerated filer in Rule 12b-2
of the Exchange Act. (Check one):

Large accelerated filer [ 
 ]       Accelerated Filer [  
]       Non-accelerated filer [X]

Indicate by check mark which basis of accounting the registrant
has used to prepare the financial statements included in this filing:

|US GAAP [   ] | International Reporting Standards as
      issued   [   ] | Other [X]
|------------- | --------------------------------------------------------- | ---------
|              | By the International Accounting Standards
      Board     |          

If Other has been checked in response to the previous
question, indicate by check mark which financial statement item the registrant
has elected to follow: Item 17 [X]    Item 18
[   ]

If this is an annual report, indicate by check mark whether the
registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
[   ] Yes    [X] No

---

TABLE OF CONTENTS

|CAUTIONARY NOTE TO US
      INVESTORS REGARDING RESOURCE AND RESERVE ESTIMATES                   | 2 
|------------------------------------------------------------------------------------------------ | --
|GLOSSARY OF TECHNICAL TERMS                                                                      | 3 
|CAUTIONARY STATEMENT
      REGARDING FORWARD-LOOKING STATEMENTS                                  | 4 
|PART 1                                                                                           | 6 
|ITEM
      1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS                              | 6 
|ITEM 2. OFFER
      STATISTICS AND EXPECTED TIMETABLE                                            | 6 
|ITEM
      3. KEY INFORMATION                                                                    | 6 
|ITEM 4. INFORMATION
      ON THE COMPANY                                                         | 14
|ITEM
      4A. UNRESOLVED STAFF COMMENTS                                                         | 34
|ITEM 5. OPERATING
      AND FINANCIAL REVIEW AND PROSPECTS                                       | 34
|ITEM
      6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES                                         | 41
|ITEM 7. MAJOR
      SHAREHOLDERS AND RELATED PARTY TRANSACTIONS                                  | 56
|ITEM
      8. FINANCIAL INFORMATION                                                              | 57
|ITEM 9. THE OFFER
      AND LISTING                                                              | 57
|ITEM
      10. ADDITIONAL INFORMATION                                                            | 58
|ITEM 11.
      QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK                         | 64
|ITEM
      12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES                            | 65
|PART II                                                                                          | 65
|ITEM
      13. DEFAULTS, DIVIDENT ARREARAGES AND DELINQUENCIES                                   | 65
|ITEM 14
      MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF
      PROCEEDS | 66
|ITEM
      15. CONTROLS AND PROCEDURES                                                           | 66
|ITEM 16 [RESERVED]                                                                               | 67
|ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT                                                       | 67
|ITEM 16B.
      CODE OF ETHICS                                                                   | 67
|ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES                                                 | 68
|ITEM 16D.
      EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES                       | 68
|ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND
      AFFILIATED PURCHASERS           | 68
|ITEM 16F. CHANGE IN
      REGISTRANTS CERTIFYING ACCOUNTANT                                     | 68
|ITEM
      16G. CORPORATE GOVERNANCE                                                             | 69
|PART III                                                                                         | 69
|ITEM
      17. FINANCIAL STATEMENTS                                                              | 69
|ITEM 18 FINANCIAL
      STATEMENTS                                                               | 69
|ITEM
      19 EXHIBITS                                                                           | 70

---

CAUTIONARY NOTE TO US INVESTORS REGARDING RESOURCE AND
RESERVE ESTIMATES

This Annual Report on Form 20-F has been prepared in accordance
with the requirements of the securities law in effect in Canada, which differ
from the requirements of the United States securities laws. The terms mineral
reserve, proven mineral reserve and probable mineral reserve are Canadian
mining terms as defined in accordance with Canadian National Instrument 43-101 
Standards of Disclosure for Mineral Projects (NI 43-101) and the Canadian
Institute of Mining, Metallurgy and Petroleum (the CIM)  CIM Definition
Standards on Mineral Resources and Mineral Reserves, adopted by the CIM
Council, as amended. These definitions differ from the definitions in United
States Securities and Exchange Commission (SEC) Industry Guide 7 under the
United States Securities Act of 1993, as amended (the Securities Act). Under
SEC Industry Guide 7 standards, a final or bankable feasibility study is
required to report reserves, the three-year historical average price is used in
any reserve or cash flow analysis to designate reserves and the primary
environmental analysis or report must be filed with the appropriate governmental
authority.

In addition , the terms mineral resource, measured
resource, indicated resource and inferred resource are defined in and
required to be disclosed by NI 43-101; however, these terms are not defined
terms under SEC Industry Guide 7 and are normally not permitted to be used in
reports and registration statements filed with the SEC. Investors are cautioned
not to assume that any part of or all of mineral deposits in these categories
will ever be converted into reserves. Inferred mineral resources have a great
amount of uncertainty as to their existence, and great uncertainty as to their
economic and legal feasibility. It cannot be assumed that all or any part of an
inferred mineral resource will ever be upgraded to a higher category. Under
Canadian rules, estimates of inferred mineral resources may not form the basis
of feasibility or pre-feasibility studies, except in rare cases. Investors are
cautioned not to assume that all or any part of an inferred mineral resource
exists or is economically or legally mineable. Disclosure of contained ounces
in a resource is permitted disclosure under Canadian regulations; however the
SEC normally only permits issuers to report mineralization that does not
constitute reserves by SEC Industry Guide 7 standards as in place tonnage and
grade without reference to unit measures.

Accordingly, information contained in this Annual Report on
Form 20-F and the documents incorporated by reference herein contain
descriptions of our mineral deposits that may not be comparable to similar
information made public by U.S. companies subject to the reporting and
disclosure requirements under the United States federal securities laws and the
rules and regulations thereunder.

NI 43-101 Definitions

|Mineral resource   | Refers to a concentration or occurrence of natural,
      solid, inorganic or fossilized organic material in or on the Earths crust
      in such form and quantity and of such a grade or quality that it has
      reasonable prospects for economic extraction. The location, quantity,
      grade, geological characteristics and continuity of a mineral resource are
      known, estimated or interpreted from specific geological evidence and
      knowledge.                                                                                                                                                                                                                                                         
|-------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|                     | The terms mineral resource, measured mineral
      resource, indicated mineral resource and inferred mineral resource
      used in this annual Form 20-F are Canadian mining terms as defined in
      accordance with NI 43-101 under the guidelines set out in the CIM
      Standards.                                                                                                                                                                                                                                                                                                                                                                                                                                
|                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|Measured resource  | Refers to that part of a mineral resource for which
      quantity grade or quality, densities, shape and physical characteristics
      are so well established that they can be estimated with confidence
      sufficient to allow the appropriate application of technical and economic
      parameters, to support production planning and evaluation of the economic
      viability of the deposit. The estimate is based on detailed and reliable
      exploration, sampling and testing information gathered through appropriate
      techniques from locations such as outcrops, trenches, pits, workings and
      drill holes that are spaced closely enough to confirm both geological and
      grade continuity.
|                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|Indicated resource | Refers to that part of a mineral resource for which
      quantity, grade or quality, densities, shape and physical characteristics
      can be estimated with a level of confidence sufficient to allow the
      appropriate application of technical and economic parameters, to support
      mine planning and evaluation of the economic viability of the deposit. The
      estimate is based on detailed and reliable exploration and testing
      information gathered through appropriate techniques from locations such as
      outcrops, trenches, pits, workings and drill holes that are spaced closely
      enough for geological and grade continuity to be reasonably assumed.                               

---

NI 43-101 Definitions

|Inferred resource | Refers to that part of a mineral resource for which
      quantity and grade or quality can be estimated on the basis of geological
      evidence and limited sampling and reasonably assumed, but not verified,
      geological and grade continuity. The estimate is based on limited
      information and sampling gathered through appropriate techniques from
      locations such as outcrops, trenches, pits, workings and drill holes.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Mineral reserve   | Refers to the economically mineable part of a measured or
      indicated mineral resource demonstrated by at least a preliminary
      feasibility study. The study must include adequate information on mining,
      processing, metallurgical, economic, and other relevant factors that
      demonstrate, at the time of reporting, that economic extraction can be
      justified. A mineral reserve includes diluting materials and allowances
      for losses that might occur when the material is mined.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                    | Mineral reserves are categorized as follows on the basis
      of the degree of confidence in the estimate of the quantity and grade of
      the deposit.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Proven reserve    | Means, in accordance with CIM Standards, for the part of
      a deposit which is being mined, or which is being developed and for which
      there is a detailed mining plan, the estimated quantity and grade or
      quality of that part of a measured mineral resource for which the size,
      configuration and grade or quality and distribution of values are so well
      established, and for which economic viability has been demonstrated by
      adequate information on engineering, operating, economic and other
      relevant factors, so that there is the highest degree of confidence in the
      estimate. This definition for differs from the standards in the United
      States, where proven or measured reserves are defined as reserves which
      (a) quantity is computed from dimensions revealed in outcrops, trenches,
      workings or drill holes; (b) grade and/or quality are computed from the
      results of detailed sampling and (c) the sites for inspection, sampling
      and measurement are spaced so closely and the geographic character is so
      well defined that size, shape, depth and mineral content of reserves are
      well established.
|                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Probable reserve  | Means, in accordance with CIM Standards, the estimated
      quantity and grade or quality of that part of an indicated mineral
      resource for which economic viability has been demonstrated by adequate
      information on engineering, operating, economic and other relevant
      factors, at a confidence level which would serve as a basis for decisions
      on major expenditures. This definition for differs from the standards in
      the United States, where probable mineral reserves are defined as reserves
      for which quantity and grade and/or quality are computed from information
      similar to that of proven reserves (under United States standards), but
      the sites for inspection, sampling, and measurement are further apart or
      are otherwise less adequately spaced, and the degree of assurance,
      although lower than that for proven mineral reserves, is high enough to
      assume continuity between points of observation. The degree of assurance,
      although lower than that for proven mineral reserves, is high enough to
      assume continuity between points of observation.                                                     

GLOSSARY OF TECHNICAL TERMS

In this annual report on Form 20-F, the following technical
terms have the following meanings:

|CIM          | Canadian Institute of Mining, Metallurgy and Petroleum.                                                                                                                                                                            
|-------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|               |                                                                                                                                                                                                                                    
|Dore         | A compound containing gold and silver metal and various
      impurities.                                                                                                                                                          
|               |                                                                                                                                                                                                                                    
|g/t or gpt | Grams per tonne. One gram per tonne equals 0.02917 troy
      ounces per short ton.                                                                                                                                                
|               |                                                                                                                                                                                                                                    
|NI 43-101    | National Instrument 43-101 - Standards of Disclosure
      for Mineral Projects. An instrument developed by the Canadian
      Securities Administrators (an umbrella group of Canadas provincial and
      territorial securities

---

|                   | regulators) that governs public disclosure by mining and
      mineral exploration issuers. The instrument establishes certain standards
      for all public disclosure of scientific and technical information
      concerning mineral projects.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|------------------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|Ore              | A natural aggregate of one or more minerals which, at a
      specified time and place, may be mined and sold at a profit, or from which
      some part may be profitably separated.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|Qualified Person | Conforms to that definition under NI 43-101 for an
      individual (a) to be an engineer or geoscientist with at least five years
      experience in mineral exploration, mine development or operation or
      mineral project assessment, or any combination of these; (b) with
      experience relevant to the subject matter of the mineral project and the
      technical report; and (c) is a member in good standing of a professional
      association that, among other things, is self-regulatory, has been given
      authority by statute, admits members based on their qualifications and
      experience, requires compliance with professional standards of competence
      and ethics and has disciplinary powers to suspend or expel a member.
|                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|SG               | Specific gravity, a measurement of density.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|tpd              | Tonnes per day. One tonne equals 1.10231 tons.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|TSX              | The Toronto Stock Exchange.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

Conversion Factors

To Convert
      From
    To
    Multiply ByFeet
    Metres
    0.305Metres
    Feet
    3.281Miles
    Kilometres (km)
    1.609Kilometres
    Miles
    0.6214Acres
    Hectares (ha)
    0.405Hectares
    Acres
    2.471Grams
    Ounces
      (Troy)
    0.03215Grams/Tonnes
    Ounces
      (Troy)/Short Ton
    0.02917Tonnes (metric)
    Pounds
    2,205Tonnes (metric)
    Short
      Tons
    1.1023


CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 20-F and exhibits attached hereto
contain forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995 and Canadian securities laws. Such
forward-looking statements concern the Companys plans for its properties,
operations and other matters. These statements relate to analyses and other
information that are based on forecasts of future results, estimates of amounts
not yet determinable and assumptions of management. Statements concerning
estimates of mineral resources and reserves may also be deemed to constitute
forward-looking statements to the extent that they involve estimates of the
mineralization that will be encountered if the property is developed, and in the
case of mineral reserves, such statements reflect the conclusion based on
certain assumptions that the mineral deposit can be economically exploited. Any
statements that express or involve discussions with respect to predictions,
expectations, beliefs, plans, projections, objectives, assumptions or future
events or performance (often, but not always, using words or phrases such as
expects or does not expect, is expected, anticipates or does not
anticipate, plans, estimates or intends, or stating that certain actions,
events or results may, could, would, might or will be taken, occur or
be achieved) are not statements of historical fact and may be forward-looking
statements. Forward-looking statements are subject to a variety of risks and
uncertainties, which could cause actual events or results to differ from those
reflected in the forward-looking statements, including, without limitation:

- risks related to gold price and other commodity price fluctuations;
- risks and uncertainties relating to the interpretation of drill results,
  the geology, grade and continuity of mineral deposits;
- risks related to the inherent uncertainty of production and cost estimates
  and the potential for unexpected costs and expenses;

---

- results of initial feasibility, prefeasibility and feasibility studies, and
  the possibility that future exploration, development or mining results will
  not be consistent with the Companys expectations;
- mining and development risks, including risks related to accidents,
  equipment breakdowns, labour disputes or other unanticipated difficulties with
  or interruptions in production;
- the potential for delays in exploration or development activities or the
  completion of feasibility studies;
- the uncertainty of profitability based upon the Companys history of
  losses;
- risks related to failure to obtain adequate financing on a timely basis and
  on acceptable terms;
- risks related to environmental regulation and liability;
- political and regulatory risks associated with mining and exploration; and
- other risks and uncertainties related to the Companys prospects,
  properties and business.

This list is not exhaustive of the factors that may affect our
forward-looking statements. Some of the important risks and uncertainties that
could affect forward-looking statements are described in this Annual Report on
Form 20-F under Description of the Business  Risk Factors. Should one
or more of these risks and uncertainties materialize, or should underlying
assumptions prove incorrect, actual results may vary materially from those
described in forward-looking statements. Forward-looking statements are made
based on managements beliefs, estimates and opinions on the date the statements
are made and the Company undertakes no obligation to update forward-looking
statements if these beliefs, estimates and opinions or other circumstances
should change except as required by law. Investors are cautioned against
attributing undue certainty to forward-looking statements.

---

PART 1

In this document, references to we, our, us, the
Company or Pacific Rim mean Pacific Rim Mining Corp. and its subsidiaries,
including Pac Rim Cayman, LLC (Pac Rim), Pacific Rim El Salvador S.A. de C.V.
(PRES), Dorado Exploraciones S.A. de C.V. (DOREX), unless the context of the
sentence clearly suggests otherwise.

ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND
ADVISORS

Not applicable.

ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable.

ITEM 3. KEY INFORMATION

A.          
Selected Financial Data

The following table presents selected financial information.
The Company prepares its financial statements, which are filed with this report
on Form 20-F, in accordance with Canadian generally accepted accounting
practices (GAAP), and they may be subject to Canadian auditing and auditor
independence standards. They may not be comparable to financial statements of
United States companies. There are no quantitative differences between Canadian
GAAP and United States GAAP.

The following selected data has been extracted from the more
detailed financial statements included herein, including the Companys audited
consolidated financial statements prepared under Canadian GAAP. The selected
financial data is qualified in its entirety by, and should be read in
conjunction with, the financial statements and notes thereto as well as
managements discussion and analysis of results of operations.

Year Ended April 30 
        (in thousands of US Dollars)2009
      2008
      2007
      2006
      2005Loss from 
        Continuing 
        Operations
      (9,443)
      (15,657)
      (13,326)
      (7,566)
      (6,949)Net Income (loss)
      (6,276)
      (12,734)
      (9,417)
      (618)
      (4,634)Income (loss) per 
        common share from 
        continued 
        operations  Basic 
        and Diluted
      (0.08)
      (0.13)
      (0.12)
      (0.09)
      (0.08)Income (loss) per 
        common share  
        Basic and Diluted
      (0.05)
      (0.11)
      (0.09)
      (0.01)
      (0.06)Total Assets
      8,187
      18,270
      21,494
      24,909
      8,618


---

Year Ended April 30 
        (in thousands of US Dollars)2009
      2008
      2007
      2006
      2005Net Assets
      6,508
      12,161
      16,637
      22,035
      5,539Cash Dividend per share
      N/A
      N/A
      N/A
      N/A
      N/AShares outstanding(1)
      118,033,642
      116,915,460
      109,781,960
      105,590,960
      80,642,194Total shareholders Equity
      6,508
      12,161
      16,637
      22,035
      5,539


(1)Number of common shares issued and outstanding

Outstanding Share Data

The following table outlines the common shares outstanding at
and subsequent to the year end to July 22, 2009:

Number of Common Shares
    Number of Options
    Number of WarrantsBalance on April 30, 2009
    118,033,642
    9,065,000
    7,261,350Issued or Exercised subsequent to year end
    16,666
      issued
    16,666
      exercised
    nilBalance on July 22, 2009
    118,050,308
    9,048,333
    7,261,350


Currency and Exchange Rates

Unless otherwise indicated, all dollar amounts in this annual
report on Form 20-F are in United States dollars. The exchange rate of Canadian
dollars into United States dollars, on July 24 2009, based on the noon rate of
exchange as quoted by the Bank of Canada was U.S.$1.00 = $1.08.

Exchange
        Rates for Previous Six MonthsFor the
        Month ended
      High
      LowApril 2009
      1.2707
      1.1875March 2009
      1.3066
      1.2192February 2009
      1.2731
      1.2160January 2009
      1.2765
      1.1761December 2009
      1.3008
      1.1872November 20009
      1.2952
      1.1477


Exchange
        Rates for Previous Five Financial Years ended December 31For the Year
        Ended
      AverageDecember 31, 2008
      1.06601429December 31, 2007
      1.07478127December 31, 2006
      1.13409360December 31, 2005
      1.21163240


---

B.          
Capitalization and indebtedness

Not applicable.

C.          
Reason for the offer and use of proceeds

Not applicable.

D.          
Risk Factors

An investment in the common shares of the Company involves a
high degree of risk and must be considered highly speculative due to the nature
of the Companys business and the present stage of exploration and development
of its mineral resource properties.

Failure to successfully address the risks and uncertainties
described below could have a material adverse effect on the Companys business,
financial condition and/or results of operations, and the trading price of the
Companys shares may decline and investors may lose all or part of their
investment.

The principal activity of the Company is mineral exploration,
which is inherently risky. Exploration is also capital intensive, and with its
sale of the assets related to its 49% interest in the Denton-Rawhide joint
venture during fiscal 2009, the Company has no source of income. The risk
factors that could affect the Companys future results include, but are not
limited to, those items discussed below.

In particular, the following risk factors apply:

History of Losses

The Company has a history of losses and may continue to incur
losses for the foreseeable future. As of April 30, 2009, the Company had an
accumulated deficit of $81.1 million. With the fiscal 2009 sale of its
Denton-Rawhide asset, the Company has no source of revenue and there can be no
assurance that the Company will realize revenue growth or achieve profitability
in the future.

Financing Risks

The Companys sources of financing include current cash and
cash equivalents and bullion balances. The Company utilizes these funding
sources to finance its exploration activities and general and administrative
expenses. Additional financing will likely be required in the coming fiscal year
in order to meet the Companys immediate and long term exploration and general
and administrative costs. Furthermore, current working capital balances are not
sufficient to fund mine development activities at the El Dorado property, should
the Company receive the permits allowing it to undertake these activities. There
can be no assurance that the Company's exploration programs will result in
locating additional commercially exploitable mineral ores or that the Companys
properties will be successfully developed. There can also be no assurance that
the underlying assumed levels of expenses will prove to be accurate.

There is no assurance that additional funding will be available
to the Company in the future to conduct long term exploration and development of
its projects or to fulfill its obligations under any applicable agreements.
Although the Company has been successful in the past in obtaining financing
through the sale of its securities, there can be no assurance that it will be
able to obtain adequate financing in the future or that the terms of such
financing will be favourable. Failure to obtain such additional financing could
result in the Companys failure to remain a going concern or cause the delay or
indefinite postponement of further exploration and development of its projects
with a possible loss of some 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-

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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.

The 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

Exploration, Development and Operating Risks

Resource exploration, development, and operation is a highly speculative business that involves significant risks, which even a combination of careful evaluation, experience and knowledge may not eliminate. While the discovery of precious metals and
other minerals may result in substantial rewards, few properties that are explored are ultimately developed into producing mines. Major expenses may be required to locate and establish economically viable mineral deposits, to develop metallurgical
processes and to construct mining and processing facilities at a particular site. It is impossible to ensure that the exploration or development programs planned by the Company will result in a profitable commercial mining operation. The potential
for any project to eventually become an economically viable operation depends on numerous factors including: the quantity and quality of the minerals discovered if any, the proximity to infrastructure, metal and mineral prices (which vary
considerably over time) and government regulations. The exact effect these factors can have on any given exploration property can not accurately be predicted but the effect can be materially adverse.

Except for the El Dorado Project, on which a pre-feasibility study was completed in 2005, none of the Company's properties have a known body of ore and the Companys proposed exploration programs are an exploratory search for ore.

Although mineral resource estimates included in this document (and/or in previous regulatory documents filed by the Company) have been carefully calculated, prepared, reviewed and/or verified by independent mining experts who are Qualified Persons,
and have been reviewed by the Company, these amounts are estimates only and no assurance can be given that any particular level of recovery of gold and/or silver from mineral resources or previously disclosed reserves will in fact be realized or
that an identified mineral resource will ever qualify as a commercially mineable (or viable) ore body which can be legally and economically exploited. Estimates of mineral resources and reserves, production and capital costs can also be affected by
such factors as environmental permitting regulations and requirements, weather, environmental factors, unforeseen technical difficulties, unusual or unexpected geological formations and work interruptions. In addition, the grade of ore ultimately
mined may differ from that indicated by drilling results. There can be no assurance that the percentage of gold recovered in small scale laboratory tests will be duplicated in large scale tests under on-site conditions or in production scale ore
recovery.

The El Dorado Project is the Companys principal exploration property, which along with its secondary grassroots exploration projects Santa Rita and Zamora-Cerro Colorado, is located in El Salvador.  As with most jurisdictions, El Salvador
imposes certain requirements and obligations on the owners of exploratory properties including application requirements, periodic reporting requirements, limited terms and certain fees and royalty payments. The Company may acquire interests in
properties in other North, Central and South American countries that may place substantial restrictions on the Companys exploratory and development activities. There can be no assurance that additional significant restrictions will not be
placed on the Company's existing or future properties or its operations. Such restrictions may have a material adverse effect on the Companys business and results of operation.

Mining operations generally involve a high degree of risk. The Companys operations are subject to all of the physical hazards and risks normally encountered in the exploration, development and production of precious metals and other minerals
including unusual or unexpected geological formations, seismic activity, rock bursts, cave-ins, flooding and other conditions involved in the drilling and removal of material, any of which could result in damage to or destruction of documents,
samples or drill core, damage to life or property, environmental damage and possible legal liability. It may not be possible to insure against these risks, or for economic reasons the Company may elect not to insure against these risks. The payment
of liabilities as a result of the occurrence of any of these hazards may have a material adverse effect on the Companys financial position.

There can be no assurance that the Companys exploration and acquisition programs will yield new reserves to expand current resources. The development of the Companys properties will require the commitment of substantial financial
resources to conduct the time-consuming exploration and development of properties. There can be no assurance that the Company will generate any additional revenues or achieve profitability.

Reliability of Mineralization Estimates

Although the Company has assessed the mineral resource estimates presented herein and mineral resource and reserve estimates documented in other regulatory filings, and believes that the methods used to estimate such mineral reserves and mineral
resources are

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appropriate, such figures are estimates. As well, estimates of mineral reserves and mineral resources are inherently imprecise and depend to some extent on statistical inferences drawn from limited drilling, which may prove unreliable. Furthermore,
no assurances can be given that the indicated level of recovery of gold or other minerals will be realized. Market price fluctuations of gold or other minerals may render reserves and deposits containing relatively lower grades of mineralization
uneconomic. Moreover, short-term operating factors relating to the mineral reserves, such as the need for orderly development of the deposits or the processing of new or different grades, may cause mining operations to be unprofitable in any
particular period.

Definitional standards for reporting mineralized material differ between United States reporting standards and the Canadian standards use in this annual report

We use the terms measured resources, indicated resources and inferred resources in this annual report on Form 20-F to comply with reporting standards in Canada.  We advise U.S. investors that while those terms are
recognized and required by Canadian regulations, the United States Securities and Exchange Commission (SEC) does not recognize them.  While we have converted a portion of these reserves to proven and probable under Industry Guide 7
reserves, US investors are cautioned not to assume that any part or all of the additional mineral deposits in these categories will ever be converted into mineral reserves. These terms have a great amount of uncertainty as to their existence, and
great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of measured mineral resources, indicated mineral resources, or inferred mineral resource will ever be upgraded to a higher category. In
accordance with Canadian rules, estimates of inferred mineral resources cannot form the basis of a feasibility study or other economic evaluations. Investors are cautioned not to assume that any part of the reported measured mineral resource,
indicated mineral resource, or inferred mineral resource in this Annual Report is economically or legally mineable. See Cautionary Note to U.S. Investors Regarding Resource and Reserve Estimates above.

Title to Properties

PRES has applied for an exploitation concession over a portion of its El Dorado Project exploration licence area and has carried out the studies required by the authorities for this concession, including an environmental impact study
(EIS). The approval of the El Dorado EIS by the Salvadoran Ministry of Environmental Natural Resources (MARN) is a requirement for approval of the exploitation concession by the Ministry of Economy. The Company cannot say
with certainty if or when the authorities in El Salvador will approve the El Dorado EIS or grant PRES an exploitation concession.  The exploitation concession application area covers ground protected by an exploration licence granted to PRES that
nominally expired in January 2005. Legal opinions secured by the Company indicate that El Salvadoran administrative laws and procedures assure PRES exclusive rights to the proposed exploitation concession area while the application is in process,
despite the underlying exploration licence having expired.  There can be no assurance however that this opinion will not be challenged by regulatory authorities or other third parties and that PRESs legal rights to explore within the
exploitation concession application area will be upheld indefinitely pending the outcome of the application process.

The Companys exploration properties may be subject to prior unregistered agreements or transfers or local land claims and title may be affected by undetected defects. The Company has investigated and believes it has good title to its
properties. However, there is no guarantee that adverse claims to title will not arise in the future, nor can the Company express an opinion on how difficult the resolution of such claims would be under the laws of foreign jurisdictions.

Government Law, Environmental and Other Regulatory Requirements

The Companys El Dorado, Zamora-Cerro Colorado and other exploration projects are located in El Salvador and the Company holds or may acquire exploration properties in other North, Central and South American countries.  Mineral exploration and
mining activities in foreign countries are subject to risks normally associated with the conduct of business in foreign countries and in addition its business activities may be affected in varying degrees by political stability and government
regulations as these evolve in sovereign nations.  These risks may include foreign labour disputes, invalidation of governmental orders, uncertain political and economic environments, war or civil disturbances, changes in laws, changes in foreign
exchange rates, regulations and policies of governments, changes in foreign tax laws, delays in obtaining necessary permits, limitations on the repatriation of earnings and original investments and increased costs of and difficulty in obtaining
financing.

Currency fluctuations, exchange controls, change to tax regimes and political action could impair the value of the Companys assets in the foreign jurisdictions in which the Company operates.

Mining operations have inherent risks and liabilities associated with possible pollution of the environment and with the disposal of waste products occurring as a result of mineral exploration or the production of metals from producing mines. Laws
and regulations involving the protection and remediation of the environment and governmental policies and regulations for the implementation of such laws and regulations are constantly changing and are, in general, becoming more restrictive and more
costly to abide by. There may be costs and delays associated with compliance with these laws or regulations that could prohibit the Company from the development or

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expansion of a mine. Mine closure and reclamation cost requirements could change from current estimates.

PRES has experienced significant delays in the processing of its El Dorado EIS and exploitation concession application, and as a result initiated an action against the Government of El Salvador under the Central America-Dominican Republic-United
States of America Free Trade Agreement (CAFTA) international trade treaty. There can be no assurance that PRES will be successful in either obtaining its sought-after El Dorado exploitation concession, or that any legal challenges Pac
Rim has undertaken or that the Company or its subsidiaries may choose to undertake in the future to resolve this issue will be successful.

Metal Price Volatility

Approximately one half of the Companys current working capital balance is held in bullion. The conversion of this bullion to cash, as well as the Company's ability to generate profits from any future mining operations, is directly related to
the international price of gold, which is outside the Companys control. The gold price has a history of extreme volatility and there can be significant upward or downward movements in price in a short period of time. Gold prices historically
have fluctuated widely and are influenced by a number of factors beyond the control or influence of the Company. Some factors that affect the price of gold include: industrial and jewellery demand; central bank lending or purchases or sales of gold
bullion; forward or short sales of gold by producers and speculators; future level of gold production; and rapid short-term changes in supply and demand due to speculative or hedging activities by producers, individuals or funds. Gold prices are
also affected by macroeconomic factors including: confidence in the global monetary system; expectations of the future rate of inflation; the availability and attractiveness of alternative investment vehicles; the general level of interest rates;
the strength of, and confidence in the U.S. dollar, the currency in which the price of gold is generally quoted, and other major currencies; global and regional political or economic events; and costs of production of other gold producing companies
whose costs are denominated in currencies other than the U.S. dollar.

Dependence on Management

The success of the operations and activities of the Company is dependent to a significant extent on the efforts and abilities of a small number of skilled and experienced executives and personnel. Due to the small size of the Company, the loss of
any of these key persons or the inability of the Company to attract and retain additional highly-skilled employees may adversely affect its business and future operations. The Company does not maintain key employee insurance on any of its employees.

Conflicts of Interest

The Companys directors and officers may serve as directors or officers of other resource companies or have significant shareholdings in other resource companies and, to the extent that such other companies may participate in ventures in which
the Company may participate, the directors of the Company may have a conflict of interest in negotiating and concluding terms respecting the extent of such participation. In the event that such a conflict of interest arises at a meeting of the
Companys directors, a director who has such a conflict will declare their potential conflict and abstain from voting for or against the approval of such participation or such terms. From time to time several companies may participate in the
acquisition, exploration and development of natural resource properties thereby allowing for their participation in larger programs, permitting involvement in a greater number of programs and reducing financial exposure in respect of any one
program. It may also occur that a particular company will assign all or a portion of its interest in a particular program to another of these companies due to the financial position of the company making the assignment.  In accordance with the laws
of British Columbia, the directors of the Company are required to act honestly, in good faith and in the best interests of the Company. In determining whether or not the Company will participate in a particular program and the interest therein to be
acquired by it, the directors will primarily consider the degree of risk to which the Company may be exposed and its financial position at that time.

Competition for Other Assets

Significant and increasing competition exists for the limited number of gold acquisition opportunities available worldwide. As a result of this competition, some of which is with large established mining companies having substantial capabilities and
substantially greater financial and technical resources than the Company, the Company may be unable to acquire future potential gold mining properties on terms it considers acceptable. The Company also competes with other mining companies in the
recruitment and retention of qualified employees.

Increased costs could affect our financial condition.

We anticipate that costs at our projects that we may explore or develop, will frequently be subject to variation from one year to the next due to a number of factors, such as changing ore grade, metallurgy and revisions to mine plans, if any, in
response to the physical shape and location of the ore body. In addition, costs are affected by the price of commodities such as fuel, rubber and electricity. Such

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commodities are at times subject to volatile price movements, including increases that could make production at certain operations less profitable. A material increase in costs at any significant location could have a significant effect on our
profitability.

A shortage of equipment and supplies could adversely affect our ability to operate our business.

We are dependent on various supplies and equipment to carry out our mine and development operations. The shortage of such supplies, equipment and parts could have a material adverse effect on our ability to carry out our operations and therefore
limit or increase the cost of production.

Currency Fluctuations May Affect the Costs of Doing Business

The Companys offices and primary activities are currently located in Canada, the United States, and El Salvador. Gold and silver are sold in international markets at prices denominated in U.S. dollars.  However, some of the costs associated
with the Company's activities in Canada may be denominated in currencies other than the U.S. dollar. Any appreciation of these currencies vis-a-vis the U.S. dollar could increase the Company's cost of doing business in these countries. In addition,
the U.S. dollar is subject to fluctuation in value vis-a-vis the Canadian dollar. The Company does not utilize hedging programs to mitigate the effect of currency movements.

Insurance Coverage May Be Inadequate

The Company has purchased liability insurance that it believes is appropriate for the level of risk incurred, however there are no guarantees that the level of coverage of existing policies can or will be maintained.  Furthermore, the Company does
not carry insurance for political risk, nor environmental damage or pollution because such coverage cannot be purchased at reasonable costs. This lack of insurance coverage could result in material economic harm to the Company if a significant claim
against the Company should occur.

Reclamation Risks at Denton-Rawhide

During fiscal 2009 the Company sold the assets it held through its 49% interest in the Denton-Rawhide joint venture to its 51% partner Kennecott Rawhide Mining Company (see Item 4). As part of the sale of its interest in Denton-Rawhide, the Company
has provided a guarantee on 49% of any reclamation and closure costs in the event that these expenditures were to exceed $7.0 million subsequent to the date of the sale. The Coordinating Committee of the Denton-Rawhide mine estimates total
reclamation and severance costs for the Denton-Rawhide mine of $9.8 million.  $4.5 million in reclamation and severance costs have already been incurred, leaving an estimated $5.3 million to be expended in the future.

This estimate may not be a true reflection of actual reclamation and closure costs of the Denton-Rawhide mine and the Company may recognize a potential future reclamation liability, as per the terms of its sale as described above, should actual
reclamation and closure costs exceed $7.0 million in excess of reclamation and severance costs incurred prior to the date of the sale (October 30, 2008).

Costs and Compliance Risks as a Result of Being a Public Company

Legal, accounting and other expenses associated with public company reporting requirements have increased significantly in the past few years. The Company anticipates that general and administrative costs associated with regulatory compliance will
continue to increase with recently adopted corporate governance requirements, including requirements under the Sarbanes-Oxley Act of 2002, as well as new rules implemented by the United States Securities and Exchange Commission, Canadian
Securities Administrators, the NYSE Amex and the TSX. The Company expects these rules and regulations to continue to result in significant legal and financial compliance costs and to make some activities more time-consuming and costly. There can be
no assurance that the Company will continue to effectively meet all of the requirements of the regulations to which it must comply, including Sarbanes-Oxley Section 404 and National Instrument 52-109of the Canadian Securities
Administrators. Any failure to effectively implement new or improved internal controls, or to resolve difficulties encountered in their implementation, could harm the Companys operating results, cause the Company to fail to meet reporting
obligations or result in management being required to give a qualified assessment of the Companys internal controls over financial reporting or the Companys independent auditors providing an adverse opinion regarding managements
assessment. Any such result could cause investors to lose confidence in the Companys reported financial information, which could have a material adverse effect on the Companys stock price. The Company also expects these rules and
regulations may make it more difficult and more expensive for it to obtain director and officer liability insurance, and it may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or
similar coverage. As a result, it may be more difficult for the Company to attract and retain qualified individuals to serve on its board of directors or as executive officers. If the Company fails to maintain the adequacy of its internal controls,
the Company's ability to provide accurate financial statements and comply with the requirements of the Sarbanes-Oxley Act of 2002 and/or National Instrument 52-109of the Canadian Securities Administrators could be impaired, which
could cause the Company's stock price to decrease.

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Environmental Risks and Hazards

The Companys exploration, development and operational activities are subject to environmental regulation in the various jurisdictions in which it operates. These regulations mandate, among other things, the maintenance of air and water quality
standards and land reclamation.  They also set forth limitations on the generation, transportation, storage and disposal of solid and hazardous waste. Environmental legislation is evolving in a manner that will require stricter standards and
enforcement, increased fines and penalties for non-compliance, more stringent environmental assessments of proposed projects and a heightened degree of responsibility for companies and their officers, directors and employees. There is no assurance
that future changes in environmental regulation, if any, will not adversely affect the Companys operations.  Environmental hazards may also exist on the Companys properties that are currently unknown to the Company and that have been
caused by previous or existing owners or operators of the properties.

Environmental approvals and permits are currently, and may in the future, be required in connection with the operations of the Company.  To the extent that such approvals are required and not obtained, the Company may be curtailed or prohibited from
continuing in its exploration, development or mining activities or from proceeding with its exploration or development plans for current properties.

Failure to comply with applicable laws, regulations and permitting requirements may result in enforcement actions that cause exploration, development or mining activities to cease or be curtailed and may include corrective measures requiring capital
expenditures or remedial actions. In such an event, the Company could be required to compensate those suffering loss or damage by reason of the Companys activities and may have civil or criminal fines or penalties imposed for violations of
applicable laws or regulations.

Amendments to existing environmental laws and regulations governing exploration, development and mining activities of mining companies, or more stringent application of current laws and regulations could have a material adverse impact on the Company
causing increases in exploration expenses, capital expenditures or production costs, or a reduction in production levels at producing operations, or require abandonment or delays in development of new mining properties.

Future Sales of Common Shares by Existing Shareholders

The sale of a large number of common shares of the Company in the public markets, or the potential for such sales, could decrease the trading price of the Companys common shares and could negatively impact the Companys ability to raise
capital through future sales of common shares.

We anticipate that we will raise additional capital through equity financing, which may cause substantial dilution to our existing shareholders.

We may require additional equity financing be raised in the future.  We may issue securities on less than favorable terms to raise sufficient capital to fund our business plan. Any transaction involving the issuance of equity securities or
securities convertible into common shares would result in dilution, possibly substantial, to present and prospective holders of common shares.

Foreign Private Issuer Status

The Company is currently designated a foreign private issuer as defined in Rule 3b-4 under the U.S. Securities and Exchange Act of 1934, as amended, for the purposes of U.S. securities law. Although more than 50% of its voting securities
are held by U.S. residents, the Company still qualifies for foreign private issuer status by meeting the following conditions: (i) a majority of its executive officers or directors are non-U.S. citizens or residents, (ii) more than 50% of its assets
are located outside the U.S., and (iii) the business of the Company is principally administered outside the U.S. The Company may in the future lose its foreign private issuer status if it fails to meet any of the aforementioned criteria.

The regulatory and compliance costs to the Company under U.S. securities laws as a U.S. domestic issuer may be significantly more than the costs the Company incurs as a Canadian foreign private issuer. If the Company is not a foreign private issuer
it would be required to file periodic and current reports and registration statements on U.S. domestic issuer forms with the SEC, which are more detailed and extensive than the forms available to a foreign private issuer. In addition, the Company
may lose the ability to rely upon exemptions from the NYSE Amex corporate governance requirements that are available to foreign private issuers. This could have a materially adverse impact on the Companys corporate overhead costs and its
ability to raise future financing.

You may be unable to enforce U.S. judgments against us or our officers and directors

We are incorporated under the laws of the Province of British Columbia, Canada. The majority of our directors are resident in Canada. Consequently, it may be difficult for United States investors to affect service of process within the United States
upon us or upon those

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directors or officers who are not residents of the United
States, or to realize in the United States upon judgments. Judgments of United
States courts predicated upon civil liabilities may be enforceable in Canada by
a Canadian court if the U.S. court in which the judgment was obtained had
jurisdiction, as determined by the Canadian court, in the matter. There is
substantial doubt whether an original action could be brought successfully in
Canada against any of such persons or the Company predicted solely upon such
civil liabilities.

Recent market events and conditions

In 2007, 2008 and into 2009, the U.S. credit markets began to
experience serious disruption due to a deterioration in residential property
values, defaults and delinquencies in the residential mortgage market
(particularly, sub-prime and non-prime mortgages) and a decline in the credit
quality of mortgage backed securities. These problems led to a slow-down in
residential housing market transactions, declining housing prices, delinquencies
in non-mortgage consumer credit and a general decline in consumer confidence.
These conditions continued and worsened in 2008, causing a loss of confidence in
the broader U.S. and global credit and financial markets and resulting in the
collapse of, and government intervention in, major banks, financial institutions
and insurers and creating a climate of greater volatility, less liquidity,
widening of credit spreads, a lack of price transparency, increased credit
losses and tighter credit conditions. Notwithstanding various actions by the
U.S. and foreign governments, concerns about the general condition of the
capital markets, financial instruments, banks, investment banks, insurers and
other financial institutions caused the broader credit markets to further
deteriorate and stock markets to decline substantially. In addition, general
economic indicators have deteriorated, including declining consumer sentiment,
increased unemployment and declining economic growth and uncertainty about
corporate earnings.

These unprecedented disruptions in the current credit and
financial markets have had a significant material adverse impact on a number of
financial institutions and have limited access to capital and credit for many
companies. These disruptions could, among other things, make it more difficult
for us to obtain, or increase its cost of obtaining, capital and financing for
its operations. The Companys access to additional capital may not be available
on terms acceptable to it or at all.

General economic conditions

The recent unprecedented events in global financial markets
have had a profound impact on the global economy. Many industries, including the
gold and base metal mining industry, are impacted by these market conditions.
Some of the key impacts of the current financial market turmoil include
contraction in credit markets resulting in a widening of credit risk,
devaluations and high volatility in global equity, commodity, foreign exchange
and precious metal markets, and a lack of market liquidity. A continued or
worsened slowdown in the financial markets or other economic conditions,
including but not limited to, consumer spending, employment rates, business
conditions, inflation, fuel and energy costs, consumer debt levels, lack of
available credit, the state of the financial markets, interest rates, and tax
rates may adversely affect our growth and profitability. Specifically:

- The global credit/liquidity crisis could impact the cost and availability
  of financing and our overall liquidity;
- the volatility of the gold price may impact our future revenues, profits
  and cash flow;
- volatile energy prices, commodity and consumables prices and currency
  exchange rates impact potential production costs; and
- the devaluation and volatility of global stock markets impacts the
  valuation of our equity securities, which may impact our ability to raise
  funds through the issuance of equity.

These factors could have a material adverse effect on our
financial condition and results of operations.

**ITEM 4.****INFORMATION ON THE
COMPANY**

A.          
History and Development of the Company

The legal and commercial name of the Company is Pacific Rim
Mining Corp..

The Company was formed by the amalgamation of Dayton Mining
Corporation (Dayton) and Pacific Rim Mining Corp. (Pacific Rim) on April 11,
2002 under the former Company Act (British Columbia).

Effective March 29, 2004, the British Columbia legislature
enacted the Business Corporations Act (British Columbia) (the New Act)
and repealed the former Company Act (British Columbia) which previously
governed the Company. The New Act removed many of the restrictions contained in
the former act, including restrictions on the residency of directors, the place
of annual general meetings and limits on authorized share capital. The New Act
also uses new forms and terminology. Under the New Act, every company
incorporated, amalgamated or continued under the former act must complete a
mandatory transition rollover under the New Act to substitute a Notice of
Articles for its Memorandum within two years of March 29, 2004, after which
existing articles may be

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altered to take advantage of new provisions contained in the
New Act. Under the New Act, the directors of the Company were permitted to
approve and complete this mandatory transition rollover and, accordingly, the
Company filed a transition application with the British Columbia Registrar of
Companies effective July 26, 2004. At the annual general meeting held on
September 22, 2004, the Companys shareholders approved the removal of
pre-existing company provisions that applied to the Company relating to
restrictions in the former act and no longer required under the New Act. In
addition, the shareholders approved new articles to bring the Companys charter
documents into line with the New Act and, as permitted by the New Act, altered
the authorized capital of the Company from 1,000,000,000 common shares without
par value to an unlimited number of common shares without par value and the
alteration of the Notice of Articles. The changes were effected and the British
Columbia Registrar of Companies issued a new Notice of Articles on January 20,
2005.

The Company is domiciled in British Columbia, Canada and is a
company organized under the New Act. The Companys principal place of business
is located at Suite 1050, 625 Howe Street, Vancouver, British Columbia, V6C 2T6
and its registered and records office is located on the 10th Floor,
595 Howe Street, Vancouver, British Columbia, V6C 2T5. The Company through its
subsidiaries has administration offices in Nevada and El Salvador.

Additional sources of information regarding Pacific Rim Mining
Corp. include: information available on SEDAR (www.sedar.com) including the Companys unaudited
interim financial statements published quarterly, and the Companys Annual
Information Form; the Companys 20-F filing (available at www.sec.gov); and, the Companys corporate website
www.pacrim-mining.com and Spanish-language
informational website (www.pacificrim.com.sv).

B.          
Business overview

Pacific Rim is an environmentally and socially responsible
exploration company focused exclusively on high grade, environmentally clean
gold deposits in the Americas. Pacific Rims primary asset and focus of its
growth strategy is the high grade, vein-hosted El Dorado gold project in El
Salvador. The Company owns several similar grassroots gold projects in El
Salvador and is actively seeking additional assets elsewhere in the Americas
that fit its project focus.

Pacific Rims shares trade under the symbol PMU on both the
Toronto Stock Exchange (TSX) and the NYSE Amex (NYX).

All references to Pacific Rim or the Company encompass the
Canadian corporation, Pacific Rim Mining Corp, and its U.S. and Salvadoran
subsidiaries, Pac Rim Cayman LLC, Pacific Rim El Salvador, S.A. de C.V., and
Dorado Exploraciones, S.A. de C.V., inclusive.

Significant Events During Fiscal 2009

Significant technical and corporate events that occurred during
the twelve months ended April 30, 2009 include:

- In July 2008 the Company suspended drilling activity at its El Dorado
  project and commenced the lay off of El Salvador-based staff, having made the
  decision to reduce its El Salvador exploration and investment activity until
  such time as the Government of El Salvador grants a mining permit for the El
  Dorado project. The El Dorado project is described in Section 3.1, with a
  discussion of permitting issues provided in Section 3.1.4.
- In September 2008 the Company continued to reduce its overhead costs by
  cutting staffing levels in its Vancouver office and making additional cuts to
  full-time staff and contract employees in El Salvador and cancelling service
  contracts for numerous activities including community social programs. The
  Vancouver staff reductions included Peter Neilans, COO and April Hashimoto,
  CFO. The Companys President and CEO concurrently took a voluntary pay cut to
  further reduce general and administrative expenses related to executive
  compensation. These cuts were a response to difficult market conditions and
  ongoing delays in obtaining environmental and mining permits for the El Dorado
  project.
- In October 2008 the Company sold the assets it held through its 49%
  interest in the Denton-Rawhide joint venture to its 51% partner Kennecott
  Rawhide Mining Company. Total compensation for these assets consisted of US
  $3.1 million plus 49% of all gold and silver production from the
  Denton-Rawhide operation through to December 31, 2008. Details of the sale are
  presented in Section 4.
- In November 2008 the Company appointed Steven Krause, CA, CPA (Illinois) to
  the position of Chief Financial Officer (CFO) of the Company. Mr. Krause is
  a founder and principal of Avisar Chartered Accountants and brings to the
  Company his expertise based on fourteen years of accounting, audit and
  management experience related to public exploration and mining companies.
- In April 2009 Pac Rim Cayman LLC (Pac Rim), a Nevada corporation and a
  wholly-owned subsidiary of Pacific Rim, filed international arbitration
  proceedings against the Government of El Salvador (the Government) 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-

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- In May 2008 the Company restarted work on the El Dorado gold project feasibility
    study, which had been put on hold in March 2007 in order to drill define the
    Balsamo gold deposit, quantify its gold resources and include them in the
    feasibility study. However, in February 2009 the Company decided to defer
    completion of the El Dorado feasibility study in order to allow a number of
    issues, including the overhanging uncertainty in the timing of the El Dorado
    permitting process, to resolve. The El Dorado feasibility study is addressed
    further in Section 3.1.3.

Current Market Status

The Company has recognized the current status of capital markets and the difficulty in raising additional capital. During fiscal 2009, the Company made significant cuts to its Vancouver and El Salvador offices and staff, which have reduced general
and administrative costs in both locations, and continues to look for opportunities to reduce its expenditures in order to extend its working capital.

The business of mining and exploration involves a high degree of risk and as of January 1, 2009, the Company no longer has a source of precious metal production (as per the terms of sale of the Denton-Rawhide assets described in Section 4 below) and
will be entirely reliant on its current cash and cash equivalents, sale of minor gold and silver bullion balances, and future financings in order to fund legal, exploration and administration expenses. There can be no assurance that such financing
will be available or be available on favourable terms, particularly considering current market conditions for issuance of capital.

El Dorado Gold Project, El Salvador

The Companys principal exploration property and sole material property is the El Dorado gold project, located in El Salvador approximately 65 kilometres northeast of the capital city San Salvador, and is Pacific Rims flagship
advanced-stage exploration property. Pacific Rim, through Pac Rim and PRES, owns 100% of the El Dorado project. The El Dorado project comprises a 144 square kilometre area covered by three exploration licences with nominal expiry dates of September
28, 2013 (one licence) and September 29, 2013 (two licences) and a 12.75 square kilometre area pending conversion to an exploitation concession, which underlying exploration licence has a nominal expiry date of January 1, 2005. In accordance with
Salvadoran Law, PRES presented a request for the conversion of this 12.75 square kilometre portion of the El Dorado exploration licences to an exploitation concession in December 2004. The conversion process is currently pending ministerial
acceptance of PRESs EIS and issuance of environmental permits. Salvadoran administrative laws and procedures give PRES exclusive rights to the exploitation concession area while the permitting process is underway.

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.

In July 2008 (the first quarter of fiscal 2009), the Company suspended all drilling activity at the El Dorado project. This decision was made in order to preserve capital and substantially reduce Pacific Rims El Salvador investment activity
while the El Dorado permitting issue remains unresolved. As a result, the Company restricted its exploration activities in El Salvador and elsewhere to low-cost surface exploration work and community and environmental initiatives, primarily during
the first few months of fiscal 2009, and did not conduct any significant exploration work to further advance the El Dorado project during the remainder of fiscal 2009.

A full feasibility study for the El Dorado project was initiated in fiscal 2007 following the discovery and delineation of the South Minita deposit but before the discovery of the Balsamo deposit. In late fiscal 2007 the Company elected to defer
completion of the study in order to include the resources being drilled at the newly discovered Balsamo deposit in addition to the Minita and South Minita resources. During fiscal 2009 work on the El Dorado project feasibility study, including an
underground mine plan for the Minita, South Minita and Balsamo deposits, processing facility and tailings impoundment designs, and an economic analysis of the proposed combined operation, was restarted under the direction of SRK Consulting.  In its
2008 Annual Report the Company anticipated the El Dorado feasibility study would be completed during the 2009 fiscal year.

However, in February 2009 the Company decided to again defer completion of the feasibility study, in this case because of: unpredictability in capital costs as changes in commodity prices due to recent economic volatility become reflected in the
prices for capital items; the Companys focus on saving cash until these inputs have stabilized and the study can accurately reflect changed economic realities; and, uncertainty in the timing of the El Dorado permitting process.

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The Company believes recent economic volatility will continue in the short term and that capital costs and commodity values will remain in a state of flux for the coming months, a position echoed by numerous industry analysts. Pacific Rim intends to
complete the feasibility study when the El Dorado permit issue is clarified and capital costs stabilize.

The Company drastically reduced its exploration expenditures during fiscal 2009, which primarily affected exploration work at the El Dorado project. Nonetheless, virtually all of the $5.3 million the Company spent on direct exploration costs
during fiscal 2009 was expended on the El Dorado project, primarily on completing the logging, sampling and cataloguing of core drilled at El Dorado prior to July 2008, work related to the feasibility study, community initiatives, security and
non-recurring expenditures related to reductions in activity. The Company does not intend to contemplate resuming significant exploration work at the El Dorado project until such time as the environmental permit is received and the exploitation
concession is granted. The Company intends to continue exploration activities and make expenditures required to keep the El Dorado property in good standing during fiscal 2010.

CAFTA Action Initiated

In April 2009, Pac Rim filed international arbitration proceedings against the Government of El Salvador (the Government) under CAFTA in its own name and on behalf of its two wholly-owned El Salvadoran enterprises, PRES and DOREX
(collectively the Enterprises).  A Notice of Intent to commence international arbitration proceedings had previously been filed by Pac Rim in December 2008. Pac Rim has retained the Washington, DC-based international law firm of Crowell
& Moring, LLP to represent it in the arbitration and is seeking an award of damages in the hundreds of millions of dollars from the Government for its multiple breaches of international and Salvadoran law.

Basis of Claim

Since 2002, PRES and later DOREX have been exploring, discovering, and delineating gold deposits in El Salvador. As a result of these efforts and at the initial invitation and encouragement of the Government, Pac Rim and the Enterprises have
developed precious metal assets and acquired rights that are significantly higher in value than the to-date investment that has already been made in El Salvador. Pac Rim and the Enterprises have operated in full compliance with Salvadoran law,
including the countrys environmental, mining and foreign investment laws, and have met or exceeded all applicable standards while conducting business in El Salvador. Ample evidence, however, demonstrates that the Government has failed to
fulfill its obligations vis-à-vis Pac Rim and the Enterprises.

Pac Rims claims under CAFTA are based on the Governments breaches of international and Salvadoran law, arising out of the Governments improper failure to finalize the permitting process as it is required to do and to respect Pac
Rims and the Enterprises legal rights to develop mining activities in El Salvador. This conduct by the Government has resulted in a significant loss to both Pac Rim, the Enterprises, and the local communities, and has unnecessarily
delayed normal development of these valuable deposits.

Pacific Rims mandate to its shareholders is to build a gold mining company that explores and develops gold deposits in an environmentally responsible manner. In meeting its responsibilities, a mine design for PRESs El Dorado gold project
located in the department of Cabañas, was submitted to the Government in its final form more than two and a half years ago. Despite strong local support and the inclusion of carefully engineered and reliable environmental protections for the
proposed El Dorado Mine, the Government has not met its responsibility to issue PRES the permits necessary to advance the project to the final step of full production.

Arbitration Process

With its filing on April 30, 2009, Pac Rim formally commenced arbitration against the Government of El Salvador under CAFTA. The arbitration will be administered under the Convention on the Settlement of Investment Disputes Between States and
Nationals of Other States and 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.
Once an arbitral tribunal is constituted, the length of the ensuing proceedings may range from approximately two to three years.

Other Properties

Pacific Rims exploration activities elsewhere in El Salvador during the past fiscal year included an extensive surface vein trenching program and a limited drilling program at the Santa Rita project as well as geological mapping, sampling and
target generation programs at both Santa Rita and the Companys Zamora-Cerro Colorado project. Because they are early stage exploration projects, without defined resources, neither the Santa Rita nor the Zamora-Cerro Colorado projects are
considered material to the Company.

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Santa Rita Gold Project, El Salvador

The Santa Rita gold project is located in central El Salvador,
immediately northwest of the El Dorado project. The Santa Rita exploration
licence was staked by the Companys subsidiary PRES in July 2005 after its
regional reconnaissance program in El Salvador resulted in the discovery of
gold-bearing quartz-calcite boulders. Subsequent to the end of fiscal 2009, the
Santa Rita exploration licence expired and was immediately re-staked by the
Companys subsidiary DOREX. DOREX is currently awaiting approval of the new
Santa Rita exploration licence.

PRES discovered an epithermal quartz-calcite vein system at
Santa Rita in fiscal 2006. Two distinct veins were originally discovered and
surface rock channel samples collected from along the length of one of these,
the 2+ kilometre long Trinidad vein, which returned anomalous gold (between 6.4
g/t gold and 118.3 g/t over vein widths of 1 to 2 metres) at various localities
along its length. In late fiscal 2006 PRES received a permit from MARN to
conduct a drill program on the Santa Rita gold project. However, during fiscal
2007 the Company stepped back from exploration work at Santa Rita when the
project became the target of anti-mining protests. Exploration work at Santa
Rita resumed during fiscal 2008 and continued into fiscal 2009.

During this most recent exploration campaign, PRES discovered
several new veins on the Santa Rita property that significantly expanded the
prospective target area, and undertook a surface trenching and sampling program
that revealed the Trinidad vein to be significantly wider than previously
understood.

In addition to the surface exploration work described above,
during fiscal 2009 PRES undertook a short drill program that tested the Trinidad
vein system over a strike length of approximately 500 metres. This program was
carried out in a low impact, low visibility manner. It was also conducted at
that specific time primarily in order to satisfy work requirements necessary to
maintain PRESs legal tenure of the Santa Rita licences. In the end 9 shallow
holes were drilled on the Trinidad vein, the results of which confirmed that the
Trinidad vein extends to below surface and contains anomalous gold. Further
drill testing is clearly warranted.

Notwithstanding the excellent exploration potential
demonstrated to date at the Santa Rita project, exploration activities were
curtailed in July 2009 in keeping with the Companys decision to significantly
reduce its investment in El Salvador until such time as the El Dorado
environmental permit is received and the exploitation concession is granted.
DOREX is currently awaiting receipt of approval of its application for the new
Santa Rita exploration licence. If as and when this licence application is
approved and DOREXs tenure at Santa Rita is re-established, the Company intends
to resume low cost exploration activities and make expenditures required to keep
the Santa Rita licence in good standing.

Zamora-Cerro Colorado Gold Project, El Salvador

During fiscal 2006 Pacific Rim signed an agreement to acquire a
100% interest in the Zamora gold project in El Salvador from a consortium of
private companies, which was amended in fiscal 2007 to include additional
exploration licences known as Cerro Colorado.

The schedule of advanced royalty payments required to maintain
the Companys option to purchase the Zamora-Cerro Colorado property, as per the
amended agreement is:

Upon TSX approval of the amended agreement:
    100,000 shares plus 100,000
      warrants of the Company (shares issued)Yearly advanced
      royalty payments:
    The greater of:First anniversary
    100,000 shares or $100,000 in
      shares of the Company (shares issued)Second anniversary
    140,000 shares or $140,000 in
      shares of the Company (shares issued)Third anniversary
    200,000 shares or $200,000 in
      shares of the Company (shares issued)Fourth anniversary
    300,000 shares or $300,000 in
      shares of the CompanyFifth and subsequent anniversaries
    400,000 shares or $400,000 in
      shares of the Company


The above advanced royalty payment schedule applies to both the
Zamora and Cerro Colorado exploration license options and supersedes the
original agreement terms. As per the terms of the revised agreement, advanced
royalty payments as outlined above will continue until production is achieved or
the exploration concessions expire. Title to 100% of the Cerro Colorado and
Zamora exploration licenses is to be transferred to Pacific Rim 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 sellers are
entitled to receive a 3% net smelter royalty to a maximum of $10 million
(inclusive of the dollar value of the advanced royalty payments made).

The Zamora and Cerro Colorado claims comprise a 125 square
kilometre land package located 50 kilometres north of San Salvador, in El
Salvador. The Company has staked additional ground between the Cerro Colorado
and Zamora licences it optioned in order to cover what the Company believes is a
large gold-bearing epithermal system situated on the same regional gold belt
that hosts PRESs El Dorado

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and Santa Rita gold systems in El Salvador and a number of million-plus ounce gold systems in Guatemala. The Company has not yet received confirmation that the licences it staked in fiscal 2008 and early fiscal 2009 have been formally granted.

During early fiscal 2009 the Company continued its regional geological mapping and prospecting work within the Zamora and Cerro Colorado exploration licence areas, concentrating on trenching across known gold-bearing veins.

Despite the positive exploration results the Company has generated to date on the Zamora-Cerro Colorado project, further exploration activities were curtailed in July 2009 in keeping with the Companys decision to significantly reduce its
investment in El Salvador until such time as the El Dorado environmental permit is received and the exploitation concession is granted. The Company intends to continue exploration activities an make expenditures required to keep the Zamora-Cerro
Colorado licences in good standing during fiscal 2010.

Generative Program

Pacific Rims project generation initiatives focus on acquiring projects the Company believes have good exploration potential without incurring onerous costs. The Company focuses solely on low-sulfidation epithermal gold systems, which are
environmentally-clean, high grade, and low cost.

In late fiscal 2008 the Company shifted the focus of its highly successful grassroots exploration initiatives out of El Salvador. Using its unique understanding of epithermal gold systems in the Central American Gold Belt, particularly within El
Salvador, Pacific Rim has been very successful in locating new, high grade gold-bearing systems and is ideally equipped to apply this formula for discovery to neighbouring jurisdictions.

The Company has filed for two large exploration concessions
  in the Las Juntas de Abongares and La Union mining districts in Costa Rica.
  These projects host epithermal vein systems with significant historic gold production.
  No significant exploration work was conducted on the Costa Rica properties during
  fiscal 2009. The Company also conducted field evaluations of numerous prospects
  in Guatemala during fiscal 2009 but did not acquire any projects in that jurisdiction.

The Company identified two advanced-stage exploration projects during fiscal 2009 that fit its exploration criteria; one in the United States and one in Chile. The Company commenced field and legal due diligence work during fiscal 2009, which is
ongoing on both projects. There are no guarantees however that this due diligence work will result in a positive outcome or that the Company will be successful in negotiating acquisition of either or both projects.

Sale of Mining Operations

Through its merger with Dayton in 2002 and until late October 2008, Pacific Rim was 49% owner in the Denton-Rawhide residual leach gold operation, located near Fallon, Nevada. On October 29, 2008 the Company announced that it had accepted an offer
from its Denton-Rawhide joint venture partner, Kennecott Rawhide Mining Company (Kennecott), to purchase the net assets the Company holds through its 49% interest in the joint venture. Total compensation for these net assets included
$3.1 million plus 49% of all gold and silver production from the Denton-Rawhide operation through to December 31, 2008 net of cash production costs. Readers are referred to the Companys news release of October 29, 2008 (available at
www.pacrim-mining.com) for further information about the sale of the Denton-Rawhide assets. The Company was entitled to and received 49% of the gold and silver production from Denton-Rawhide (up to and including
all gold and silver produced to December 31, 2008 only) as per the terms of sale described above. No further gold or silver production from Denton-Rawhide will be forthcoming to the Company.

Pacific Rims share of gold and silver produced from the Denton-Rawhide operation during fiscal 2009 (between May and December 31, 2008) was 6,350 ounces of gold and 55,666 ounces of silver. The fair market value of this gold and silver when
received was $4.1 million which was offset by $4.6 million in production costs paid to Kennecott. The unsold amounts of gold and silver are included in bullion on the balance sheet as at April 30, 2009.

Competition

The mineral property exploration and development business, in general, is intensively competitive and there is not any assurance that even if commercial quantities of ore are discovered, a ready market will exist for sale of same. Numerous factors
beyond our control may affect the marketability of any substances discovered. These factors include market fluctuations; the proximity and capacity of natural resource markets and processing equipment; and government regulations, including
regulations relating to prices, taxes, royalties, land tenure, land use, importing and exporting of mineral and environmental protection. The exact effect of these factors cannot be accurately predicted, but the combination of these factors may make
it difficult for us to receive an adequate return on investment.

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We compete with many companies possessing greater financial
resources and technical facilities for the acquisition of mineral concessions,
claims, leases and other mineral interests as well as for the recruitment and
retention of qualified employees.

Seasonality

There are no seasonal affects on our mineral properties.

C.          
Organizational Structure

The Company has the following material subsidiary companies:

Name
    Jurisdiction of incorporation or
      organization
    Percent of voting shares owned by the
      CompanyPacific Rim Exploration Inc.
    Nevada, USA
    100% indirectly owned through Pac Rim
      Cayman LLCDayton Mining
      (U.S.) Inc. (1)
    Nevada, USA
    100%
      directly ownedPac Rim Cayman LLC
    Nevada, USA
    100%
      directly ownedPacific Rim El Salvador S.A. de C.V. (2)
    El Salvador
    100% indirectly owned through Pac Rim
      Cayman LLCDorado Exploraciones SA de C.V. (3)
    El Salvador
    100% indirectly owned through Pac Rim
      Cayman LLC


| | (1) | This subsidiary held the Companys 49% interest in the
      Denton-Rawhide joint venture.                                                                                                                                                                                                                             
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (2) | This subsidiary holds the Companys interest in the El
      Dorado exploration licence that is under application for conversion to an
      exploitation concession.                                                                                                                                                  
| | (3) | This subsidiary holds the Companys interests in the El
      Dorado exploration licences, and the Zamora-Cerro Colorado project claims
      not included in the Zamora-Cerro Colorado option agreement, and has
      applied for new exploration licences to cover the Santa Rita project, all
      in El Salvador.

Unless the context otherwise indicates, reference to the term
the Company in this Annual Report on Form 20-F includes Pacific Rim Mining
Corp. and its subsidiaries.

D.          
Property, Plant and Equipment

Mineral Properties

The Company is a British Columbia based mineral resource
corporation engaged, through its subsidiaries, in the acquisition, exploration
and, if warranted, development of precious metals properties, primarily gold and
silver.

The Company is principally involved in the exploration for
high-grade epithermal gold and silver deposits in the Americas. The Companys
sole material project is the El Dorado gold project in El Salvador. In addition,
the Company owns or is in the process of acquiring two early stage exploration
projects in El Salvador and one early stage exploration project in Costa Rica
and continues to search for exploration projects to acquire in the Americas that
meet its exploration focus.

El Salvador Properties

El Salvador Mining Regime

The following is based on the Companys understanding of the El
Salvador mining regime.

Under the laws of El Salvador, the government owns all mineral
rights. All private and government-owned lands that have not been declared areas
of protection for reasons of national sovereignty, areas of cultural or social
interest, areas of ecological or environmental protection or areas of capitation
of surface or underground waters for potable water supply; zones occupied by
public service facilities; or areas that are within the urban limit of cities or
towns are open to exploration and are available through application for an
exploration license, which can subsequently be converted to an exploitation
concession upon compliance with certain conditions. An exploration license is
held by payment of an annual fee, compliance with the environmental laws of the
country and fulfilment of the technical exploration program, which may be
modified on an annual basis. El Salvadorian mining laws do not discriminate
between nationals and foreigners.

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El Salvadors current mining law, which was enacted in 1996 and last amended in 2001, governs the provisions for granting of exploration licences and exploitation concessions. By granting an exploitation concession, the El Salvadoran Ministry
of Economys Department of Hydrocarbons and Mines confers upon the applicant the right to produce and sell valuable commodities recovered from the natural resources within the area of the concession. To be granted an exploitation concession,
which is a necessary step to commencing mining extraction activities, an environmental permit based on an Environmental Impact Study (EIS) must first be approved by the Salvadoran Ministry of Environment and Natural Resources
(MARN). The applicant must also satisfy a number of other conditions. Once granted, the concession requires that development activities commence within 12 months of the date of the final concession agreement and that the mine and
associated facilities be built and operated in accordance with the conditions of the environmental permit.

El Dorado Property, El Salvador

The Companys most advanced property in El Salvador is the El Dorado Property, which consists of three exploration licenses (contiguous to and completely surrounding the pending exploitation concession area), which the Company, indirectly
through its wholly-owned subsidiaries, holds as to a 100% interest.

The information presented below summarizes information prepared under the supervision of Mr. Steven Ristorcelli, P.Geo., of Mine Development Associates. This information is included in a report entitled Technical Report Update on the El Dorado
Project Gold and Silver Resources dated March 3, 2008 co-authored by Mr. Ristorcelli and Mr. Peter Ronning, P.Eng. each of whom are independent Qualified Persons as defined in NI 43-101. Information presented under the headings Recent
Developments, January 2008 Updated Resource Estimate, Environmental Impact Study and Mining Permit CAFTA Action and Summary has been updated by the Company to reflect developments that have
occurred since March 3, 2008, being the date of the most recent El Dorado Technical Report.

Predecessor Dayton upon its acquisition of Mirage Resource Corp. in April 2000 acquired the El Dorado Property.  Mirage initially acquired the El Dorado Property by option agreement dated June 23, 1993 from Zinc Metal Company
(ZMC) of Toronto, and its wholly-owned subsidiary, New York and El Salvador Mining Company. The option was exercised on August 25, 1994 in accordance with its terms by payment of $175,000 to ZMC and by the parties having
incurred aggregate expenditures in excess of $800,000. Pursuant to the terms of the option agreement, the El Dorado Property is subject to annual advance minimum royalty payments, which are the greater of $50,000 per year or a 3% net smelter
return royalty in favour of ZMC. The Company has the right to purchase the royalty from ZMC for $4,000,000 ($1,000,000 for the first one-half and $3,000,000 for the second one half) provided that at least one-half of the royalty is
acquired within six months of the commencement of commercial production. In addition, the government of El Salvador is entitled to a 2% net smelter return royalty.

By agreement dated March 29, 2006, the Company superseded an option agreement dated November 14, 2003 to acquire a parcel of land suitable for mineral exploitation activities within the El Dorado exploration licence area. Under the terms of the new
agreement, the Company has prepaid an annual rental fee in the amount of $29,000 with the option to purchase the parcel for a payment of $971,000 at any time up to April 1, 2007. During fiscal 2007 the Company commenced the process of
exercising its option to purchase one of the larger parcels of land over which it holds a purchase option agreement (negotiated during fiscal 2004), and advanced to the property owner $0.3 million of the $1.0 million total negotiated option
payment. During fiscal 2008, upon transfer of title in the parcel of land to the Company, the final $0.7 million was paid. Although the El Dorado Property contains geological mineral resources, none of the Companys properties in El
Salvador, including the El Dorado Property, contain known ore reserves (as defined under U.S. Securities and Exchange Commission Guide 7) and all work programs are exploratory searches for ore grade mineralization.

Property Description and Location

The El Dorado Property (see Figures 1 and 2 below) is comprised of three exploration licenses totalling 14,407 hectares with nominal expiry dates of September 28, 2013 (one license) and September 29, 2013 (two licenses), and the 1,275 hectare area
of the pending Exploitation Concession, which underlying exploration license has a nominal expiry date of January 1, 2005. The Company continues to hold the 1,275 hectare pending Exploitation Concession area beyond its expiry date as it has declared
its intention to convert the land holding to an Exploitation Concession, which will have a term of 30 years and may be extended if warranted. See El Salvador Mining Regime above. The cost to hold the licenses is a rental of
$300 per square kilometre, amounting to $47,046 per year. The Company is up to date with the regulatory obligations required to maintain the licenses in good standing and is awaiting final approval of the pending exploitation concession.

In addition to its mineral rights, the Company owns approximately 765,000 square metres of real estate in the central part of the El Dorado Property.

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Part of the El Dorado license area was the scene of mining by another company between 1948 and 1953.  The Company and its environmental consultants believe that there are no existing environmental liabilities on the project related to that earlier
period of production nor to the exploration activities of the Company and its predecessor companies.

The exploration license area contains several prospects and deposits. Their stage of exploration and development ranges from recently discovered veins that have never been drilled to deposits that have resource estimates. The Companys
permanent installations on the property at the present time consist of a laboratory for crushing rock samples and core storage warehouses with facilities for describing and sampling drill core. None of the mid-20th century mine workings
are accessible at present.

The El Dorado Property is in the Department of Cabañas, approximately 74 kilometres northeast of San Salvador, the capital city of the nation, and 10 kilometres southwest of the town of Sensuntepeque.

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Figure 1: Location of the El Dorado property in El Salvador.

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Figure 2: El Dorado property licence area.

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Accessibility, Climate, Local Resources, Infrastructure and Physiography

The El Dorado Property is accessible by a paved road that crosses the El Dorado Property. The travel time from the project site to San Salvador is approximately two and one-half hours, depending on traffic levels.

The area has a large rural population and Sensuntepeque is a moderate sized town of approximately 20,000 people. Unskilled labour and persons with general business and technical skills should be readily available. El Salvador does not have an
indigenous mining industry, so personnel with exploration and mining skills need to be trained or come from elsewhere.

The usual public utilities are available in Sensuntepeque.  The communication infrastructure, including telephone and internet, is serviceable. The existing buildings on the project site are connected to the national electrical grid, but the power
supply is not considered reliable enough to service a mine.

The terrain in the El Dorado Property area is one of moderate relief surrounded by higher hills to the north, east, and west. Elevations range between 200 m and 800 m above sea level. A tropical climate prevails, with a pronounced wet season from
May to October and a dry season the remainder of the year. The project area contains shallow topsoils and volcanic subsoils that are cultivated for seasonal crops. Five perennial streams or rivers traverse the El Dorado License area. Water levels
vary with the seasons with good flows being maintained during the wet season.

History

The colonial Spanish discovered gold in the district in the early 1500s, and there was sporadic, largely unrecorded small-scale production until the late 1800s. In the period from 1948 to 1953, the New York and El Salvador Mining Company
operated an underground mine, producing approximately 270,000 tonnes of ore yielding about 72,500 troy ounces (2,250 kilograms) of gold.

Extensive exploration since 1993 has included surface geological mapping, rock sampling and prospecting, campaigns of hand and bulldozer trenching, core drilling, and minor reverse circulation drilling.

Geological Setting

El Salvador can be divided into four morphological-geological units:  Coastal Plains, Coastal Ranges, Great Interior Valley, and the Northern Mountain Ranges. El Dorado is situated in the Great Interior Valley, underlain by Eocene felsic to mafic
volcanic rocks; in other words, dark to light coloured volcanic rocks in the order of 38 to 55 million years old.

Mineralization on the El Dorado Property consists of gold and silver bearing quartz veins that are contained within the volcanic rocks. The gold and silver bearing veins of the El Dorado district, of which at least 36 exceed 1 m in width, occur over
an area exceeding 50 square kilometres.  Vein mineralization is dominated by quartz and calcite and ranges in width between 1 m and 15 m in surface exposures. The vein systems are up to 3 km in length, dip steeply, and generally form ridges.

The mineralization fits the model of the low sulphidation epithermal type of mineralization, also referred to as the adularia-sericite type. A number of deposits around the world that belong to this type are being profitably mined.

In terms of its structure and mineral deposits the Exploration License Area can be divided into 3 districts, Central, Northern, and Southern. The three districts are separated from each other by northwest trending regional scale faults whose primary
displacement was lateral.  Within each district, deposits are contained within quartz veins that formed along fractures that opened under tension.  The mineralized veins are for the most part within about 30 degrees of vertical and trend generally
north-south, but there is considerable variation both within and between districts.

Exploration

The long history of recent exploration on the El Dorado Property includes extensive mapping of mineralized structures, lithogeochemical sampling, trenching and drilling. There have been numerous ancillary studies including environmental base line
work.

Geological mapping to varying levels of detail, done by the Company and its predecessors, covers approximately 2,000 hectares of the 14,400 hectare property. Digital maps have been generated at scales ranging from 1:1,000 to 1:10,000. In addition,
the project archives contain numerous individual maps of trenches, veins and target areas at various scales.

The geological mapping is continuing, along with lithogeochemical sampling and prospecting.

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The geological mapping is accompanied by frequent sampling of the rocks on the surface.  The samples are variously described as channel samples, chip channel samples, selected chips, random chips and grab samples.

Mineralization

The El Dorado License area contains many deposits, prospects and occurrences in veins, hot spring deposits and hydrothermal breccias. They are found in three districts, north, central and south, that are distinguished from each other by the dominant
vein orientations and the level of the hydrothermal system that is exposed on the present-day surface. The veins have complex, multi-stage histories of formation.

The dimensions of mineralized veins are as varied as their exploration status, ranging from those known only in single outcrops to those that have been traced on the surface over lengths of between one and two kilometres. Systems of related veins
are up to three kilometres long. In those veins that have been mined or extensively drilled, mineralization has been demonstrated to exist over vertical intervals of up to 300 metres. (In considering vein lengths and vertical dimensions it is
important to note that at a detailed level mineralization in this type of system is highly variable).

Sampling and Analysis

The sampling method used by the Company field personnel varies with the purpose of the sample.  Geologists doing initial reconnaissance or prospecting may collect selected grab samples from new discoveries.  Such samples would be intended only to
determine if minerals of interest are present, not to estimate grades for any volume of material.

For more systematic sampling, outcrops are cleaned off and in some cases shallow hand trenches are dug. Continuous chip samples are collected over intervals selected by a geologist. In many cases local labourers do the sampling, under a
geologists supervision. The manner of sampling is recorded in field notes and is entered into the digital database of surface samples.

Intervals from drill core to be sampled are selected by the geologist logging the core. All vein material and visibly mineralized material is sampled, with enough immediately adjacent, apparently unmineralized material sampled to make sure that all
intervals are adequately tested. Sampling is done after logging is complete. The core is sawn in half along its axis. The Companys immediate predecessor as operator, Dayton, also used a rock saw for sampling core from 13 holes it drilled in
2000. Operators prior to Dayton used a percussion core splitter.

Core recovery, which affects the degree to which samples are representative, is very good in the current drilling. In mineralized intervals it averages better than 98%. In past drilling, prior to the Company becoming operator, resource estimators
found local problems with core recovery, finding that it averaged as low as 76% in some mineralized veins.

The Company collected a large quantity of unmineralized material from a site in the region. This material is used as sample blanks that are inserted into the sample stream at a rate of one into every batch of 25 samples, as a quality
control measure.

All of the Companys samples are analyzed at the laboratory of Inspectorate America in Sparks, Nevada. About 25% of the samples are analyzed in duplicate by selecting a batch of material already pulverized by Inspectorate and sending it to
another lab, American Assay. Once the results of the re-analysis are received, about 15% to 20% of the duplicated samples are selected for re-analysis starting with the coarse reject material.

All samples which return gold results exceeding 3 g Au/tonne in the initial analysis are analyzed again using a fire assay preparation with a gravimetric finish.

Security of Samples

All sampling is done by the Companys employees, either geologists or labourers supervised by geologists. Once collected, samples are kept at the Companys on-site facility until they are picked up by employees of Inspectorate
Americas Guatemalan affiliate. They are transported by road to the Guatemalan laboratory, where they are prepared and trans-shipped to Nevada for analysis.  Some of the samples may, from time to time, be opened and inspected by border
officials at the border crossing from El Salvador to Guatemala.

Metallurgy

Metallurgical test work has shown the El Dorado mineralization responds well to milling and cyanide leaching. Recoveries of over 92% for gold and over 88% for silver are expected. Historic recoveries during past production ranged from 87% to 91.5%
for gold and 77.7% for silver.

---

January 2008 Updated Resource Estimate

On January 17, 2008 the Company released the results of an
updated resource estimate for the El Dorado gold project, in which 1.4 million
gold equivalent ounces were tabulated in the Measured and Indicated resource
categories combined and a further 0.3 million gold equivalent ounces were
tabulated in the Inferred category. Full details of the 2008 El Dorado resource
estimate, by deposit and resource category, are presented below.

El
        Dorado Project Resources (as of January 17, 2008)Deposit
      Resource Category
      Tonnes
      Gold Grade (g Au/t)
      Gold Ounces
      Silver Grade (g
        Ag/t)
      Silver Ounces
      Gold EquivalentGrade
        (g AuEq/t)
      Gold Equivalent OuncesBalsamo
      Indicated
      566,700
      9.86
      179,600
      112.95
      2,058,000
      11.47
      209,000Inferred
      281,200
      7.71
      69,700
      76.29
      690,000
      8.80
      79,600Minita
      Measured
      614,100
      12.23
      241,500
      80.59
      1,591,200
      13.39
      264,300Indicated
      1,175,100
      9.65
      364,400
      58.16
      2,197,300
      10.47
      395,700Total
        M&I
      1,789,200
      10.53
      605,900
      65.86
      3,788,500
      11.47
      660,000Inferred
      78,400
      10.39
      26,200
      67.44
      170,000
      11.39
      28,700South
      IndicatedMinita
      
      1,070,900
      9.25
      318,400
      63.99
      2,203,000
      10.16
      349,900Inferred
      302,800
      7.20
      70,100
      48.23
      470,000
      7.89
      76,800Nance Dulce
      Inferred
      128,900
      19.56
      81,100
      121.98
      506,000
      21.30
      88,300Coyotera
      Measured
      166,000
      7.86
      42,100
      57.79
      309,000
      8.69
      46,500Indicated
      501,000
      7.15
      115,200
      58.68
      945,000
      7.99
      128,700Total
        M&I
      667,000
      7.34
      157,300
      58.48
      1,254,000
      8.17
      175,200Inferred
      19,000
      5.83
      3,600
      72.12
      44,000
      6.86
      4,200Nueva Esperanza
      Indicated
      183,000
      5.77
      33,900
      30.47
      179,000
      6.20
      36,400Inferred
      29,000
      4.67
      4,300
      35.49
      33,000
      5.17
      4,800TOTAL MEASURED ALL DEPOSITS
      780,100
      11.31
      283,600
      75.76
      1,900,200
      12.39
      310,800TOTAL INDICATED ALL DEPOSITS
      3,496,700
      9.00
      1,011,500
      67.45
      7,582,300
      9.96
      1,119,700TOTAL MEASURED & INDICATED ALL
        DEPOSITS
      4,276,800
      9.42
      1,295,100
      68.96
      9,482,500
      10.40
      1,430,500TOTAL INFERRED ALL DEPOSITS
      839,300
      9.45
      255,000
      70.89
      1,913,000
      10.47
      282,400Notes:1) Resources based on a gold equivalent cut-off
        grade of 4.0 g AuEq/t and greater than a grade-times-thickness of 4 (g
        AuEq/t x meters)2) Gold
        equivalents based upon a silver to gold ratio of 70:13) Resources for the Minita, South Minita, Nance
        Dulce, Coyotera and Nueva Esperanza deposits are unchanged from the July
        2006 El Dorado Resource Estimate (see NI 43-101 disclosure)


The mineral resource estimates
presented above have been calculated in accordance with National Instrument
43-101 as required by Canadian securities regulatory authorities, which differs
from standards of the U.S. Securities and Exchange Commission (SEC). The
resource estimates contained in this discussion would not be permitted in
reports of U.S. Companies filed with the SEC. See Cautionary Note to U.S.
Investors Regarding Resource and Reserve Estimates above.

---

The resources were estimated by interpreting drill intercepts in cross section, coding samples, capping assays, compositing to vein thicknesses, and estimating grades and thicknesses of each of the veins into three dimensional grade thickness
models. Each of the three veins comprising the Minita resource, ten veins comprising the South Minita resource, and five veins comprising the Balsamo resource were estimated separately. The 4.0 g/t cut-off grade (wherein gold equivalents are based
on a silver to gold ratio of 70:1 and greater than a grade-times-thickness of 4 (g AuEq/t x metres)) is predicated on estimated operating costs of $49.68 per tonne, estimated gold recovery of 90% and a gold price of $400 per ounce. These
parameters stem from the Companys 2005 El Dorado prefeasibility study, the results of which are based on various input estimates related to costs and commodity prices that were current at the time of its publication. Readers are cautioned that
significant changes have occurred in a number of the inputs used in the January 2005 El Dorado prefeasibility study since its publication in January 2005. However, the Company and its consultants elected to maintain the 4.0 g/t gold equivalent
cut-off grade for the 2008 El Dorado resource estimate in order to facilitate comparisons between the current resource estimate and the 2006 resource estimate. Full technical reports related to the 2008 El Dorado resource estimate, the 2006 El
Dorado resource estimate and the 2005 El Dorado pre-feasibility study are publicly available on SEDAR at www.sedar.com.

The foregoing disclosure under January 2008 Updated Resource Estimate is based on information prepared under the supervision of Mr. Steven Ristorcelli, P.Geo., of Mine Development Associates, contained in a report entitled
Technical Report Update on the El Dorado Project Gold and Silver Resources dated March 3, 2008 co-authored by Mr. Ristorcelli and Mr. Peter Ronning, P.Eng. each of whom are independent Qualified Persons as defined in NI 43-101.  This
information has further been reviewed and verified by Mr. William Gehlen, Certified Professional Geologist, a Qualified Person for the purposes of NI 43-101. Mr. Gehlen is the Vice-President of Exploration of the Company and supervises the
Companys exploration work on the El Salvador properties. The Companys sampling procedures follow the Exploration Best Practices Guidelines outlined by the Mining Standards Task Force and adopted by the TSX. Samples have been assayed
using fire assay with a gravimetric finish on a 30-gram split. Quality control measures, including check- and sample standard-assaying, are being implemented. Samples were assayed by Inspectorate America Corporation in Reno, Nevada, an ISO 9002
certified laboratory, independent of the Company.

Recent Developments

In July 2008 (the first quarter of fiscal 2009) the Company suspended all drilling activity at the El Dorado project. This decision was made in order to preserve capital and substantially reduce Pacific Rims El Salvador investment activity
while the El Dorado permitting issue remains unresolved. See Environmental Impact Study and Mining Permit.As a result, the Company restricted its exploration activities in El Salvador and elsewhere to low-cost surface exploration work and
community and environmental initiatives, primarily during the first few months of fiscal 2009, and did not conduct any significant exploration work to further advance the El Dorado project during the remainder of fiscal 2009.

A full feasibility study for the El Dorado project was initiated in fiscal 2007 following the discovery and delineation of the South Minita deposit but before the discovery of the Balsamo deposit. In late fiscal 2007 the Company elected to defer
completion of the study in order to include the resources being drilled at the newly discovered Balsamo deposit in addition to the Minita and South Minita resources. During fiscal 2009 work on the El Dorado project feasibility study, including an
underground mine plan for the Minita, South Minita and Balsamo deposits, processing facility and tailings impoundment designs, and an economic analysis of the proposed combined operation, was restarted under the direction of SRK Consulting.  In its
2008 Annual Report the Company anticipated the El Dorado feasibility study would be completed during the 2009 fiscal year.

However, in February 2009 the Company decided to again defer completion of the feasibility study, in this case because of: unpredictability in capital costs as changes in commodity prices due to recent economic volatility become reflected in the
prices for capital items; the Companys focus on saving cash until these inputs have stabilized and the study can accurately reflect changed economic realities; and, uncertainty in the timing of the El Dorado permitting process.

The Company believes recent economic volatility will continue in the short term and that capital costs and commodity values will remain in a state of flux for the coming months, a position echoed by numerous industry analysts. Pacific Rim intends to
complete the feasibility study when the El Dorado permit issue is clarified and capital costs stabilize.

Environmental Impact Study and Mining Permit

In September 2004, PRES submitted an EIS to MARN for a 750 tonne per day operation based on producing precious metals from the Minita deposit alone. In September 2005, the finalized EIS, which incorporated initial comments from MARN, was resubmitted
to MARN. MARN then conveyed its technical approval of the EIS, and instructed PRES to submit the EIS for public comment, which was carried out in October 2005. In March 2006, PRES received from MARN a list of issues raised during the public comment
period and was asked to amend the EIS to address these and a number of other issues. In October 2006, the amended EIS, which included the requested clarification on a number of items, was resubmitted to MARN. Finally, in December 2006, PRES
submitted a proposal for

---

a water treatment plan in response to additional comments by
MARN.

Nearly three years have passed since the El Dorado EIS was
submitted in its final form to MARN, during which time MARN has failed to take
action on approval of the EIS. This in turn is preventing a resolution to PRESs
exploitation concession application.

CAFTA Action

In April 2009 Pac Rim filed international arbitration
proceedings against the Government of El Salvador (the Government) under CAFTA
in its own name and on behalf of PRES and DOREX (collectively the
Enterprises). A Notice of Intent to commence international arbitration
proceedings had previously been filed by Pac Rim in December 2008. Pac Rim has
retained the Washington, DC-based international law firm of Crowell &
Moring, LLP to represent it in the arbitration and is seeking award of damages
in the hundreds of millions of dollars from the Government for its multiple
breaches of international and Salvadoran law.

Basis
of Claim

Since 2002, PRES and later DOREX have been exploring,
discovering, and delineating gold deposits in El Salvador. As a result of these
efforts and at the initial invitation and encouragement of the Government, Pac
Rim and the Enterprises have developed precious metal assets and acquired rights
that are significantly higher in value than the to-date investment that has
already been made in El Salvador. Pac Rim and the Enterprises have operated in
full compliance with Salvadoran law, including the countrys environmental,
mining and foreign investment laws, and have met or exceeded all applicable
standards while conducting business in El Salvador. Ample evidence, however,
demonstrates that the Government has failed to fulfill its obligations vis-à-vis
Pac Rim and the Enterprises.

Pac Rims claims under CAFTA are based on the Governments
breaches of international and Salvadoran law,
arising out of the Governments improper failure to finalize the permitting
process as it is required to do and to respect Pac Rims and the Enterprises
legal rights to develop mining activities in El Salvador. This conduct by the
Government has resulted in a significant loss to Pac Rim, the Enterprises, and
the local communities, and has unnecessarily delayed normal development of these
valuable deposits.

Pacific Rims mandate to its shareholders is to build a gold
mining company that explores and develops gold deposits in an environmentally
responsible manner. In meeting its responsibilities, a mine design for PRESs El
Dorado gold project located in the department of Cabañas, was submitted to the
Government in its final form more than two and a half years ago. Despite strong
local support and the inclusion of carefully engineered and reliable
environmental protections for the proposed El Dorado Mine, the Government has
not met its responsibility to issue PRES the permits necessary to advance the
project to the final step of full production.

Arbitration Process

With its filing on April 30, 2009, Pac Rim formally commenced
arbitration against the Government of El Salvador under CAFTA. The arbitration
will be administered under the Convention on the Settlement of Investment
Disputes Between States and Nationals of Other States and 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. Once an arbitral tribunal is constituted, the
length of the ensuing proceedings may range from approximately two to three
years.

Summary

The El Dorado gold project is Pacific Rims most advanced
exploration (and sole material) project, has been the primary focus of its
exploration efforts for the past 7 years and the recipient of the bulk of its
exploration expenditures. The project has current estimated resources of 1.4
million gold equivalent ounces in the Measured and Indicated categories combined
plus a further 0.3 million gold equivalent ounces Inferred. Because the average
grade of these resources (approximately 10.5 gold equivalent grams per tonne) is
relatively high, the deposits are expected to be relatively low cost to produce
from underground workings. Importantly, the El Dorado deposits are also
environmentally clean and their production and processing is expected to have a
negligible impact on the local environment. The El Dorado project has delivered
many technical successes however, its path forward to development and operation
has been hampered by excessively lengthy delays in the permitting process on the
part of the Government.

The Company drastically reduced its exploration expenditures
during fiscal 2009, which primarily affected exploration work at the El Dorado
project. Nonetheless, virtually all of the $5.3 million the Company spent on
direct exploration costs during fiscal 2009 was expended on the El Dorado
project, primarily on completing the logging, sampling and cataloguing of core
drilled at El Dorado prior to July 2008, work related to the feasibility study,
community initiatives, security and non-recurring expenditures related to
reductions in activity. The Company does not intend to contemplate resuming
significant exploration work at the El Dorado project until such time as the
environmental permit is received and the exploitation concession is granted. The
Company intends to continue exploration activities and make expenditures
required to keep the El Dorado property in good standing during fiscal 2010.

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Santa Rita Gold Project, El Salvador

There are no known ore reserves on the Santa Rita property and all work programs on the property are exploratory searches for ore grade mineralization.

The Santa Rita gold project is located in central El Salvador, immediately northwest of the El Dorado project. The Santa Rita exploration licence was staked by the Companys subsidiary PRES in July 2005 after its regional reconnaissance program
in El Salvador resulted in the discovery of gold-bearing quartz-calcite boulders.  Subsequent to the end of fiscal 2009, the Santa Rita exploration licence expired and was immediately re-staked by the Companys subsidiary DOREX.  DOREX is
currently awaiting approval of the new Santa Rita exploration licence.

PRES discovered an epithermal quartz-calcite vein system at Santa Rita in fiscal 2006. Two distinct veins were originally discovered and surface rock channel samples collected from along the length of one of these, the 2+ kilometre long Trinidad
vein, which returned anomalous gold (between 6.4 g/t gold and 118.3 g/t over vein widths of 1 to 2 meters) at various localities along its length. In late fiscal 2006 PRES received a permit from MARN to conduct a drill program on the Santa Rita gold
project. However, during fiscal 2007 the Company stepped back from exploration work at Santa Rita when the project became the target of anti-mining protests. Exploration work at Santa Rita resumed during fiscal 2008 and continued into fiscal 2009.

During this most recent exploration campaign, PRES discovered several new veins on the Santa Rita property that significantly expanded the prospective target area, and undertook a surface trenching and sampling program that revealed the Trinidad
vein to be significantly wider than previously understood.

In addition to the surface exploration work described above, during fiscal 2009 PRES undertook a short drill program that tested the Trinidad vein system over a strike length of approximately 500 metres. This program was carried out in a low impact,
low visibility manner. It was also conducted at that specific time primarily in order to satisfy work requirements necessary to maintain PRESs legal tenure of the Santa Rita licences. In the end 9 shallow holes were drilled on the Trinidad
vein, the results of which confirmed that the Trinidad vein extends to below surface and contains anomalous gold. The Company believes that further drill testing is clearly warranted.

Notwithstanding the excellent exploration potential demonstrated to date at the Santa Rita project, exploration activities were curtailed in July 2009 in keeping with the Companys decision to significantly reduce its investment in El Salvador
until such time as the El Dorado environmental permit is received and the exploitation concession is granted. DOREX is currently awaiting receipt of approval of its application for the new Santa Rita exploration licence. If as and when this licence
application is approved and DOREXs tenure at Santa Rita is re-established, the Company intends to resume low cost exploration activities and make expenditures required to keep the Santa Rita licence in good standing.

The foregoing disclosure has been prepared by or under the supervision of William Gehlen, Certified Professional Geologist, a Qualified Person for the purposes of NI 43-101. Mr. Gehlen is the Vice-President of Exploration of the Company. The
Companys sampling procedures follow the Exploration Best Practices Guidelines outlined by the Mining Standards Task Force and adopted by the TSX.  Samples have been assayed using fire assay with a gravimetric finish on a 30-gram split.
Quality control measures, including check- and sample standard-assaying, are being implemented. Samples were assayed by Inspectorate America Corporation in Reno, Nevada, an ISO 9002 certified laboratory, independent of the Company.

Zamora-Cerro Colorado Gold Project, El Salvador

During fiscal 2006 Pacific Rim signed an agreement to acquire a 100% interest in the Zamora gold project in El Salvador from a consortium of private companies, which was amended in fiscal 2007 to include additional exploration licences known as
Cerro Colorado.

The schedule of advanced royalty payments required to maintain the Companys option to purchase the Zamora-Cerro Colorado property, as per the amended agreement is:

---

Upon TSX approval of the amended agreement:
    100,000 shares plus 100,000
      warrants of the Company (shares issued)Yearly advanced
      royalty payments:
    The greater of:First anniversary
    100,000 shares or $100,000 in
      shares of the Company (shares issued)Second anniversary
    140,000 shares or $140,000 in
      shares of the Company (shares issued)Third anniversary
    200,000 shares or $200,000 in
      shares of the Company (shares issued)Fourth anniversary
    300,000 shares or $300,000 in
      shares of the CompanyFifth and subsequent anniversaries
    400,000 shares or $400,000 in
      shares of the Company


The above advanced royalty payment schedule applies to both the
Zamora and Cerro Colorado exploration license options and supersedes the
original agreement terms. As per the terms of the revised agreement, advanced
royalty payments as outlined above will continue until production is achieved or
the exploration concessions expire. Title to 100% of the Cerro Colorado and
Zamora exploration licenses is to be transferred to Pacific Rim 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 sellers are
entitled to receive a 3% net smelter royalty to a maximum of $10 million
(inclusive of the dollar value of the advanced royalty payments made).

The Zamora and Cerro Colorado claims comprise a 125 square
kilometre land package located 50 kilometres north of San Salvador, in El
Salvador. The Company has staked additional ground between the Cerro Colorado
and Zamora licences it optioned in order to cover what the Company believes is a
large gold-bearing epithermal system situated on the same regional gold belt
that hosts PRESs El Dorado and Santa Rita gold systems in El Salvador and a
number of million-plus ounce gold systems in Guatemala. The Company has not yet
received confirmation that the licences it staked in fiscal 2008 and early
fiscal 2009 have been formally granted.

During early fiscal 2009 the Company continued its regional
geological mapping and prospecting work within the Zamora and Cerro Colorado
exploration licence areas, concentrating on trenching across known gold-bearing
veins.

Despite the positive exploration results the Company has
generated to date on the Zamora-Cerro Colorado project, further exploration
activities were curtailed in July 2009 in keeping with the Companys decision to
significantly reduce its investment in El Salvador until such time as the El
Dorado environmental permit is received and the exploitation concession is
granted. The Company intends to continue exploration activities and make
expenditures required to keep the Zamora-Cerro Colorado licences in good
standing during fiscal 2010.

The foregoing disclosure has been prepared by or under the
supervision of William Gehlen, Certified Professional Geologist, a Qualified
Person for the purposes of NI 43-101. Mr. Gehlen is the Vice-President of
Exploration of the Company. The Companys sampling procedures follow the
Exploration Best Practices Guidelines outlined by the Mining Standards Task
Force and adopted by the TSX. Samples have been assayed using fire assay with a
gravimetric finish on a 30-gram split. Quality control measures, including
check- and sample standard-assaying, are being implemented. Samples were assayed
by Inspectorate America Corporation in Reno, Nevada, an ISO 9002 certified
laboratory, independent of the Company.

Nevada Properties

Denton-Rawhide Mine, Nevada

Sale of Mining Operations

Through its merger with Dayton in 2002 and until late October
2008, Pacific Rim was 49% owner in the Denton-Rawhide residual leach gold
operation, located near Fallon, Nevada. On October 29, 2008 the Company
announced that it had accepted an offer from its Denton-Rawhide joint venture
partner Kennecott Rawhide Mining Company (Kennecott) to purchase the net
assets the Company holds through its 49% interest in the joint venture. Total
compensation for these net assets included $3.1 million plus 49% of all gold and
silver production from the Denton-Rawhide operation through to December 31, 2008
net of cash production costs. Readers are referred to the Companys news release
of October 29, 2008 (available at www.pacrim-mining.com) for further information about
the sale of the Denton-Rawhide assets. The Company was entitled to and received
49% of the gold and silver production from Denton-Rawhide (up to and including
all gold and silver produced to December 31, 2008 only) as per the terms of sale
described above. No further gold or silver production from Denton-Rawhide will
be forthcoming to the Company.

Pacific Rims share of gold and silver produced from the
Denton-Rawhide operation during fiscal 2009 (between May and December 31, 2008)
was 6,350 ounces of gold and 55,666 ounces of silver. The fair market value of
this gold and silver when received was $4.1 million which was offset by $4.6
million in production costs paid to Kennecott. The unsold amounts of gold and
silver are included in bullion on the balance sheet as at April 30, 2009.

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Reclamation  Denton-Rawhide

During fiscal 2009 the Company sold the assets it held through
its 49% interest in the Denton-Rawhide joint venture to its 51% partner
Kennecott Rawhide Mining Company (see Item 4). As part of the sale of its
interest in Denton-Rawhide, the Company has provided a guarantee on 49% of any
reclamation and closure costs in the event that these expenditures were to
exceed $7.0 million subsequent to the date of sale.

The Rawhide Joint Venture has put in place ongoing pollution
control and monitoring programs at Denton-Rawhide. A reclamation and closure
plan for Denton-Rawhide has been submitted to the Bureau of Land Management and
the Nevada Department of Environmental Protection and is currently awaiting
approval. Kennecott has estimated a total of $4.9 million in reclamation and
closure costs under the proposed plan. Kennecott, on behalf of the Rawhide Joint
Venture, has posted surety bonds as required for compliance with state and local
closure, reclamation and environmental obligations. Estimated future reclamation
and property closure costs for Denton-Rawhide are based on current legal and
regulatory requirements. Actual costs incurred for reclamation activities in
future periods could differ from the amounts estimated. Additionally, future
changes to environmental laws and regulations could affect the extent of
reclamation and remediation work required to be performed by the Company. Any
such changes in future costs could materially impact the amounts charged to
operations for reclamation and remediation.

The Bureau of Mining Regulation and Reclamation (BMRR), in
cooperation with other state, federal and local agencies regulates mining
activities in Nevada under regulations adopted in 1989. The Nevada
Administrative Code (NAC) 445A.350-NAC 445A.447 and (NAC) 519A.010 - NAC
519A.415 were developed to implement the requirements of the Nevada Revised
Statutes (NRS) 445A.300-NRS 445A.730 and (NRS) 519A.010 - NRS 519A.290. BMRR is
composed of three distinct technical branches: regulation, closure and
reclamation. It is the mission of BMRR to ensure that Nevadas waters are not
degraded by mining operations and that the lands disturbed by mining operations
are reclaimed to safe and stable conditions to ensure a productive post-mining
land use. These laws and regulations are the primary pieces of legislation
governing the Companys reclamation obligations.

Generative Program

Pacific Rims project generation initiatives focus on acquiring
projects the Company believes have good exploration potential without incurring
onerous costs. The Company focuses solely on low-sulfidation epithermal gold
systems, which are environmentally-clean, high grade, and low cost.

In late fiscal 2008 the Company shifted the focus of its highly
successful grassroots exploration initiatives out of El Salvador. Using its
unique understanding of epithermal gold systems in the Central American Gold
Belt, particularly within El Salvador, Pacific Rim has been very successful in
locating new, high grade gold-bearing systems and is ideally equipped to apply
this formula for discovery to neighbouring jurisdictions.

The Company has filed for two large exploration concessions in
the Las Juntas de Abongares and La Union mining districts in Costa Rica. These
projects host epithermal vein systems with significant historic gold production.
No significant exploration work was conducted on the Costa Rica properties
during fiscal 2009. The Company also conducted field evaluations of numerous
prospects in Guatemala during fiscal 2009 but did not acquire any projects in
that jurisdiction.

The Company identified two advanced-stage exploration projects
during fiscal 2009 that fit its exploration criteria: one in the United States
and one in Chile. The Company commenced field and legal due diligence work
during fiscal 2009, which is ongoing on both projects. There are no guarantees
however that this due diligence work will result in a positive outcome or that
the Company will be successful in negotiating acquisition of either or both
projects.

Environmental Matters

U.S. Operations

During fiscal 2009 the Company sold the assets it held through
its 49% interest in the Denton-Rawhide joint venture to its 51% partner
Kennecott Rawhide Mining Company (see Section 4). As part of the sale of its
interest in Denton-Rawhide, the Company has provided a guarantee on 49% of any
reclamation and closure costs in the event that these expenditures were to
exceed $7.0 million.

The Rawhide Joint Venture has put in place ongoing pollution
control and monitoring programs at Denton-Rawhide. A reclamation and closure
plan for Denton-Rawhide has been submitted to the Bureau of Land Management and
the Nevada Department of Environmental Protection and is currently awaiting
approval. Kennecott has estimated a total of $4.9 million in reclamation and
closure costs under the proposed plan. Kennecott, on behalf of the Rawhide Joint
Venture, has posted surety bonds as required for compliance with state and local
closure, reclamation and environmental obligations. Estimated future reclamation
and property

---

closure costs for Denton-Rawhide are based on current legal and
regulatory requirements. Actual costs incurred for reclamation activities in
future periods could differ from the amounts estimated. Additionally, future
changes to environmental laws and regulations could affect the extent of
reclamation and remediation work required to be performed by the Company. Any
such changes in future costs could materially impact the amounts charged to
operations for reclamation and remediation.

The Bureau of Mining Regulation and Reclamation (BMRR), in
cooperation with other state, federal and local agencies regulates mining
activities in Nevada under regulations adopted in 1989. The Nevada
Administrative Code (NAC) 445A.350-NAC 445A.447 and (NAC) 519A.010 - NAC
519A.415 were developed to implement the requirements of the Nevada Revised
Statutes (NRS) 445A.300-NRS 445A.730 and (NRS) 519A.010 - NRS 519A.290. BMRR is
composed of three distinct technical branches; regulation, closure and
reclamation. It is the mission of BMRR to ensure that Nevada's waters are not
degraded by mining operations and that the lands disturbed by mining operations
are reclaimed to safe and stable conditions to ensure a productive post-mining
land use. These laws and regulations are the primary pieces of legislation
governing the Companys reclamation obligations.

International Operations

The Companys exploration properties, primarily located in El
Salvador, are governed by existing local environmental laws, though the Company
elects in certain circumstances to exceed its obligations under local
environmental law and comply with internationally accepted environmental
standards.

The Companys exploration programs are designed according to
industry best practices to have minimal to no impact on flora, fauna and surface
or underground water sources. Temporary disturbances (temporary access roads,
drill pads, mud pits, hand dug trenches, impacts on existing infrastructure) are
reclaimed and repaired. Using the same methods required for structural studies
at dam site and large construction sites, drill holes are capped with either a
50 meter grout cap or are completely filled with grout, depending on the
geologic environment. The temporary access trails, drill pads and mud sumps are
reclaimed by filling in ruts, holes and pits, re-contouring any banks or steep
cuts, building water diversion ditches to control runoff and planting fast
growing, native grasses to stabilize the ground. Trenches are refilled and
replanted in a like manner, and fence barriers are occasionally built to control
livestock movement around reclaimed areas. Permanent or long term disturbances
such as roads, buildings, wells, walls and fences, gates, etc. are constructed
with erosion controls and stability measures including, as necessary, "badenes",
rock retaining walls, water diversion ditches, drain pipes and/or stabilizing
vegetation, and are constructed to standards exceeding local regulation. Often,
local tree varieties are harvested then replanted in the disturbed areas when it
does not conflict with normal local usage. All areas of reclamation and
construction are monitored on an annual basis. If additional repair is required
because of the initial construction, it is repaired until the area gains
stability. The Companys professional environmental staff has volunteered and
assisted the local authorities in evaluating other arms-length environmental,
geologic, hydrologic, disaster sites around the immediate communities by
conducting land slide analysis, ground water studies, surface water studies,
land fill site studies, helping to evaluate other industrial waste sites, fire
prevention, disease control, disaster relief preparedness and first aid.

Contractors to the Company are required to use certified,
non-polluting, non-toxic additives in drilling programs and comply with
international work and safety standards and procedures. These issues are
routinely monitored by Company employees under the direction of the local
environmental and safety managers. Environmental compliance and risk is
regularly assessed by third party contractors specializing in mining and
exploration risk management. In addition, the company has established showcase
programs for environmental protection, waste management and reforestation in
order to educate workers and local populace on common best practice measures for
a healthier, cleaner and safer living and working environment.

Ongoing reclamation activities associated with the Companys
exploration stage properties are expensed as exploration in the period incurred.

Proposed Transactions

Pacific Rim is continually reviewing project acquisitions and
other opportunities that could enhance shareholder value.

There are currently no transactions in process that would
affect the financial condition, results of operations or cash flows of the
Company.

Related Party Transactions

The Company received accounting services from an accounting
firm in which an Officer of the Company is a partner. The total accounting fees
paid were $52,000.

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ITEM 4A. UNRESOLVED STAFF COMMENTS

Not applicable

ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

Critical Accounting Estimates

The preparation of financial statements in conformity with Canadian generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of
contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant areas requiring the use of management estimates include the carrying value of
mineral properties and property, plant and equipment, gold in process inventories, closure costs and stock based compensation. Factors that could affect these estimates include risks inherent in mineral exploration and development, changes in
reclamation requirements, and changes in government policy.

The carrying value of the El Dorado property reflects its acquisition cost, which was based on an estimate of the propertys mineral resource at the time of the acquisition. This resource estimate was filed as a National Instrument 43-101
compliant technical report in February 2002. It has been superseded by subsequent resource estimates, the most recent of which was completed in January 2008.

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.  PRES has experienced lengthy
delays in the government of El Salvadors processing of the El Dorado exploitation concession application with no resolution to date, which, along with other factors beyond the control of PRES, could adversely impact operations in El Salvador
or result in the impairment of the El Dorado property in the future; such impairment could be material. PRES has commenced a legal claim under CAFTA. If PRES is unsuccessful in obtaining a permit for El Dorado or in its CAFTA claim, or other factors
beyond the control of the Company, such factors could adversely impact operations in El Salvador or result in the impairment of the El Dorado property in the future; such impairment could be material. As at April 30, 2009, management of the Company
determined that impairment indicators existed on its El Dorado project and completed an impairment assessment on this project. The current economic environment, the decline in the Companys stock price and the difficulty in obtaining a permit
were considered as impairment indicators. As part of their impairment evaluation, management considered a number of factors, including the Companys share price at April 30, 2009and current gold prices along with the Companys 2005
pre-feasibility study. Based on this impairment evaluation no impairment of the El Dorado project was identified as of April 30, 2009. 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.

The Company re-evaluates the carrying values of property, plant and equipment when events or changes in circumstance indicate that carrying values may not be recoverable. If it is determined that the estimated net recoverable amount based on
non-discounted cash flows is less than the carrying value, a write-down to the estimated fair value is made by a charge to earnings.

The Company makes significant assumptions and estimates in determining the fair market value of stock-based compensation granted to employees and non-employees and the value attributed to various warrants and broker warrants issued on financings,
which have an effect on the stock-based compensation expense recognized and the contributed surplus and share capital balances on the Companys balance sheet.  Using the Black-Scholes Option Pricing Model, management has made estimates of the
life of stock options and warrants, the expected volatility and the expected dividend yields that could materially affect the fair market value of these securities. The estimates were chosen after reviewing the historical life of the Companys
options and analyzing share price history to determine volatility.

As part of the sale of its interest in Denton-Rawhide, the Company has provided a guarantee on 49% of any reclamation and closure costs in the event that reclamation and closure costs were to exceed $7.0 million. Kennecott has estimated a total
of $4.9 million for these expenditures under the proposed plan.

Changes in Accounting Policies

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. Disclosures required by this standard are included in Note 1 to the audited
consolidated financial statements.

Effective May 1, 2008, the Company adopted CICA Handbook section 3862, Financial Instruments  Disclosure and section 3863,

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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 this standard are
included in Note 9 to the audited consolidated financial statements.

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 included in Note 10
to the audited consolidated financial statements.

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.

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.

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 will have no impact on the Companys consolidated financial
statements.

On March 27, 2009, the CICA approved EIC-174 Mining
Exploration Costs. This guidance clarified that an entity that has initially
capitalized exploration costs has an obligation in the current and subsequent
accounting periods to test such costs for recoverability whenever events or
changes in circumstances indicate that its carrying amount may not be
recoverable. The Company has evaluated the new section and determined that
adoption of these new requirements will have no 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. Under current Canadian standards, more items
are recognized as assets than under IFRS or 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 is currently evaluating the impact of adopting this
standard in 2009.

**International financial reporting standards

In 2006, the Canadian Accounting Standards Board (AcSB)
published a new strategic plan that will significantly affect financial
reporting requirements for Canadian companies. The AcSB strategic plan outlines
the convergence of Canadian GAAP with IFRS over an expected five year
transitional period. In February 2008 the AcSB announced that 2011 is the
changeover date for publicly-listed companies to use IFRS, replacing Canadian
GAAP. This date is for interim and annual financial statements relating to
fiscal years beginning on May 1, 2011. The transition date of May 1, 2011 will
require the restatement for comparative purposes of amounts

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reported by the Company for the year ended April 30, 2011. In
July 2008, the AcSB announced that early adoption will be allowed in 2009
subject to seeking and obtaining exemptive relief. The Company is currently
assessing the financial reporting impact of the transition to IFRS and the
changeover date.

**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 Company is considering early
adoption to coincide with the adoption of IFRS. This adoption is not expected to
have an impact on the Companys financial position, earnings or cash flows.

**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. This adoption is
not expected to have an impact on the Companys financial position, earnings or
cash flows.

A.        Operating
Results

As a result of the sale of its Denton-Rawhide assets (being its
only source of revenue) during fiscal 2009, the Company no longer accounts for
Revenue and Mine Operating Costs from the sale of gold and silver as Mine
Operating Income. Revenue and operating costs from the Denton-Rawhide operation
(to which the Company was entitled and responsible, respectively, until December
31, 2008) are accounted for, for the current and prior fiscal years, as
Discontinued Operation  Net Income of Denton-Rawhide Joint Venture.

For the fiscal year ended April 30, 2009, Pacific Rim recorded
a loss for the period of $(6.3) million or $(0.05) per share, compared to a loss
of $(12.7) million or $(0.11) per share for the fiscal year ended April 30, 2008
and $(9.4) million or $(0.09) per share for the fiscal year ended April 30,
2007. The $6.4 million decrease in net loss for fiscal 2009 compared to fiscal
2008 is primarily related to significantly decreased exploration expenses
combined with an increase in the net income from the Denton-Rawhide joint
venture as a result of the sale by the Company of its interest in the joint
venture during fiscal 2009. The increase in net loss for fiscal 2008 compared to
fiscal 2007 (a difference in net loss of $3.4 million) is a result of increases
in exploration and general and administrative costs combined with a reduction in
income from the Denton-Rawhide Joint Venture year over year.

Expenses

Due to the cessation of the El Dorado drilling program in July
2008 and the reduction of other exploration expenses at all of the Companys
projects, exploration expenditures decreased significantly from $10.7 million in
fiscal 2007 and $11.8 million in fiscal 2008 to $5.5 million in fiscal 2009.

General and administrative expenses have been generally on an
upward trend over the past several years due to the Companys trend toward
higher levels of business activity and because of higher regulatory and legal
costs of complying with United States and Canadian reporting and regulatory
requirements. General and administrative costs in fiscal 2009 ($3.7 million)
however, increased from fiscal 2008 ($3.5 million) as a result of severance
payments made to key personnel and an increase in legal fees associated with the
CAFTA arbitration claim, which were partially offset by reductions in staffing
costs.

The Company realized marginal interest income of $0.1 million
in fiscal 2009, compared to $0.2 million in fiscal 2008 and $0.5 million in
fiscal 2007. Interest income was earned on cash and short term investments held
in each fiscal year. The decrease in interest income over the past 3 fiscal
years reflects the Companys decreasing cash and short term investment balances.

The Company booked a foreign exchange loss of $0.2 million
during fiscal 2009 (compared to a gain of $0.4 million during fiscal 2008 and a
loss of $0.09 million during fiscal 2007) primarily reflecting the impact of the
US-Canadian dollar exchange rate on the Companys Canadian dollar-denominated
investments on hand.

Unusual Items

As described above and in Item 4, the Company sold the assets
it held through its 49% interest in the Denton-Rawhide residual leach gold
operation. During fiscal 2009 the Company received net income from this
Discontinued Operation of $3.2 million, compared to $1.5 million during fiscal
2008 and $2.9 million during fiscal 2007. The current years income received
from this Discontinued Operation reflects the cash payment received for the net
assets sold in addition to the net income or loss related to the production of
gold and silver, of which the Company was a participant until December 31, 2008.
Of the $3.2 million of income from the

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Discontinued Operations, $1.2 million related to the sale of
the net assets and $2.0 million related to the income earned prior to the sale
of the Discontinued Operations.

During fiscal 2008 the Company recovered $1.4 million on its
investment in the Andacollo Mine, compared to a recovery of $1.0 million in
fiscal 2007. The recovery of this investment relates to staged payments on the
sale of the Andacollo Mine during fiscal 2008, fiscal 2007 and fiscal 2006 (the
details of which are available in the Companys 2008, 2007 and 2006 annual
reports). The $1.4 million received in fiscal 2008 represented the final payment
and as such, there were no additional recoveries booked during fiscal 2009.

Summary

As a result of significantly reduced exploration expenditures,
decreased staffing levels and increased net income from the Denton-Rawhide joint
venture, the Companys loss for fiscal 2009 was substantially reduced from
previous fiscal periods ($(6.3) million or $(0.05) per share for fiscal 2009
compared to $(12.7) million ($(0.11) per share) and $(9.4) million ($(0.09) per
share) for fiscal 2008 and fiscal 2007 respectively).

Summary of Quarterly Results

Summary of Quarterly Results (unaudited)(all amounts in
thousands of US dollars, except per share amounts)

Q4 2009
    Q3 2009
    Q2 2009
    Q1 2009
    Q4 2008
    Q3 2008
    Q2 2008
    Q1 2008Revenue from Continuing Operations
    $nil
    $nil
    $nil
    $nil
    $nil
    $nil
    $nil
    $nilLoss before discontinued operations
    $(1,461)
    $(1,629)
    $(2,602)
    $(3,751)
    $(6,079)
    $(3,976)
    $(3,359)
    $(2,482)Loss per share before discontinued operations
       basic and diluted
    $(0.01)
    $(0.01)
    $(0.02)
    $(0.03)
    $(0.06)
    $(0.03)
    $(0.03)
    $(0.02)Discontinued Operations  Income from Denton
      Rawhide Joint Venture
    $49
    $1,246
    $1,390
    $482
    $46
    $273
    $420
    $1,023Discontinued Operations  Recovery of
      Investment in Andacollo Mine
    $nil
    $nil
    $nil
    $nil
    $nil
    $nil
    $1,400
    $nilNet
      loss for the period
    $(1,412)
    $(383)
    $(1,212)
    $(3,269)
    $(6,033)
    $(3,703)
    $(1,539)
    $(1,459)Net loss per share after Discontinued
      Operations - basic and diluted
    $(0.00)
    $(0.00)
    $(0.01)
    $(0.03)
    $(0.06)
    $(0.03)
    $(0.01)
    $(0.01)


2008 quarterly results as well as the first quarter result of
2009 have been reclassified to reflect the sale of the Companys interest in the
Denton Rawhide Joint Venture.

The Company typically realizes a net quarterly loss. Until the
most recent three reporting periods, expenses have generally risen over the past
eight quarters as the Company increased its expenditures on El Salvador-based
social and environmental programs, and was operating a drill program at the El
Dorado project. During Q1 2009 the Company made substantial cuts to its
exploration programs and community initiatives, which along with generally lower
general and administrative expenses due to staffing cuts in Q2 2009 and Q3 2009,
reduced expenses significantly. The Company sold its interest in the Denton
Rawhide operation in Q2 2009, which partially offset these expenses.

Fourth Quarter Fiscal 2009

Proceeds from Discontinued Operations - Income from
Denton-Rawhide Joint Venture, varies quarter to quarter depending on gold
production levels, gold sales during the quarter and the price of gold realized.
Throughout the past 8 quarters, gold production from Denton-Rawhide generally
decreased, as is typical and expected in the residual leaching phase of a heap
leach operation. The Company ceased to receive income from the Denton-Rawhide
joint venture on December 31, 2008. The Company received a nominal payment
during Q4 2009 related to gold that was in process at the operation on December
31, 2008.

During Q1 2009 the Company made substantial cuts to its
exploration programs, which along with cuts to general and administrative
expenses in Q2 2009 and Q3 2009, reduced expenses significantly.

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Despite the fact that the Companys expenses were comparatively
low due to reductions in work programs and staffing, the substantial decrease in
Proceeds from Discontinued Operations  Income from Denton-Rawhide Joint venture
booked during Q4 2009 led to a loss of $(1.4) million or $(0.00) per share;
higher than previous quarters of fiscal 2009 during which expenses were reduced
but the Company still participated in proceeds of gold and silver production
from the Denton-Rawhide operation, but lower than 2008 fiscal quarters when the
Companys expenses were substantially higher.

The Companys fiscal 2009 fourth quarter results presented
above are based on interim consolidated financial statements that have been
prepared in accordance with Canadian generally accepted accounting principles
(Canadian GAAP). The Companys reporting currency is the United States
(U.S.) dollar and all monetary amounts are stated in U.S. dollars unless
otherwise noted.

Impact on Operations as a Result of Governmental Factors

The Companys operations are primarily focused on the
exploration for gold and silver and its sole material project, the El Dorado
property, is located in El Salvador. The Company has experienced significant
delays in the receipt of environmental and mining permits necessary to advance
the El Dorado project further. See Item 4 Property, Plant and Equipment,
and specifically El Salvador Mining Regime and El Dorado Property 
CAFTA Action for information related to El Salvadors mining law, the
Companys actions to date to comply with this law and a legal action that the
Company has commenced under CAFTA. The receipt of necessary permits, or lack
thereof, could have a material impact on the Companys operations.

B.         Liquidity
and capital resources

Liquidity

During fiscal 2009 the Companys cash and cash equivalents
decreased by $0.6 million from $1.9 million at April 30, 2008 to $1.3 million at
April 30, 2009. At April 30, 2009, short term investments (consisting of short
term, redeemable guaranteed investment certificates and bankers acceptances)
were $nil million compared to $4.2 million at April 30, 2008. Bullion (held by
the Company and not yet sold) was $1.2 million at the end of fiscal 2009
compared to $nil at the end of the previous fiscal year. Bullion is valued at
the costs based upon gold price on the date the bullion was received. The total
of cash and cash equivalents, short term investments and bullion inventory
(which in the Companys opinion are collectively equivalent to cash, being
available to cover short-term cash requirements) was $2.5 million at April 30,
2009 compared to $6.1 million at April 30, 2008, a decrease of $3.6 million.
This decrease reflects ongoing, though greatly reduced, expenditures related to
the Companys exploration projects and the general and administrative costs of
maintaining a public company, offset in part by proceeds from the sale of the
Denton-Rawhide asset.

During fiscal 2009 the Company received cash flow from the
following sources: $4.3 million from Denton-Rawhide operations and the sale of
the net assets of the Denton-Rawhide operations, $0.1 million in interest income
and $4.2 million in net redemptions of short term investments. Outlays of cash
during the year included: $5.3 million in direct exploration expenditures and
$3.9 million in direct general and administrative expenses. The net of these
cash inflows and outlays was a decrease in cash and cash equivalents of $0.6
million during fiscal 2009.

Cash Flow Used For Operating Activities

The Companys loss before discontinued operations was $(9.4)
million in fiscal 2009 compared to $(15.7 million) and $(13.3) million in each
of the previous two fiscal years respectively. These losses were offset by a
number of non-cash items including, notably: stock-based compensation of $0.6
million in fiscal 2009 compared to $1.0 million in each of fiscal 2008 and
fiscal 2007; shares issued for property option payments of $0.3 million during
fiscal 2009 compared to $0.2 million in each of fiscal 2008 and 2007; and a
change in accounts payable and accrued liabilities of $(0.8) million for fiscal
2009 compared to $0.4 million for fiscal 2008 and $0.5 million for fiscal 2007.
As a result, cash flow used for operating activities was $(9.2) million in
fiscal 2009 compared to $(12.9) million in fiscal 2008 and $(11.6) million in
fiscal 2007.

Cash Flow Provided by Investing Activities

During the current and past two fiscal periods, the Company
made net redemptions from short term investments ($4.2 million, $3.8 million and
$6.7 million respectively). In fiscal 2008 and 2007 the Company made purchases
of property plant and equipment of $1.2 million and $0.3 million respectively,
however, a negligible amount was booked in fiscal 2009. Proceeds from
discontinued operations were $1.8 million for fiscal 2009 (related to the sale
of the Denton-Rawhide asset) compared to $1.4 million for fiscal 2008 and $1.0
million for fiscal 2007 (related to the sale of the Andacollo mine). As a
result, cash flow provided by investing activities was $6.0 million during
fiscal 2009, $4.0 million during fiscal 2008 and $7.4 million during fiscal
2007.

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Cash Flow Provided by Financing Activities

The Company did not realize any cash flow from financing activities during fiscal 2009. During fiscal 2008, cash flow provided by financing activities totaled $6.9 million, compared to $2.1 million in fiscal 2007. The fiscal 2008 financing
cash flow is related to the issuance of common shares of the Company under a February 2008 equity financing (details available in the Companys 2008 annual report), as well as the exercise of employee stock options (282,500 shares at an average
price of CDN $1.30 per share). The fiscal 2007 financing cash flow is primarily related to the exercise of employee stock options (2,644,000 shares at an average price of CDN $0.50 per share) and the exercise of warrants issued to
underwriters of an equity financing undertaken by the Company in March 2006 (1,195,000 shares at an average price of CDN $0.84 per share) (details available in the Companys 2006 annual report).

Capital Resources and Financial Condition

At April 30, 2009, the book value of the Companys current assets stood at $2.6 million, compared to $7.7 million at April 30, 2008, a reduction of $5.1 million. The decrease in current assets is primarily a result of redemptions of
short term investments (into cash) and subsequent cash expenditures. Property, plant and equipment balances at April 30, 2009 were unchanged from the April 30, 2008 balance of $5.6 million. The long-term asset value of Discontinued Operations
was $nil at April 30, 2009 (the Company having sold its interest in the Denton-Rawhide Joint Venture) compared to a value of $5.0 million at April 30, 2008 prior to the sale. As a result, the Companys total assets at the end of fiscal
2009 were $8.2 million compared to $18.3 million at the end of fiscal 2008.

At April 30, 2009 the Company had current liabilities of $0.6 million compared to $2.9 million at April 30, 2008. The $2.3 million year over year decrease in current liabilities is due to a $0.8 million decrease in accounts payable
and a $1.5 million decrease in current liabilities associated with the discontinued operations. Future income tax liabilities, relating to Pac Rims investment in El Salvador, did not change between the fiscal 2008 and fiscal 2009 year ends
and at April 30, 2009 were valued at $1.0 million. Long term liabilities related to the discontinued operations were $nil at April 30, 2009 compared to $2.1 million at April 30, 2008. Currently, Pacific Rim has no short- or long-term
debt.

The $5.1 million decrease in current assets combined with the $2.3 million decrease in current liabilities, resulted in a $2.7 million reduction in working capital from $4.7 million at the end of fiscal 2008 to $2.0 million at
the end of fiscal 2008.

The Company does not intend to resume significant exploration programs in El Salvador until such time as the El Dorado environmental permit and exploitation concession are received. The Company can not judge if or when the required permits will be
received and is not currently planning any exploration programs for its El Dorado, Santa Rita and Zamora-Cerro Colorado properties for fiscal 2010 beyond what is necessary to keep all of its exploration licences in good standing. Should the required
permits be granted, the Company will evaluate its options for resuming full scale exploration work designed to advance its El Salvador projects. The Company intends to continue to seek new project acquisitions and during fiscal 2010 intends to
continue to conduct low cost field work, technical and legal due diligence on projects it is currently evaluating and to seek new prospects for staking or property acquisitions that fit its exploration focus.

The Company anticipates that its fiscal 2010 exploration plans as outlined above will cost approximately $1.0 million. If regulatory and political conditions warrant, and adequate financing is available, the Company will resume aggressive
exploration of its El Dorado, Santa Rita and Zamora-Cerro Colorado projects in El Salvador, which will result in increased exploration and general and administrative expenditures over those currently anticipated for fiscal 2010. In order to
undertake an expanded exploration program the Company will likely require additional financing during fiscal 2010 (see Item 3 D. Risk Factors for a discussion of financing risk).

The Companys general and administrative costs during fiscal 2010 will reflect lower staffing costs as a result of personnel reductions undertaken in fiscal 2009, but are otherwise anticipated to increase due to legal costs associated with the
CAFTA action undertaken by Pac Rim. The Company may require additional financing during fiscal 2010 (see Item 3 D. Risk Factors for a discussion of financing risk) for general working capital expenses and/or the expenses related to the CAFTA action.

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. 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.

---

Outlook

The Company will continue to curtail its exploration programs
and expenditures in El Salvador until such time as PRES receives the El Dorado
environmental permit and exploitation concession. The Company anticipates
expending approximately $1.0 million on exploration-related expenses during
fiscal 2010, primarily on low-cost exploration work required to keep all of its
El Salvador projects in good standing, limited community relations initiatives,
and due diligence evaluation of new projects outside of El Salvador. This work
will be revised should circumstances change and depending on the Companys
working capital balances and/or financing opportunities. In order to undertake
an expanded exploration program the Company will likely require additional
financing during fiscal 2010 (see Item 3 D. for a discussion of financing risk).

The Companys general and administrative costs during fiscal
2010 will reflect lower staffing costs as a result of personnel reductions
undertaken in fiscal 2009, but are otherwise anticipated to increase due to
legal costs associated with the CAFTA action undertaken by Pac Rim. The Company
may require additional financing during fiscal 2010 (see Item 3 D. Risk Factors
for a discussion of financing risk) for general working capital expenses and/or
the expenses related to the CAFTA action.

The Company will continue its extensive outreach efforts to the
newly elected federal government and administration, municipal government
officials, church leaders, business leaders, and Salvadoran citizens during
fiscal 2010. The Company and its subsidiaries have a well documented history of
supporting local inhabitants and building relationships with all stakeholders.
This is a key component of the Companys approach to exploration and
development, and will continue in all jurisdictions in which it and its
subsidiaries operate.

Notwithstanding these diplomatic efforts, until resolved, Pac
Rims CAFTA claim will proceed during fiscal 2010. Documentation supporting its
CAFTA claim is currently being collected and submitted to ICSID, and it is
anticipated that the formal arbitral panel will be convened and the arbitration
process will commence during fiscal 2010. Ongoing pursuit of this claim may
require the Company to undertake financing during fiscal 2010 specifically
ear-marked for legal expenses.

C.         Research
and Development, Patents and Licenses, etc.

None

D.         Trend
Information

While the Company does not have any producing mines, it is
directly affected by trends in the metal industry. The El Dorado Gold Project,
Santa Rita Gold Project and the ZamoraCerro Colorado Gold Project are all
projects containing gold deposits. At the present time global metal prices are
extremely volatile. Metal prices, driven by rising global demand, climbed
dramatically and approached near historic highs over the past several years. The
global economic and credit crisis has affected all industries, and the base
metals sector has seen plummeting metal prices since October 2008 with some
recovery. The effect of high metal prices had a significant positive impact on
the ability to raise equity capital and to attract interest from potential
sources of required capital to fund the costs of placing the El Dorado Gold
Project into production; however, the increasing metal prices also contributed
to significant increases in the capital costs of many projects including El
Dorado.

Overall market prices for securities in the mineral resources
sector and factors affecting such prices, including base metal prices, political
trends in the countries such companies operate, and general economic conditions,
may have an effect on the terms on which financing is available to the Company,
if at all.

Refer to Risk Factors for further information on uncertainty
or items affecting the business or nature of business of the Company.

E.        Off-Balance
Sheet Arrangements

The Company has no material off-balance sheet arrangements such
as guarantee contracts, contingent interest in assets transferred to an entity,
derivative instrument obligations and any obligations that trigger financing,
liquidity, market or credit risk to the Company.

F.         Tabular
Disclosure of Contractual Obligations

The Company is committed to payments under operating leases for
office premises and office equipment as set out in Notes 9 and 12 to the 2009
audited consolidated financial statements. The following table lists as of April
30, 2009, information with respect to the Companys known contractual
obligations.

---

Contractual Obligations(in thousands of US dollars)

Payments due by periodTotal
      <
        1 year
      1- 3
        years
      4 
        5 years
      >
        5 yearsLong-Term Debt Obligations
      -
      -
      -
      -
      -Capital (Finance) Lease Obligations
      -
      -
      -
      -
      -Operating Lease Obligations
      $147
      $50
      $97
      -
      -Purchase Obligations
      -
      -
      -
      -
      -Accounts Payable and Accrued Liabilities
      $633
      $633
      -
      -
      -Total
      $780
      $683
      $97
      -
      -


G.         Safe
Harbor

See Note regarding Forward-Looking Statements.

ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

A.          
Directors and Senior Management

The following table set out the name of the directors and/or
senior officers as at April 30, 2009, the country in which each is ordinarily a
resident, all offices of the Company now held by each of them, their principal
occupations, and the period of time for which each has been a director and/or
officer of the Company.

Name and Address(1)
    Office or Position Held
    Previous Service as a
      Director
    Principal Occupation
      during past five years(1)
    Share OwnershipCatherine McLeod-Seltzer British Columbia
      Canada
    Chairman and Director
    Since April 11, 2002(2)
    Director and officer of Pacific
      Rim Mining Corp. since 1997. Director and Chairman of Bear Creek Mining
      Corporation, Director of Stornoway Diamond Corporation, Director of
      Kinross Gold Corporation and Troon Ventures Ltd. Formerly a director of
      Miramar Mining Corporation.
    32,200Thomas Shrake(4)Nevada U.S.A.
    President, Chief Executive Officer and Director
    Since April 11, 2002(2)
    Director and officer of Pacific
      Rim Mining Corp. since 1997.
    404,100Anthony J. Petrina(4)(5)(6)British
      Columbia Canada
    Director
    Since April 11, 2002(2)
    Retired. Director of Bear Creek
      Mining Corporation. Formerly a director of Miramar Mining Corporation.
    128,000William Myckatyn(3)(4)(6)British
      Columbia Canada
    Lead Director
    Since April 11, 2002(2)
    Retired. CEO of Quadra Mining
      Ltd. to July 2006, current Chairman and Director of Quadra Mining Ltd.,
      Director of First Point Minerals Ltd. and Director of San Marco Resources
      Inc. Formerly a director of Miramar Mining Corporation.
    87,660


---

Name and Address(1)
    Office or Position Held
    Previous Service as a
      Director
    Principal Occupation during
      past five years(1)
    Share OwnershipDavid K. Fagin(3)(5)(6)Colorado
      U.S.A.
    Director
    Since April 11, 2002(2)
    Investor. Director of Golden Star Resources
      Ltd., Atna Resources Ltd. and T. Rowe Price Mutual Funds.
    88,000Paul B. Sweeney(3)(5)(6)British
      Columbia Canada
    Director
    Since July 2003
    Executive Vice President, Business Development
      of Plutonic Power Corporation, Former Vice President and Chief Financial
      Officer of Canico Resource Corp., Director of Pan American Silver Corp.,
      Director of Polaris Minerals Corporation, Director of New Gold Inc. and
      Director of Magma Energy Corp.
    38,000Steven Krause(7)British Columbia,
      Canada
    Chief Financial Officer
    N/A
    Chief Financial Officer of the Company since
      December 2008; Chief Financial Officer of Bear Creek Mining Corporation;
      Vice- President, Avisar, Chartered Accountants, since October 2003.
    20,000April Hashimoto(7)Washington
      U.S.A.
    Chief Financial Officer
    N/A
    Chief Financial Officer of Pacific Rim Mining
      Corp. since August 2006, former Chief Financial Officer, Strategic
      Development Division, Placer Dome Inc. and Chief Financial Officer of
      Placer Dome Exploration Inc.
    NilJ. Peter Neilans(8)British Columbia
      Canada
    Chief Operating Officer
    N/A
    Chief Operating Officer of Pacific Rim since
      June 2006, Former President and Chief Executive Officer of Placer Dome US.
    NilWilliam Gehlen Nevada U.S.A.
    Vice-President of Exploration
    N/A
    Vice-President of Exploration of Pacific Rim
      Mining Corp. since September 2005. Senior geologist of Pacific Rim Mining
      Corp. since 1997.
    78,200Barbara Henderson British Columbia Canada
    Vice-President of Investor Relations
    N/A
    Vice-President of Investor Relations of Pacific
      Rim Mining Corp. since August 2002. Manager of Investor Relations of
      Pacific Rim Mining Corp. since 1998.
    12,000Ronda L. Fullerton British Columbia Canada
    Corporate Secretary
    N/A
    Corporate Secretary of Pacific Rim Mining Corp.
      since April 2006, former Corporate Paralegal for QLT Inc., former Legal
      Assistant and Corporate Secretary for La Mancha Resources Inc., former
      Legal Assistant for Leisure Canada Inc. and X-Tal Minerals Inc.
    Nil


| | (1) | The information as to the jurisdiction of residence and
      principal occupation, not being within the knowledge of the Company, has
      been furnished by the respective individuals individually.                                                                               
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (2) | April 11, 2002 was the effective date of the amalgamation
      of Dayton and Pacific Rim; Fagin, McLeod and Myckatyn were directors of
      Dayton prior to the amalgamation and McLeod, Myckatyn, Petrina and Shrake
      were directors of Pacific Rim prior to the
amalgamation.

---

| | (3) | Denotes member of Compensation Committee. Mr. Sweeney
      will not be standing for re-election at the Annual and Special General
      Meeting to be held on August 26, 2009.                                             
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (4) | Denotes member of Environmental Committee.                                                                                                                                                                                  
| | (5) | Denotes member of Audit Committee. Mr. Sweeney will not
      be standing for re-election at the Annual and Special General Meeting to
      be held on August 26, 2009.                                                    
| | (6) | Denotes member of Nominating Committee. Mr. Sweeney will
      not be standing for re-election at the Annual and Special General Meeting
      to be held on August 26, 2009.                                               
| | (7) | On September 17, 2008, April Hashimoto was terminated as
      part of the Companys attempt to reduce overhead costs. On December 11,
      2008, Steven Krause was appointed Chief Financial Officer of the
      Company.
| | (8) | On September 17, 2008, J. Peter Neilans was terminated as
      part of the Companys attempt to reduce overhead
costs                                                                                                      

Each of the Companys directors is elected by the Companys
shareholders at an annual general meeting to serve until the next annual general
meeting of shareholders or until a successor is elected or appointed. The board
of directors appoints the Companys executive officers annually after each
annual general meeting, to serve at the discretion of the board of directors.

B.          
Compensation

During the fiscal year ended April 30, 2009, the Company had
three Named Executive Officers (for the purposes of Canadian securities
legislation), namely:

Thomas Shrake, President and Chief Executive Officer Steven
Krause(1), Chief Financial Officer; and April
Hashimoto(1), Chief Financial Officer

The following table sets forth all compensation (annual, long
term or otherwise) for services in all capacities to the Company and its
subsidiaries for the last completed financial year in respect of each of the
individuals comprised of each Chief Executive Officer and the Chief Financial
Officer who acted in such capacity for all or any portion of the most recently
completed financial year, and each of the other three most highly compensated
executive officers of the Company as at April 30, 2009 whose individual total
compensation for the most recently completed financial year, individually,
exceeded CDN$150,000 and any individual who would have satisfied these criteria
but for the fact that individual was neither an executive officer of the
Company, nor acting in a similar capacity, at the end of the most recently
completed financial year (collectively the Named Executive Officers).

Name andPrincipalPosition
      Year
      SalaryUS($)
      Share-BasedAwards($)
      Option-BasedAwards($)(2)
      Non-Equity
        IncentivePlan
        Compensation($)
      PensionValue($)
      All OtherCompensation($)
      TotalCompensation($)AnnualIncentivePlans
      Long-termIncentivePlansThomas 
        Shrake CEO
      2008/ 
        2009
      $204,582
      Nil
      $74,356
      Nil
      Nil
      Nil
      Nil
      $278,938Steven 
        Krause CFO(1)(3)
      2008/ 
        2009
      Nil
      Nil
      $37,178
      Nil
      Nil
      Nil
      CDN$3,815
      $40,923April 
        Hashimoto, CFO(1)
      2008/ 
        2009
      $66,752
      Nil
      Nil
      Nil
      Nil
      Nil
      Nil
      $66,752


|(1) | On September 17, 2008, April Hashimoto was terminated and
      on December 11, 2008, Steven Krause was appointed Chief Financial Officer
      of the Company.                                                                                                                                                                                                                                                                                                                           
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | The stock options granted to Thomas Shrake and Steven
      Krause, as well as the amount of the column under all other compensation,
      were valued in a currency other than the currency that the Company uses in
      its financial statements and has been translated herein at the rate of
      $1.14315 for every CDN$1. The Company calculated an average exchange rate
      for the year to translate the value of the stock option award into the
      reporting currency.
|(3) | The total compensation paid to Steven Krause is his
      portion of the compensation paid to Steven Krause acting as CFO that
      Avisar Chartered Accountants attributes to services provided to Pacific
      Rim Mining Corp. as a percentage of total Avisar billings multiplied by
      the total compensation paid to Steven Krause. During the 2009 fiscal year,
      Avisar Chartered                                                                                        

---

Accountants charged the Company CDN$56,000 for accounting, tax
and financial consulting services.

Incentive Plan Awards

The Company does not have any incentive plans, pursuant to
which compensation that depends on achieving certain performance goals or
similar conditions within a specified period is awarded, earned, paid or payable
to the Named Executive Officers.

Outstanding Share-Based Awards and Option-Based Awards

The following table sets forth information concerning all
awards outstanding under incentive plans of the Company pursuant to which
compensation that depends on achieving certain performance goals or similar
conditions within a specified period, at the end of the most recently completed
financial year, including awards granted before the most recently completed
financial year, to each of the Named Executive Officers:

Name
      Option-Based
        Awards
      Share-Based
        AwardsNumber of Securities Underlying Unexercised Options
        (#)
      Option Exercise
        Price CDN($)
      Option Expiration
        Date
      Value of
        Unexercised In-The-Money Options(1) CDN($)
      Number of
        Shares Or Units Of Shares That Have Not Vested (#)
      Market
        or Payout Value Of Share- Based Awards That
        Have Not Vested CDN($)Thomas 
        Shrake CEO
      200,000 
        200,000 
        300,000 
        500,000
      $0.75 
        $0.92 
        $1.17 
        $0.17
      02/18/2010 
        08/28/2011 
        03/09/2013 
        12/29/2013
      Nil 
        Nil 
        Nil 
        $30,000
      Nil 
        Nil 
        200,000 
        333,333
      N/A 
        N/A 
        N/A 
        $20,000Steven 
        Krause CFO(2)
      250,000
      $0.17
      12/29/2013
      $15,000
      125,000
      $7,500April 
        Hashimoto CFO(2)
      500,000 
        100,000
      $0.92 
        $1.17
      08/27/2011 
        03/09/2013
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil


|(1) | This amount is calculated based on the difference between
      the market value of the securities underlying the options at the end of
      the most recently completed financial year, which was $0.23, and the
      exercise or base price of the option.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | On September 17, 2008, April Hashimoto was terminated and
      on December 11, 2008, Steven Krause was appointed Chief Financial Officer
      of the Company.                                                                                               

Value Vested Or Earned During The Year

The value vested or earned duringthe most recently
completed financial year of incentive plan awards granted to Named Executive
Officers are as follows:

NEO Name
      Option-Based Awards - Value
      Vested During The Year(1) ($)
      Share-Based Awards - Value
      Vested During The Year ($)
      Non-Equity Incentive Plan Compensation - Value Earned
      During The Year ($)Thomas Shrake CEO
    Nil
    Nil
    NilSteven Krause CFO(2)
    Nil
    Nil
    NilApril Hashimoto CFO(2)
    Nil
    Nil
    Nil


---

|(1) | This amount is the dollar value that would have been
      realized computed by obtaining the difference between the market price of
      the underlying securities at exercise and the exercise or base price of
      the options under the option-based award on the vesting date.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | On September 17, 2008, April Hashimoto was terminated and
      on December 11, 2008, Steven Krause was appointed Chief Financial Officer
      of the Company.                                                                                                                       

Pension Plan Benefits

The Company does not have a pension plan that provides for
payments or benefits to the Named Executive Officers at, following, or in
connection with retirement.

Termination and Change of Control Benefits

The Company has a current employment agreement with Thomas
Shrake, CEO, which includes termination and change of control benefits.

In the agreement, change of control is defined as any change
in the effective control or direction of the Company and includes:

| | (a) | an acquisition of 20% or more of the voting rights
      attached to all outstanding shares of the Company by a person or
      combination of persons acting in concert by virtue of an agreement,
      arrangement, commitment or understanding; or
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                       
| | (b) | a change in the Companys officers or directors, which
      alters the effective control or direction of the
Company.                                                                                                                                

An event of termination is defined as the occurrence of any
of the following events at any time after a change of control, without the
executives written consent:

| | (a) | a change (other than changes that are clearly and
      exclusively consistent with a promotion) in the executives position or
      duties (including any position or duties as a director of the Company),
      responsibilities (including, without limitation, the person(s) to whom the
      executive reports, and who report to the executive), title or office in
      effect immediately prior to the change of control, which includes any
      removal of the executive from or any failure to re-elect or re-appoint the
      executive to any such positions or offices;
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | (b) | any failure by the Company to increase the executives
      remuneration in a manner consistent (both as to frequency and as to
      percentage increase) with increases granted generally to the Companys
      other senior personnel;                                                                                                                                                                                                                                                                                                                                                
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | (c) | the Company permanently relocating the executive to any
      place other than the location at which he reported to work on a regular
      basis immediately prior to the change of control;                                                                                                                                                                                                                                                                                                                                                                                              
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | (d) | the Company taking any action to deprive the executive of
      any material fringe benefits not mentioned above and enjoyed by him
      immediately prior to the change of control or the Company failing to
      increase or improve such material fringe benefits on a basis consistent
      with increases or improvements granted to the Companys other senior
      personnel;                                                                                                                                                                                                   
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | (e) | any breach of the Company of any provision of the
      executives current employment agreement;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | (f) | the good faith determination by the executive that, as a
      result of the change of control or any action or event thereafter, the
      executives status or responsibility in the Company has been diminished or
      the executive is effectively being prevented from carrying out his duties
      and responsibilities as they existed immediately prior to the change of
      control; or                                                                                                                                                                                     
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | (g) | failure by the Company to obtain, in a form satisfactory
      to the executive, an effective assumption of its obligations hereunder by
      a successor to the Company, including a successor to a material portion of
      its business.                                                                                                                                                                                                                                                                                                                                              

If, as a result of a change of control of the Company, Mr.
Shrake experiences an event of termination as described above, Mr. Shrake is
entitled to a severance payment of 24 months salary and is able to exercise any
stock options previously granted within 45 business days in the event of
termination after a change of control.

Steven Krause has a consulting agreement with the Company which
includes a change of control clause. In this consulting agreement, change of
control means the acquisition by any person or by any person and joint actor,
whether directly or indirectly, of voting securities as defined in the British
Columbia Securities Act, R.S.B.C. 1996 c. 418, as amended from time to
time, which, when

---

added to all other voting securities of the company at the time
held by such person or by such person and a person acting jointly or in concert
with another person as that phrase is interpreted by the Securities Act, totals
for the first time not less than fifty percent (50%) of the outstanding voting
securities of the Company or the votes attached to those securities are
sufficient, if exercised, to elect a majority of the Board of Directors of the
Company.

Should a Change of Control occur, all common shares subject to
each outstanding stock option held by Mr. Krause will become fully vested in
accordance with the terms of the 2006 Evergreen Incentive Stock Option Plan,
whereupon such option may be exercised in whole or in part by Mr. Krause.

The Company and its subsidiaries have no compensatory plan,
contract or arrangement where a Named Executive Officer is entitled to receive
more than $100,000 to compensate such executive officers in the event of
resignation, retirement or other termination, a change of control of the Company
or its subsidiaries or a change in responsibilities following a change in
control except for Thomas Shrake. Under the terms of his employment agreement,
upon termination by the Company on a change of control, Mr. Shrake is entitled
to receive a payment equal to 24 months salary (based on his salary at the time
of termination).

Estimated Incremental Payment on Change of Control

Under the terms of Thomas Shrakes employment agreement, the
estimated incremental payment upon termination by the Company on a change of
control of the Company, Mr. Shrake is entitled to receive approximately $360,000
(calculated as at April 30, 2009) based upon an amount equal to 24 months
salary plus any amounts owed in respect of accrued vacation and the accelerated
option value of his existing stock options.

Director Compensation

The following table sets forth all amounts of compensation
provided to the directors, who are not also Named Executive Officers, for the
Companys most recently completed financial year:

Director Name(1)
      Fees
      Earned CDN($)
      Share-
      Based Awards CDN($)
      Option-
      Based Awards CDN($)
      Non-Equity Incentive
      Plan Compensa- tion
      CDN($)
      Pension
      Value CDN($)
      All Other
      Compensa- tion
      CDN($)
      Total
      CDN($)William Myckatyn
    $10,000
    Nil
    $12,750
    Nil
    Nil
    Nil
    $22,750David Fagin
    $10,000
    Nil
    $12,750
    Nil
    Nil
    Nil
    $22,750Anthony Petrina
    $10,000
    Nil
    $12,750
    Nil
    Nil
    Nil
    $22,750Paul Sweeney
    Nil
    Nil
    Nil
    Nil
    Nil
    Nil
    NilCatherine McLeod-Seltzer
    Nil
    Nil
    $51,000
    Nil
    Nil
    Nil
    $51,000


|(1) | Relevant disclosure has been provided in the Summary
      Compensation Table above, for directors who are Named Executive Officers
      and who also receive compensation for their services as a
  director.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The Company has no arrangements, standard or otherwise,
pursuant to which Directors are compensated by the Company or its subsidiaries
for their services in their capacity as Directors, or for committee
participation, involvement in special assignments or for services as consultant
or expert during the most recently completed financial year or subsequently, up
to and including the date of this Information Circular except as follows:

- The Companys four (4) independent directors are each entitled to receive
  an annual fee of CDN$10,000 to be paid upon each directors election or
  re-election to the Board at the annual general meeting of the Company.
- Each independent director is entitled to receive a grant of 75,000 stock
  options upon his or her election or re-election at the Companys annual
  general meeting under the current stock option plan.
- Stock options granted to independent directors will be deemed to vest
  immediately.
- Directors are reimbursed for individual travel and other ancillary
  expenses incurred in connection with attending board and committee meetings.

---

**The Company has a stock option plan for the granting of incentive stock
options to the officers, employees and Directors. The purpose of granting such
options is to assist the Company in compensating, attracting, retaining and
motivating the Directors of the Company and to closely align the personal
interests of such persons to that of the shareholders.

Incentive Plan Awards - Outstanding Share-Based Awards and
Option-Based Awards

The following table sets forth information concerning all awards
  outstanding at the end of the most recently completed financial year, including
  awards granted before the most recently completed financial year, to each of
  the Directors who are not Named Executive Officers:

Director Name
      Option-Based Awards
      Share-Based AwardsNumber of Securities
        Underlying Unexercised Options
        (#)
      Option Exercise PriceCDN($)
      Option ***Expiration*** Date
      Value of Unexercised
        In-The- Money Options(1) CDN($)
      Number
        of Shares Or Units
        Of Shares ThatHave Not
        Vested (#)
      Market
        or Payout Value Of Share- ***Based Awards*** That Have Not Vested CDN($)William Myckatyn
      75,000 
        90,000 
        75,000 
        15,000 
        125,000 
        75,000
      0.75 
        0.92 
        0.96 
        1.17 
        0.17 
        0.17
      02/18/2010 
        08/28/2011 
        08/27/2012 
        03/09/2013 
        12/29/2013 
        12/29/2013
      Nil 
        Nil 
        Nil 
        Nil 
        $7,500 
        $4,500
      Nil 
        Nil 
        Nil 
        10,000 
        83,333 
        Nil
      Nil 
        Nil 
        Nil 
        Nil 
        $5,000 
        N/APaul Sweeney
      75,000 
        75,000 
        75,000 
        10,000
      0.75 
        0.92 
        0.96 
        1.17
      02/18/2010 
        08/28/2011 
        08/27/2012 
        03/09/2013
      Nil 
        Nil 
        Nil 
        Nil
      Nil 
        Nil 
        Nil 
        3,333
      Nil 
        Nil 
        Nil 
        NilDavid Fagin
      75,000 
        75,000 
        75,000 
        125,000 
        75,000
      0.75 
        0.92 
        0.96 
        0.17 
        0.17
      02/18/2010 
        08/28/2011 
        08/27/2012 
        12/29/2013 
        12/29/2013
      Nil 
        Nil 
        Nil 
        $7,500 
        $4,500
      Nil 
        Nil 
        Nil 
        83,333 
        Nil
      Nil 
        Nil 
        Nil 
        $5,000 
        N/AAnthony Petrina
      75,000 
        75,000 
        75,000 
        125,000 
        75,000
      0.75 
        0.92 
        0.96 
        0.17 
        0.17
      02/18/2010 
        08/28/2011 
        08/27/2012 
        12/29/2013 
        12/29/2013
      Nil 
        Nil 
        Nil 
        $7,500 
        $4,500
      Nil 
        Nil 
        Nil 
        83,333 
        Nil
      Nil 
        Nil 
        Nil 
        $5,000 
        N/ACatherine 
        McLeod-Seltzer
      200,000 
        100,000 
        125,000 
        300,000
      0.75 
        0.92 
        1.17 
        0.17
      02/18/2010 
        08/28/2011 
        03/09/2013 
        12/29/2013
      Nil 
        Nil 
        Nil 
        $18,000
      Nil 
        Nil 
        41,667 
        200,000
      Nil 
        Nil 
        Nil 
        $12,000


|(1) | This amount is calculated based on the difference between
      the market value of the securities underlying the options at the end of
      the most recently completed financial year, which was $0.23 and the
      exercise or base price of the option.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

Incentive Plan Awards - Value Vested Or Earned During The
Year

The value vested or earned duringthe most recently
completed financial year of incentive plan awards granted to Directors who are
not Named Executive Officers are as follows:

Director Name
      Option-Based Awards - Value
      Vested During The Year(1) CDN($)
      Share-Based Awards - Value
      Vested During The Year(2) CDN($)
      Non-Equity Incentive Plan
      Compensation - Value Earned During The
      Year CDN($)William Myckatyn
    Nil
    N/A
    N/APaul Sweeney
    Nil
    N/A
    N/ADavid Fagin
    Nil
    N/A
    N/AAnthony Petrina
    Nil
    N/A
    N/ACatherine McLeod-Seltzer
    Nil
    N/A
    N/A


|(1) | This amount is the dollar value that would have been
      realized, computed by obtaining the difference between the market price of
      the underlying securities at exercise and the exercise or base price of
      the options under the option-based award on the vesting date (December 30,
      2008).
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Securities Authorized for Issuance Under Equity Compensation
Plans

Plan Category
      Number of Securities to
      be issued upon exercise of outstanding options,
      warrants and rights
      Weighted average
      exercise price of outstanding options,
      warrants and rights
      Number of securities remaining available
      for future issuance under equity compensation
      plans (excluding securities reflected in column
      (a))Equity compensation plans approved by
      securityholders
    9,048,334
    CDN$0.93
    2,756,697Equity compensation plans not approved by
      securityholders
    Nil
    N/A
    N/ATotal:
    9,048,334
    CDN$0.93
    2,756,697


Details of the Companys Plan(s) are set out in the notes to
its audited financial statements which may be accessed at the Companys web site
or www.sedar.com.

*C.******Board Practices*

Corporate governance relates to the activities of the Companys
board of directors (the Board), the members of which are elected by and are
accountable to the shareholders, and takes into account the role of the
individual members of management who are appointed by the Board and who are
charged with the day to day management of the Company. The Board is committed to
sound corporate governance practices which are both in the interest of its
shareholders and contribute to effective and efficient decision making.

National Policy 58-201 Corporate Governance Guidelines
establishes corporate governance guidelines which apply to all public companies.
The Company has reviewed its own corporate governance practices in light of
these guidelines. In certain cases, the Companys practices comply with the
guidelines; however, the Board considers that some of the guidelines are not
suitable for the Company at its current stage of development and therefore these
guidelines have not been adopted. National Instrument 58-101Disclosure of
Corporate Governance Practices mandates disclosure of corporate governance
practices, which disclosure is set out below.

---

Independence of Members of Board and Management Supervision
by Board

The Companys Board currently consists of six directors, a
majority of whom are independent based upon the tests for independence set forth
in Section 803 of the NYSE Amex Company Guide and National Instrument 52-110
Audit Committees(NI 52-110). Upon election to the Board at the
shareholders meeting on August 26, 2009, the Board will include three (3)
independent directors: Messrs. Myckatyn, Petrina, and Fagin. Mr. Sweeney will
not be standing for re-election at the Meeting. Mr. Shrake and Ms.
McLeod-Seltzer are not considered independent as they are the President and
Chief Executive Officer, and Board Chair, respectively, of the Company.

The Board facilitates the exercise of independent judgement in
carrying out its responsibilities, by the effective supervision of management by
the independent directors on an informal basis through active and regular
involvement in reviewing and supervising the operations of the Company and
through regular and full access to management. Further independent supervision
is performed through the Audit Committee which is composed entirely of
independent directors who meet regularly with the Companys auditors without
management being in attendance. The independent directors hold meetings without
the presence of non-independent directors on a quarterly basis and are also
encouraged to meet at any time they consider necessary without any members of
management, including the non-independent directors, being present. The
Companys auditors, legal counsel and certain employees may be invited to
attend. During the Companys most recently completed financial year, the
independent directors met a total of three (3) times.

Leadership is provided for the Boards independent directors
through access to management and the independent operation of the Audit
Committee, as discussed above, and through its Lead Director, Mr. Myckatyn. As
Lead Director, Mr. Myckatyns role and responsibilities are to:

| | (i)    | assist the Chairman to manage the Board and its
      committees in a manner that ensures that these relationships are effective
      and efficient and further the best interests of the Company;
| | ------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (ii)   | oversee the process of evaluation of the Board, its
      committees and individual directors;                                                                                                     
| | (iii)  | act as the principal sounding board and counsellor for
      the Chairman;                                                                                                                         
| | (iv)   | ensure that the Chairman is aware of concerns of the
      independent directors, shareholders and other stakeholders;                                                                             
| | (v)    | work with the Chairman to assist the Chairman in
      fulfilling her responsibilities in managing the Board;                                                                                      
| | (vi)   | work with the Chairman to co-ordinate the agenda for
      Board meetings;                                                                                                                         
| | (vii)  | chair and manage all meetings for the independent
      directors;                                                                                                                                 
| | (viii) | attend committee meetings when it is appropriate to do
      so; and                                                                                                                               
| | (ix)   | meet, from time to time, with the Chairman and the
      President and Chief Executive Officer to convey and discuss concerns of
      the independent directors.                                  

Participation of Directors in Other Reporting Issuers

The following table sets forth directors of the Company that
are also a director of any other issuer that is a reporting issuer (or
equivalent) in a jurisdiction or foreign jurisdiction.

Name of Director
      Name of Other Public CompanyCatherine McLeod-Seltzer
    Bear Creek Mining Corporation,
      Stornoway Diamond Corporation, Kinross Gold Corporation and Troon Ventures
      Ltd.Anthony J. Petrina
    Bear Creek Mining CorporationWilliam Myckatyn
    Quadra Mining Ltd., First Point
      Minerals Corp. and San Marco Resources Inc.David K. Fagin
    Golden Star Resources Ltd., Atna
      Resources Ltd. and T. Rowe Price Mutual FundsPaul B. Sweeney
    Pan American Silver Corp.,
      Polaris Minerals Corporation, New Gold Inc., and Magma Energy Corp.


Participation of Directors in Board Meetings

The Board meets at least once every quarter to review, among
other things, the performance of the Company. The Board also holds a meeting
each year to review and assess the Companys financial forecasts and business
plan for the ensuing year and its overall strategic

---

objectives. Other meetings of the Board are called to deal with
special matters as circumstances require. During the Companys most recently
completed financial year, eight (8) Board meetings were held. The attendance
record of each director for the Board meetings held is as follows:

Name of Director
      No. of Board Meetings Attended in the Most
        Recently Completed Financial YearCatherine
      McLeod-Seltzer
    8Thomas Shrake
    8Anthony J. Petrina
    8William Myckatyn
    8David K. Fagin
    7Paul B. Sweeney
    7


Board Mandate

The mandate of the Board is to manage or supervise the
management of the business and affairs of the Company and to act with a view to
the best interests of the Company. The Board sets long-term goals and objectives
for the Company to formulate the plans and strategies necessary to achieve those
objectives and to supervise and offer guidance to the Companys senior
management in their implementation. Although the Board has delegated to senior
management personnel the responsibility for managing the day-to-day affairs of
the Company the Board is ultimately responsible for all matters relating to the
Company and its business. In fulfilling its mandate, the Board, among other
matters, is responsible for reviewing and approving the Companys overall
business strategies and its annual business plan; reviewing and approving the
quarterly corporate and cash flow forecasts; reviewing and approving significant
capital investments; reviewing major strategic initiatives to ensure that the
Companys proposed actions accord with shareholder objectives; reviewing
succession planning; assessing managements performance against approved
business plans and industry standards; reviewing and approving the reports and
other disclosure issued to shareholders; ensuring the effective operation of the
Board; and safeguarding shareholders equity interests through the optimum
utilization of the Companys capital resources.

The Board expects management to efficiently implement its
strategic plans for the Company in a professional, competent and ethical manner,
to keep the Board fully apprised of its progress in doing so and to be fully
accountable to the Board in respect to all matters for which it has been
assigned responsibility. In addition to matters, which must by law or pursuant
to the constating documents of the Company be approved by the Board, all matters
of strategic importance to the Company are referred to the Board for prior
review and approval. Any material expenditures or legal commitments, including
without limitation debt or equity financings, acquisitions and divestitures by
the Company, financial statements and major disclosure documents are subject to
prior approval by the Board. The Board holds meetings on a regular basis to
review the Companys strategy as well as to consider and approve particular
matters. One of the Boards responsibilities is to review and, if thought fit,
to approve opportunities as presented by management and to provide guidance to
management. The Board expects management to operate the business of the Company
in a manner that enhances shareholder value and is consistent with the highest
level of integrity. Management is expected to execute the Companys business
plan and to meet performance goals and objectives.

The Board oversees the management of the Companys affairs
directly and through its committees. The Board also meets to plan for the future
growth of the Company; identify risks of the Companys business, thus ensuring
the implementation of appropriate systems to manage these risks; monitor senior
management; and ensure timely disclosure of material transactions. Frequency of
Board meetings, as well as the nature of agenda items, change depending upon the
state of the Companys affairs and in light of opportunities or risks that the
Company faces. When necessary and appropriate, issues may be approved and
adopted by the Board by way of written resolutions in accordance with applicable
corporate law.

Position Descriptions

The Board has developed written position descriptions for the
Board Chair, President and CEO and for the directors at large. On a quarterly
basis, the Board approves the operating and capital forecasts, and the Chairman
and President and CEO are required to ensure the Company operates within those
guidelines. Material departures must be approved by the Board. The Board is of
the view that the respective corporate governance roles of the Board and
management, as represented by the Chairman and President and CEO, are clear, and
that the limits to managements responsibility and authority are well defined.

The Board has not developed written position descriptions for
the Chair of each Board committee. The Chairs of the Nominating and Compensation
Committees, as well as the Health, Safety and Environmental Committee are
responsible for calling the meetings of each Committee, establishing meeting
agenda with input from management, and supervising the conduct of the meetings.
The Chair

---

of the Audit Committee has a clear mandate from the Board to
carry out his responsibilities.

Orientation and Continuing Education

New directors are provided with a Board Manual, as reviewed and
adopted by the Board, which contains comprehensive information and guidelines on
the duties of the Board, and members of management, terms of reference for
committees and policies adopted by the Board. New directors are given a full
briefing by the Chairman of the Board and President and CEO. The President and
CEO reports at each board meeting on the Companys activities and provides
directors with a monthly written report. All directors are encouraged to contact
senior management for updates at any time.

The Board currently does not provide continuing education for
its directors. By using a Board composed of experienced professionals with a
wide range of financial, legal, exploration and mining expertise, the Company
ensures that the Board operates effectively and efficiently.

Board members are encouraged to communicate with management,
legal counsel and, where applicable, auditors and technical consultants of the
Company; to keep themselves current with industry trends and developments and
changes in legislation with managements assistance; and to attend related
industry seminars and visit the Companys operations. Board members have full
access to the Companys records.

Ethical Business Conduct

The Board has adopted a written Code of Conduct by which it and
all officers and employees of the Company abide. A copy of the Code of Conduct
is available for review on the Companys website. In addition, the Board,
through its meetings with management and other informal discussions with
management, encourages a culture of ethical business conduct and believes the
Companys high calibre management team promotes a culture of ethical business
conduct throughout the Companys operations and is expected to monitor the
activities of the Companys employees, consultants and agents in that regard.
The Board encourages any concerns regarding ethical conduct in respect of the
Companys operations to be raised, on an anonymous basis, with the President and
CEO, the Chairman, or another Board member as appropriate.

It is a requirement of applicable corporate law that directors
and senior officers who have an interest in a transaction or agreement with the
Company promptly disclose that interest at any meeting of the Board at which the
transaction or agreement will be discussed and, in the case of directors,
abstain from discussions and voting in respect to same if the interest is
material. These requirements are also contained in the Companys Articles, which
are made available to the directors and senior officers of the Company.

Audit Committee

Audit Committee Charter

The following is the text of the Audit Committees Charter:

(Amended and Restated effective July 29,
2004)

The primary function of the Audit Committee is to assist the
Board in fulfilling its oversight responsibilities, primarily through overseeing
managements conduct of the Companys accounting and financial reporting process
and systems of internal accounting and financial controls; selecting, retaining
and monitoring the independence and performance of the Companys outside
auditors, including overseeing the audits of the Companys financial statements,
and approving any non audit services; and providing an avenue of communication
among the outside auditors, management and the Board.

14.1           
Composition of the Audit Committee:

a)****
Shall consist of a minimum of three directors at all times, all of whom must be
independent as required by applicable law and applicable stock exchange listing
rules (the Listing Rules). A member of the Committee
shall be considered independent if (a) he or she is not an employee of the
Company; (b) he or she does not accept, directly or indirectly, any consulting,
advisory or other compensatory fee from the Company or its subsidiaries other
than in connection with serving on the Committee, any other Board committee or
as a member of the Board; (c) he or she is not an affiliated person of the
Company or any Company subsidiary as defined by applicable law and Listing
Rules; and (d) he or she meets all other requirements for independence imposed
by law and the Listing Rules from time to time and any requirements imposed by
any Canadian or other governmental body having jurisdiction over the Company

---

b)****
All members of the Committee shall have a practical knowledge of finance and
accounting and be able to read and understand fundamental financial statements
from the time of their respective appointments to the Committee.

c) ****At least one member of the Committee shall be a financial expert as
defined by Item 401(h) of Regulation S-K, unless otherwise determined by the
Board, and at least one member shall meet the financial sophistication standards
under the Listing Rules. The designation or identification of a member of the
Committee as an audit committee financial expert does not impose on such
person any duties, obligations, or liability that are greater than the duties,
obligations, and liability imposed on such person as a member of the Committee
and Board of Directors in the absence of such designation or identification; and
(ii) the designation or identification of a member of the Committee as an audit
committee financial expert does not affect the duties, obligations, or
liability of any other member of the Committee or Board of Directors

d)****
Each member of the Committee shall be appointed by the Board and shall serve
until the earlier to occur of the date on which he or she shall be replaced by
the Board, resigns from the Committee, or resigns from the Board.

e)****
Shall meet no less than four times annually and at least quarterly, on such
dates that the Chair of the Audit Committee determine. Notice of meetings shall
be given by letter, facsimile or other means of recorded electronic
communication or by telephone not less than 24 hours before the time fixed for
the meeting. Members may waive notice of any meetings before or after the
holding thereof. A majority of the members present at a meeting will constitute
a quorum.

f) ****The Chair of the Audit Committee shall be appointed by the Board
following the recommendation of the Chair of the Board, who will prepare and /
or approve an agenda in advance of each meeting and shall preside over meetings
of the Committee.

14.2           
Terms of Reference

The responsibilities and duties of the Audit Committee shall
be to:

a)****
Review and recommend for Board approval the annual and quarterly financial
statements of the Company, including Managements Discussion and Analysis, and
determine whether they are complete and consistent with the information known to
committee members. Determine that the auditors are satisfied that the financial
statements have been prepared in accordance with applicable generally accepted
accounting principles.

b)****
Make regular reports to the Board.

c) ****Have the sole authority to appoint or replace the independent auditor
(subject, if applicable, to shareholder ratification). The independent auditor
shall report directly to the Audit Committee.

d) ****Review the scope of the audit to be conducted by the external auditor
of the Company.

e) ****Be directly responsible for the compensation and oversight of the work
of the independent auditor (including resolution of disagreements between
management and the independent auditor regarding financial reporting) for the
purpose of preparing or issuing an audit report or related work.

f) ****Review and pre-approve all auditing services, internal control related
services and permitted non-audit services (including the terms thereof) to be
performed for the Company by its independent auditor, subject to the de minimus
exceptions for non-audit services described in Section 10A(i)(1)(B) of the
Securities Exchange Act of 1934, as amended, which are approved by the Audit
Committee prior to completion of the audit. The Audit Committee may form and
delegate authority to subcommittees consisting of one or more members when
appropriate, including the authority to grant pre-approvals of audit and
permitted non-audit services, provided that decisions of such subcommittee to
grant pre-approvals shall be presented to the full Audit Committee at this next
scheduled meeting.

g) ****Pre-approve all engagement letters for all auditing and non-audit
services to be provided to the Company or its subsidiaries, before and after
completion of work and assess the performance of external and internal auditors.

h) ****Review and determine the compensation to be paid to the independent
auditor for all auditing services, internal control related services and
permitted non-audit services. The Company shall provide appropriate funding, as
determined by the Audit Committee, for payment of compensation to the
independent auditor for the purpose of rendering or issuing an audit report and
to advisors employed by the Audit Committee.

---

i)****
Review all public disclosure documents containing audited or unaudited financial
information before release, including but not limited to prospectus, annual
report, annual information form and managements discussion and analysis.

j) ****Review, at least semi-annually, all expenses paid by the Company to or
in behalf of the CEO and the President and any other financial arrangements or
transactions with them and their affiliates.

k) ****Review all post-audit or management letters containing the
recommendations of the external auditor and managements response/follow-ups of
any identified weakness.

l) ****Have the right, for the purpose of performing their duties, of
inspecting all of the books and records of the Company and its affiliates and of
discussing such accounts and records and any matters relating to the financial
position or condition of the Company with the officers and auditors of the
Company and its affiliates.

m)****
Review any transaction involving the Company and a related party at least once a
year or upon any significant change in the transaction or relationship.

n) ****Review and discuss with the independent auditors and management
(including the senior internal audit executive) any significant matters
regarding the Companys internal controls and procedures over financial
reporting that have come to the attention of the independent auditor during the
conduct of their annual audit, and review whether internal control
recommendations made by the auditors have been implemented by management and
review any special steps adopted in light of material control deficiencies and
the adequacy of disclosures about changes in internal control over financial
reporting.

o) ****Review major risk exposures (whether financial, operating or otherwise)
and the guidelines and policies that management has put in place to govern the
process of monitoring, controlling and reporting such exposures (including any
hedging).

p)****
Review and discuss reports from the independent auditors on:

(i) ****all critical accounting policies and practices used in preparation of
the Companys financial statements;

(ii) ****all alternative treatments of financial information within generally
accepted accounting principles that have been discussed with management,
ramifications of the use of such alternative disclosures and treatments and the
treatment preferred by the independent auditors; and

(iii)****
other material written communications between the independent auditor and
management, such as management letters or schedules of adjusted differences.

q) ****Discuss with management and the independent auditors the Companys use
of non-GAAP information in any report, earnings release or other publicly
disseminated document and any off-balance sheet structures and the effect of
regulatory and accounting initiatives on the Company.

r)****
Review annually managements report on internal controls and any auditors
attestation regarding managements assessment of internal controls, required by
law or Listing Rules and review whether internal control recommendations made by
the auditors have been implemented by management.

s) ****Establish procedures for: (a) the receipt, retention and treatment of
complaints received by the Company regarding accounting, internal accounting
controls or auditing matters; and (b) the confidential, anonymous submission by
employees of the Company of concerns regarding questionable business conduct,
accounting or auditing matters.

t)****
Have such other duties, powers and authorities, consistent with the provisions
of applicable laws and Listing Rules, or as the Board may by resolution delegate
to the Audit Committee from time to time.

u) ****At the Companys expense, retain independent counsel, accountants or
other experts for such purposes as the Committee, in its sole discretion,
determines to be appropriate to carry out its responsibilities, and set the
compensation to be paid to such experts.

v)****
Review on an annual basis and if necessary update this Charter and have changes
approved by the Board.

14.3           
Regulations

The following regulations shall apply to the proceedings of
the Audit Committee.

---

a) ****The business of the Audit Committee shall be transacted either at
meetings thereof or by conference telephone or other communications facilities
that permit all persons participating in the meeting to hear each other, or by
resolution in writing. All questions at a meeting shall be decided in accordance
with the vote of a majority of those present and the Chair of the meeting shall
not have a second or casting vote.

b) ****A resolution in writing signed by all members of the Audit Committee
entitled to vote on that resolution at a meeting of the Audit Committee shall be
as valid as if it had been passed at a duly called and constituted meeting. Such
resolutions in writing may be in one or more counterparts, all of which, when
taken together, shall be deemed to constitute one resolution.

c) ****The auditor of the Company shall, at the expense of the Company, be
entitled to attend and be heard at or may be invited to any meeting of the Audit
Committee, except for portions of meetings in which their work, fees and
performance may be discussed.

d) ****The Audit Committee Chair shall regularly report on the activities of
the Audit Committee, to the Board of Directors.

e) ****The external auditor and senior management shall have the opportunity
or may be invited to meet separately with the Audit Committee.

f) ****The minutes of the proceedings of the Audit Committee and any
resolutions in writing shall be kept in a book provided for that purpose which
shall always be open for inspection by any director of the Company.

g) ****Subject to the foregoing, the calling, holding and procedure at
meetings of the Audit Committee shall be determined by the Audit Committee
Chair.

14.4           
Limitation of Audit Committees Role

While the Audit Committee has the responsibilities and
powers set forth in this Charter, it is not the duty of the Audit Committee to
plan or conduct audits or to determine if the Companys financial statements or
disclosures are complete and accurate and are in accordance with GAAP and
applicable rules and regulations. These are responsibilities of management and
the independent auditors.

Composition of the Audit Committee

The members of the Audit Committee are David Fagin, Paul
Sweeney and Anthony Petrina. All of the members are financially literate and
independent for the purposes of Multilateral Instrument 52-110 (MI
52-110).

Messrs. Fagin and Sweeney are financial experts, in that they
have an understanding of generally accepted accounting principles and financial
statements; are able to assess the general application of accounting principles
in connection with the accounting for estimates, accruals and reserves; have
experience preparing, auditing, analyzing or evaluating financial statements
that entail accounting issues of equal complexity to the Companys financial
statements (or actively supervising another person who did so); have an
understanding of internal controls and procedures for financial reporting and an
understanding of audit committee functions.

Mr. Fagin does not have an accounting designation; instead his
expertise is derived from his high level involvement in the financial matters of
public corporations almost continuously for at least 35 years. Mr. Fagin was
involved in the valuation of oil and gas companies for ten years both as a
consultant and a bank appraisal engineer (1958-68); President of a subsidiary of
Rosario Resources Corporation, a NYSE company (1968-75) and then Executive
Vice-President (1975-77) then President (1977-82) during which period he was
intimately involved in financial and accounting matters. In 1982, he founded
Fagin Exploration Company and worked closely with an accountant and auditors to
maintain the records. From 1986 to 1991, Mr. Fagin was the President and Chief
Operating Officer for Homestake Mining Corporation (NYSE), responsible for
producing operations in six countries and was involved in decisions for
corporate financial reporting. Between 1992 and 1996, Mr. Fagin was Executive
Chairman of Golden Star Resources Ltd. (ASE and TSE) and managed all
administrative matters including annual reports, audits and registration in
Canada and the U.S. Since 1987, Mr. Fagin has served on boards and audit
committees of several public companies including T. Rowe Price Mutual Funds,
Golden Star Resources Ltd., Canyon Resources Corp. (recently acquired by Atna
Resources Ltd.), Dayton Mining Corp. and the Company, where he was either
Chairman or a member of each audit committee. He is currently a director of Atna
Resources Ltd.

Mr. Sweeney does not have an accounting designation. However,
Mr. Sweeney has a solid background in accounting and financial management and
started his accounting career in 1972. From 1987 to 1993 he worked with Placer
Dome Inc. as Chief Financial Officer (1987-1989) of an Australian subsidiary
operating five mines in Australia and Papua New Guinea. Mr. Sweeney was
responsible for all accounting, financial and marketing requirements; then
Assistant Treasurer (1989-1991) at Vancouver head office where he was
responsible for the review of financial needs for all members of the Placer Dome
group worldwide risk management and

---

debt administration; and director, development planning (1991-1993) where he was responsible for the development of plans relating to the existing assets and cash flow by the group worldwide. Since 1994, Mr. Sweeney has served as the Chief Financial
Officer of several public companies including Princeton Mining Corporation, Sutton Resources Ltd., Manhattan Minerals Corp. and Canico Resource Corp. where he was responsible for all finance, accounting and taxation matters.  Currently he is the
Executive Vice President, Business Development of Plutonic Power Corporation. Mr. Sweeney will not be standing for re-election at the Meeting.

The third member of the Companys audit committee, Anthony Petrina, is financially literate in that he has the ability to read and understand a set of financial statements that present a breadth and level of complexity of accounting issues that
are generally comparable to the breadth and complexity of the issues that can reasonably be expected to be raised by the Companys financial statements. Mr. Petrina worked for Placer Dome for 32 years, serving as President, Chief Executive
Officer and Vice-Chairman, until his retirement in 1992. Mr. Petrina has been a director of several other mining companies since his retirement to date.

Nomination of Directors

The Nominating Committee is composed of three directors, Messrs. Petrina (Chair), Sweeney and Myckatyn, all of whom are independent within the meaning of Section 803 of the NYSE Amex Company guide and NI 52-110. The Nominating Committee has the
responsibility for recommending to the Board the nominees to fill vacancies on the Board or to be proposed by any member of the Board as candidates for election as directors at the annual general meeting.  The Nominating Committee also recommends to
the Board a desirable balance of expertise among the Board members, seeks out possible candidates to fill Board positions and aids in attracting qualified candidates to the Board.  In addition, the Nominating Committees responsibilities
include reviewing and monitoring the orientation of new Board members; reviewing and approving officers directorships in other companies and reviewing directors relationships with outside entities with regard to potential conflicts of
interest.

Compensation

The Compensation Committee is composed of Messrs. Fagin (Chair), Sweeney, and Myckatyn, all of whom are independent within the meaning of Section 803 of the NYSE Amex Company guide and NI 52-110. The overall purpose of the Compensation Committee is
to make recommendations to the Board for human resources and compensation policies and to implement and oversee same if the Board approves the recommendations for the Company.

The Compensation Committee is responsible for reviewing all overall compensation strategy, objectives and policies; annually reviewing and assessing the performance of the executive officers; recommending to the Board the compensation of the
executive officers; reviewing executive appointments; and reviewing the adequacy and form of directors compensation.

To determine compensation payable, the Compensation Committee
  reviews compensation paid for directors and officers of companies of similar
  size and stage of development in the mineral exploration industry and determines
  an appropriate compensation reflecting the need to provide incentive and compensation
  for the time and effort expended by the directors and senior management while
  taking into account the financial and other resources of the Company. See also
  Statement of Executive Compensation above.

No compensation consultant or advisor has, at any time since the beginning of the Companys most recently completed financial year, been retained to assist in determining compensation for any of the Companys directors and officers.

Other Committees

Committees of the Board are an integral part of the Companys governance structure. The Boards committees presently consist of an Audit Committee, a Compensation Committee, a Heath, Safety and Environmental Committee and a Nominating
Committee.  The Boards committees have been established to devote the necessary expertise and resources to particular areas, and to enhance the quality of discussion at Board meetings. The Committees facilitate effective Board decision making
by providing recommendations to the Board on matters within their respective responsibilities. The Board believes that the Committees assist in the effective functioning of the Board and that the composition of the Committees should ensure that the
views of the independent directors are effectively represented.

A discussion of the Companys Audit, Nominating and Compensation Committees is provided above under the sub-headings Audit Committee, Nomination of Directors and Compensation.

The Companys Health, Safety and Environmental Committee is composed of Messrs. Myckatyn (Chair), Shrake and Petrina, a majority of whom are considered independent within the meaning contained in NI 52-110. The Health, Safety and Environmental
Committee has the responsibility for reviewing the Companys environmental policy and for ensuring the Companys operations are operated in a manner consistent with the environmental policy and also for ensuring the Companys
operations are run in a manner that does not unduly expose its employees to unnecessary risk of accident or death.

---

The Board has determined that, at this stage of the Companys
development, it is not necessary for the Board to have additional standing
committees. The Board may from time to time appoint a special committee of one
or more directors which committee may engage an outside advisor at the Companys
expense in order to assist the committee in fulfilling its responsibilities.

Assessments

The Board annually, and at such other times as it deems
appropriate, reviews the performance and effectiveness of the Board, the
directors and its committees to determine whether changes in size, personnel or
responsibilities are warranted. To assist in its review, the Board conducts
informal surveys of its directors respecting its own effectiveness. In addition,
the Board satisfies itself that the Board, its committees, and its individual
directors are performing effectively through frequent discussions between
management and individual Board members. There are also discussions among the
independent directors with resulting comments to the Board.

Shareholder Feedback and Concerns

The Company is dedicated to the maintenance of good shareholder
relations and attempts to deal with any expressed concerns of shareholders in an
effective and timely manner. The Company employs a Vice-President of Investor
Relations to monitor and promptly address shareholder concerns in an expeditious
and informal manner. If any material issues of concern arise the Board of
Directors is informed and provides direction for action as needed. The Company
has a Disclosure Policy which is followed and is available for review on the
Companys web site.

D. ****Employees

As at April 30, 2009, the Company (including its subsidiaries)
had two employees in Canada, three employees in the US and 32 employees in El
Salvador.

E. ****Share Ownership

See Item 6A. Directors and Senior Management and Item 6B.
Compensation for details as to share ownership on an individual basis.

ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

A. ****Major Shareholders

To the best of the knowledge of the directors and senior
officers of the Company, the following are the only shareholders of the Company
that beneficially own, directly or indirectly, or exercise control over, shares
carrying more than 5% of the outstanding voting rights attached to the Companys
common shares as at April 30, 2009:

Name of
      Shareholder
    No. of
      Shares
    % of
      Issued SharesCDS & Co.
    99,477,380
    84.27%CEDE & Co.
    11,369,038
    9.63%


Voting Rights

The Companys major shareholders do not have different voting
rights from other shareholders.

Change of Control

To the best of the Companys knowledge, there are no
arrangements of which may result in a change in control of the Company.

Geographic Breakdown

As at June 30, 2009, there were 184 U.S. registered holders
owning 15,688,097 (13.29%) of the Companys outstanding shares.

The Company is a publicly owned Canadian corporation, the
shares of which are owned by Canadian residents, US residents, and residents of
other countries.

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B.****
Related party transactions

The Company received accounting services from an accounting
firm of which an officer of the Company is a partner. The total accounting fees
paid were $52,000.

C. ****Interests of Experts and counsel

Not applicable.

ITEM 8. FINANCIAL INFORMATION

A. ****Consolidated Statements and Other Financial Information

The consolidated financial statements required to be filed as a
part of this annual report on Form 20-F are filed under Item 17 and incorporated
herein by reference.

B. ****Significant Changes

There have been no significant changes since April 30, 2009
that are not disclosed herein.

ITEM 9. THE OFFER AND LISTING

A. ****The Offer and Listing Details

The Companys post-amalgamation shares were called for trading
on the Toronto Stock Exchange (TSX) and the American Stock Exchange (AMEX),
which is now the NYSE Amex, on April 15, 2002 as PMU. Prior to April 15, 2002
Daytons shares traded as DAY on the TSX and AMEX and the Companys shares
traded as PFG on the TSX. The following table sets forth the high and low
closing prices in Canadian dollars of the common shares traded on the TSX.

Fiscal Period
    High
    LowApril 30, 2009
    0.99
    0.09April 30, 2008
    1.25
    0.83April 30, 2007
    1.43
    0.70April 30, 2006
    1.06
    0.55April 30, 2005
    1.02
    0.60


The following table outlines the high and low market prices for
each fiscal financial quarter for the two most recent full financial years and
any subsequent period:

Fiscal Financial
      Quarter
    High
    LowApril 30, 2009
    0.29
    0.18January 31, 2009
    0.26
    0.09October 31, 2008
    0.41
    0.12July 31, 2008
    0.99
    0.27April 30, 2008
    1.22
    0.83January 31, 2008
    1.27
    0.98October 31, 2007
    1.27
    0.91July 31, 2007
    1.25
    0.87


The following table outlines the high and low market prices for
each of the most recent six months:

Month
    High
    LowJune 2009
    0.375
    0.27May 2009
    0.355
    0.26April 2009
    0.25
    0.19March 2009
    0,22
    0.18February 2009
    0.29
    0.21January 2009
    0.26
    0.17


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B. ****Plan of Distribution

Not Applicable.

C. ****Markets

The Companys common shares trade on both the TSX and the NYSE
Amex under the symbol PMU. The Company has received advice that its shares are
listed and have traded since June 14, 2002 on the Berlin Stock Exchange under
the symbol PRM, German Cusip Number 577332 and in the Regulated Unofficial
Market (Freiverkehr) on the Frankfurt Stock Exchange on the Xetra, the Deutsche
Borse AG electronic trading system since May 31, 2002.

D.****
Selling Shareholders

Not Applicable.

E. ****Dilution

Not Applicable.

F. ****Expenses of the issue

Not Applicable.

ITEM 10. ADDITIONAL INFORMATION

A.****
Share Capital

Not applicable.

B.****
Memorandum and Articles of Association

| | 1. | The Company, was formed on April 11, 2002 by the
      amalgamation of Dayton and Pacific Rim under the former Company Act
      (British Columbia). Now existing under the Business Corporations Act,
      S.B.C. 2002, c. 57 (British Columbia) (the Act), as amended, the
      Company, is permitted to conduct any lawful business that it s not
      restricted from conducting by its Notice of Articles and Articles, neither
      of which contain any restriction on the business the Company may
      conduct.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | 2. | A director who has a disclosable interest in a proposed
      contract or transaction with the Company shall be liable to account to the
      Company for any profits that accrue to the director under or as a result
      of the contract or transaction unless disclosure is made thereof and the
      contract or transaction is approved in accordance with the provisions of
      the Act. A director who holds a disclosable interest in an contract or
      transaction into which the Company has entered or proposes to enter into
      is not entitled to vote on any directors resolution to approve that
      contract or transaction, unless all the directors have a disclosable
      interest in that contract or transaction, in which case any or all of
      those directors may vote on such resolutions. The Articles of the Company
      permit an interested director to be counted in the quorum at the meeting
      whether or not the director votes on any or all of the resolutions
      considered at the meeting. The Company, if authorized by the board of
      directors, may borrow money, issue debt obligations and to charge the
      assets of the Company, provided only that such power is exercised bona
      fide and in the best interests of the Company. There is no mandatory
      retirement age for directors. A director is not required to hold shares of
      the Company.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | 3. | The Company has only one class of common shares, without
      any special rights or restrictions. The dividend entitlement of a
      shareholder of record is fixed at the time of declaration by the board of
      directors. A vested dividend entitlement does not lapse, but unclaimed
      dividends are subject to a statutory six yea contract debts limitation.
      Each common share is entitled to one vote on the election of each
      director. There are no cumulative voting rights, in consequence of which a
      simple majority of votes at the annual meeting can elect all the directors
      of the Company. Each common shares carries with it the right to share
      equally with every other common share in dividends declared an din any
      distribution of surplus assets of the Company after payment to creditors
      on any winding up, liquidation or dissolution. There are no sinking fund
      provisions. All common shares must be fully paid prior to issue and are
      thereafter subject to no further capital calls by the Company. There
      exists no discriminatory provision affecting any existing or prospective
      holder of common shares as a result of such shareholder owning a
      substantial number of shares.                                                                                                                                                

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| | 4. | Pursuant to the Act and the Articles of the Company, the
      rights of shareholders may be changed only by the shareholders passing a
      special resolution approved by two-thirds (2/3) of the votes cast at a
      general meeting of the Company, the notice of which is accompanied by a
      circular describing the proposed action and its effect on the
      shareholders. Certain special resolutions provide that a shareholder may
      dissent in respect of the resolution, by sending a notice of dissent to
      the Company and otherwise complying with the provisions of the Act. A
      shareholder who validly exercises such right of dissent in accordance with
      the Act may have the shares that are subject of the notice of dissent
      purchased by the Company at their fair value.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
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| | 5. | The board of directors must call an annual general
      meeting once in each calendar year and not later than 15 months after the
      last such meeting. The board may call an extraordinary general meeting at
      any time. Notice of such meetings must be accompanied by information
      circular describing the proposed business to be dealt with and making the
      required disclosure regarding the Company and the matters to be considered
      at the meeting. A shareholder or shareholders holding in the aggregate of
      5% of the issued shares of the Company may requisition a meeting and the
      board is required to hold such meeting within four months of such
      requisition. Admission to such meetings is open to registered shareholders
      and their duly appointed proxyholders. Others may be admitted with the
      consent of the meeting.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | 6. | The constating documents of the Company contain no
      limitations on the rights of non-resident or foreign shareholders to hold
      or exercise rights on the shares of the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | 7. | There is no limitation at law upon the right of a
      non-resident to hold shares in a Canadian company. However, the Investment
      Canada Act (Canada) requires certain non-Canadian individuals,
      governments, corporations, agencies or entities who wish to acquire a
      Canadian business or to establish a new Canadian business as those
      terms are defined in that Act, to file a notification or an application
      for review with Investment Canada, a Canadian federal governmental agency.
      The Investment Canada Act requires that certain acquisitions of control of
      a Canadian business by a non-Canadian must be reviewed by the Minister
      responsible for the Act and approved on the basis that the Minister is
      satisfied that the acquisition is likely to be of net benefit to Canada,
      having regard to the criteria set forth in the Act. The Act makes the
      acquisition of control a reviewable event. The Act sets out detailed rules
      for determining whether control has been acquired. The acquisition of
      one-third or more of the voting shares of a corporation may, in some
      circumstances, be deemed to constitute acquisition of control. A
      reviewable acquisition of control may not be implemented before being
      approved by the Minister. If not ultimately approved, a reviewable
      acquisition that has been completed may be subject to an order to divest,
      enforceable by injunction or a court order directing disposition of assets
      or shares.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | 8. | There are no provisions in the Companys constating
      documents that would have an effect of delaying, deferring or preventing a
      change in control of the Company and that would operate only with respect
      to a merger, acquisition or corporate restructuring involving the Company
      or any of its subsidiaries.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | 9. | There are no provisions in the Companys constating
      documents that govern the ownership threshold above which shareholder
      ownership must be disclosed.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

C. ****Material contracts

On October 29, 2008 the Company announced that it had accepted
an offer from its Denton-Rawhide joint venture partner, Kennecott Rawhide Mining
Company (Kennecott), to purchase the net assets the Company holds through its
49% interest in the joint venture. Total compensation for these net assets
included $3.1 million plus 49% of all gold and silver production from the
Denton-Rawhide operation through to December 31, 2008 net of cash production
costs. The Company was entitled to and received 49% of the gold and silver
production from Denton-Rawhide (up to and including all gold and silver produced
to December 31, 2008 only) as per the terms of sale described above. No further
gold or silver production from Denton-Rawhide will be forthcoming to the
Company. Readers are referred to the Companys news release of October 29, 2008
(available at www.pacrim-mining.com)
for further information about the sale of the Denton-Rawhide assets.

D. ****Exchange controls

There are currently no governmental laws, decrees, regulations
or other legislation of Canada which affect the import or export of capital,
including the availability of cash and cash equivalents for use by the Company.

E. ****Taxation

Certain U.S. Federal Income Tax Considerations

The following is a general summary of certain U.S. federal
income tax consequences relevant to a U.S. Holder (as defined below) arising
from and relating to the acquisition, ownership, and disposition of the
Companys common shares.

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This summary is for general information purposes only and does
not purport to be a complete analysis or listing of all potential U.S. federal
income tax consequences that may apply to a U.S. Holder as a result of the
acquisition, ownership, and disposition of the Companys common shares. In
addition, this summary does not take into account the individual facts and
circumstances of any particular U.S. Holder that may affect the U.S. federal
income tax consequences of the acquisition, ownership, and disposition of the
Companys common shares. Accordingly, this summary is not intended to be, and
should not be construed as, legal or U.S. federal income tax advice with respect
to any U.S. Holder. Each U.S. Holder should consult its own tax advisor
regarding the U.S. federal, U.S. state and local, and foreign tax consequences
of the acquisition, ownership, and disposition of the Companys common shares.

No legal opinion from U.S. legal counsel or ruling from the
Internal Revenue Service (the IRS) has been requested, or will be obtained,
regarding the U.S. federal income tax consequences of the acquisition,
ownership, and disposition of the Companys common shares. This summary is not
binding on the IRS, and the IRS is not precluded from taking a position that is
different from, and contrary to, the positions taken in this summary.

Scope of this Summary

Authorities

This summary is based on the Internal Revenue Code of 1986, as
amended (the Code), Treasury Regulations (whether final, temporary, or
proposed), published rulings of the Internal Revenue Service (IRS), published
administrative positions of the IRS, the Convention Between Canada and the
United States of America with Respect to Taxes on Income and on Capital, signed
September 26, 1980, as amended (the Canada-U.S. Tax Convention), and U.S.
court decisions that are applicable and, in each case, as in effect and
available, as of the date of this document. Any of the authorities on which this
summary is based could be changed in a material and adverse manner at any time,
and any such change could be applied on a retroactive basis. This summary does
not discuss the potential effects, whether adverse or beneficial, of any
proposed legislation that, if enacted, could be applied on a retroactive basis.

U.S. Holders

For purposes of this summary, a U.S. Holder is a beneficial
owner of the Companys common shares that is (a) an individual who is a citizen
or resident of the U.S. for U.S. federal income tax purposes, (b) a corporation,
or any other entity classified as a corporation for U.S. federal income tax
purposes, that is created or organized in or under the laws of the U.S. or any
state in the U.S., including the District of Columbia, (c) an estate if the
income of such estate is subject to U.S. federal income tax regardless of the
source of such income, or (d) a trust if (i) such trust has validly elected to
be treated as a U.S. person for U.S. federal income tax purposes or (ii) a U.S.
court is able to exercise primary supervision over the administration of such
trust and one or more U.S. persons have the authority to control all substantial
decisions of such trust.

Non-U.S. Holders

For purposes of this summary, a non-U.S. Holder is a
beneficial owner of the Companys common shares other than a U.S. Holder. This
summary does not address the U.S. federal income tax consequences of the
acquisition, ownership, and disposition of the Companys common shares to
non-U.S. Holders. Accordingly, a non-U.S. Holder should consult its own tax
advisor regarding the U.S. federal, U.S. state and local, and foreign tax
consequences (including the potential application of and operation of any tax
treaties) of the acquisition, ownership, and disposition of the Companys common
shares.

U.S. Holders Subject to Special U.S. Federal Income Tax
Rules Not Addressed

This summary does not address the U.S. federal income tax
consequences of the acquisition, ownership, and disposition of the Companys
common shares to U.S. Holders that are subject to special provisions under the
Code, including the following U.S. Holders: (a) U.S. Holders that are tax-exempt
organizations, qualified retirement plans, individual retirement accounts, or
other tax-deferred accounts; (b) U.S. Holders that are financial institutions,
insurance companies, real estate investment trusts, or regulated investment
companies; (c) U.S. Holders that are dealers in securities or currencies or U.S.
Holders that are traders in securities that elect to apply a mark-to-market
accounting method; (d) U.S. Holders that have a functional currency other than
the U.S. dollar; (e) U.S. Holders that own the Companys common shares as part
of a straddle, hedging transaction, conversion transaction, constructive sale,
or other arrangement involving more than one position; (f) U.S. Holders that
acquired the Companys common shares in connection with the exercise of employee
stock options or otherwise as compensation for services; (g) U.S. Holders that
hold the Companys common shares other than as a capital asset within the
meaning of Section 1221 of the Code; (h) U.S. expatriates or former long-term
residents of the U.S.; or (i) U.S. Holders that own, directly, indirectly, or by
attribution, 10% or more, by voting power or value, of the outstanding shares of
the Company. U.S. Holders that are subject to special provisions under the Code,
including U.S. Holders described immediately above, should consult their own tax
advisor regarding the U.S. federal, U.S. state and local, and foreign tax
consequences of the acquisition, ownership, and disposition of the Companys
common shares.

---

If an entity that is classified as a partnership (or pass-through entity) for U.S. federal income tax purposes holds the Companys common shares, the U.S. federal income tax consequences to such partnership (or
pass-through entity) and the partners of such partnership (or owners of such pass-through entity) generally will depend on the activities of the partnership (or pass-through entity) and the status of such partners
(or owners). Partners of entities that are classified as partnerships (or owners of pass-through entities) for U.S. federal income tax purposes should consult their own tax advisor regarding the U.S. federal income tax consequences of
the acquisition, ownership, and disposition of the Companys common shares.

Other Tax Consequences Not Addressed

This summary does not address the U.S. state and local, U.S. federal alternative minimum tax, U.S. federal estate and gift, or foreign tax consequences to U.S. Holders of the acquisition, ownership, and disposition of the Companys common
shares. Each U.S. Holder should consult its own tax advisor regarding the U.S. state and local, U.S. federal alternative minimum tax, U.S. federal estate and gift, and foreign tax consequences of the acquisition, ownership, and disposition of the
Companys common shares.

U.S. Federal Income Tax Consequences of the Acquisition, Ownership, and Disposition of Common Shares

If the Company is not considered a passive foreign investment company (a PFIC, as defined below) at any time during a U.S. Holders holding period, the following sections will generally describe the U.S. federal income
tax consequences to U.S. Holders of the acquisition, ownership, and disposition of the Companys common shares.

Distributions on Common Shares

A U.S. Holder that receives a distribution, including a constructive
  distribution, with respect to the Companys common shares will be required
  to include the amount of such distribution in gross income as a dividend (without
  reduction for any foreign income tax withheld from such distribution) to the
  extent of the current or accumulated earnings and profits of the
  Company. To the extent that a distribution exceeds the current and accumulated
  earnings and profits of the Company, such distribution will be treated
  (a) first, as a tax-free return of capital to the extent of a U.S. Holders
  tax basis in the common shares and, (b) thereafter, as gain from the sale or
  exchange of such common shares (see Disposition of Common Shares
  below). However, the Company does not intend to maintain the calculations of
  earnings and profits in accordance with U.S. federal income tax principles,
  and each U.S. Holder should therefore assume that any distribution by the Company
  with respect to common shares will constitute ordinary dividend income. Dividends
  paid on common shares generally will not be eligible for the dividends
  received deduction.

For taxable years beginning before January 1, 2011, a dividend paid by the Company generally will be taxed at the preferential tax rates applicable to long-term capital gains if (a) the Company is a qualified foreign corporation (as
defined below), (b) the U.S. Holder receiving such dividend is an individual, estate, or trust, and (c) certain holding period requirements are met.

The Company generally will be a qualified foreign corporation under Section 1(h)(11) of the Code (a QFC) if (a) the Company is incorporated in a possession of the U.S., (b) the Company is eligible for the benefits of the
Canada-U.S. Tax Convention, or (c) common shares of the Company are readily tradable on an established securities market in the U.S.  However, even if the Company satisfies one or more of such requirements, the Company will not be treated as a QFC
if the Company is a PFIC for the taxable year during which the Company pays a dividend or for the preceding taxable year.

As discussed below, the Company does not believe that it was a PFIC for the taxable year ended April 30, 2009 (see more detailed discussion at Passive Foreign Investment Company Rules below). The determination of whether the Company will
be a PFIC for any taxable year depends, in part, on the application of complex U.S. federal income tax rules, which are subject to differing interpretations. In addition, whether the Company will be a PFIC for its current taxable year depends on the
assets and income of the Company over the course of each such taxable year and, as a result, cannot be predicted with certainty as of the date of this document. Consequently, there can be no assurance regarding the Companys PFIC status for any
taxable year during which U.S. Holders hold common shares, and there can be no assurance that the IRS will not challenge the determination made by the Company concerning its PFIC status.

If the Company is not a PFIC, but a U.S. Holder otherwise fails to qualify for the preferential tax rate applicable to dividends discussed above, a dividend paid by the Company to a U.S. Holder, including a U.S. Holder that is an individual, estate,
or trust, generally will be taxed at ordinary income tax rates (and not at the preferential tax rates applicable to long-term capital gains). The dividend rules are complex, and each U.S. Holder should consult its own tax advisor regarding the
dividend rules.

Disposition of Common Shares

A U.S. Holder will recognize gain or loss on the sale or other taxable disposition of common shares in an amount equal to the

---

difference, if any, between (a) the amount of cash plus the fair market value of any property received and (b) such U.S. Holders tax basis in the common shares sold or otherwise disposed of. Subject to the PFIC rules discussed below, any such
gain or loss generally will be capital gain or loss, which will be long-term capital gain or loss if common shares are held for more than one year. Gain or loss recognized by a U.S. Holder on the sale or other taxable disposition of common shares
generally will be treated as U.S. source for purposes of applying the U.S. foreign tax credit rules, unless such gains are resourced as foreign source under an applicable income tax treaty, and an election is filed under the
Code. (See more detailed discussion at Foreign Tax Credit below).

Preferential tax rates apply to long-term capital gains of a U.S. Holder that is an individual, estate, or trust. There are currently no preferential tax rates for long-term capital gains of a U.S. Holder that is a corporation. Deductions for
capital losses are subject to significant limitations under the Code.

Receipt of Foreign Currency

The amount of any distribution paid in foreign currency to a U.S. Holder in connection with the ownership of common shares, or on the sale, exchange or other taxable disposition of common shares, generally will be equal to the U.S. dollar value of
such foreign currency based on the exchange rate applicable on the date of receipt (regardless of whether such foreign currency is converted into U.S. dollars at that time). A U.S. Holder that receives foreign currency and converts such foreign
currency into U.S. dollars at a conversion rate other than the rate in effect on the date of receipt may have a foreign currency exchange gain or loss, which generally would be treated as U.S. source ordinary income or loss. If the foreign currency
received is not converted into U.S. dollars on the date of receipt, a U.S. Holder will have a basis in the foreign currency equal to its U.S. dollar value on the date of receipt. Each U.S. Holder should consult its own U.S. tax advisor regarding the
U.S. federal income tax consequences of receiving, owning, and disposing of foreign currency.

Foreign Tax Credit

A U.S. Holder who pays (whether directly or through withholding) foreign income tax with respect to dividends paid on common shares generally will be entitled, at the election of such U.S. Holder, to receive either a deduction or a credit for such
foreign income tax paid.  Generally, a credit will reduce a U.S. Holders U.S. federal income tax liability on a dollar-for-dollar basis, whereas a deduction will reduce a U.S. Holders income subject to U.S. federal income tax. This
election is made on a year-by-year basis and applies to all foreign taxes paid (whether directly or through withholding) by a U.S. Holder during a year.

Complex limitations apply to the foreign tax credit, including the general limitation that the credit cannot exceed the proportionate share of a U.S. Holders U.S. federal income tax liability that such U.S. Holders foreign
source taxable income bears to such U.S. Holders worldwide taxable income.  In applying this limitation, a U.S. Holders various items of income and deduction must be classified, under complex rules, as either foreign
source or U.S. source. In addition, this limitation is calculated separately with respect to specific categories of income.  Dividends paid by the Company generally will constitute foreign source income and generally
will be categorized as passive income.

Subject to specific rules, foreign taxes paid with respect to any distribution in respect of stock in a PFIC are generally eligible for the foreign tax credit. The rules relating to distributions by a PFIC and their eligibility for the foreign tax
credit are complicated, and a U.S. Holder should consult with their own tax advisor regarding the availability of the foreign tax credit with respect to distributions by a PFIC.

The foreign tax credit rules are complex, and each U.S. Holder should consult its own tax advisor regarding the foreign tax credit rules.

Information Reporting; Backup Withholding Tax For Certain Payments

Under U.S. federal income tax law and regulations, certain categories of U.S. Holders must file information returns with respect to their investment in, or involvement in, a foreign corporation.  Penalties for failure to file certain of these
information returns are substantial.  U.S. Holders of common shares should consult with their own tax advisors regarding the requirements of filing information returns, and if applicable, any mark-to-market election or QEF
election (each as defined below).

Payments made within the U.S., or by a U.S. payor or U.S. middleman, of dividends on, and proceeds arising from certain sales or other taxable dispositions of, common shares generally will be subject to information reporting and backup withholding
tax, at the rate of 28%, if a U.S. Holder (a) fails to furnish such U.S. Holders correct U.S. taxpayer identification number (generally on Form W-9), (b) furnishes an incorrect U.S. taxpayer identification number, (c) is notified by the IRS
that such U.S. Holder has previously failed to properly report items subject to backup withholding tax, or (d) fails to certify, under penalty of perjury, that such U.S. Holder has furnished its correct U.S. taxpayer identification number and that
the IRS has not notified such U.S. Holder that it is subject to backup

---

withholding tax. However, U.S. Holders that are corporations generally are excluded from these information reporting and backup withholding tax rules. Any amounts withheld under the U.S. backup withholding tax rules will be allowed as a credit
against a U.S. Holders U.S. federal income tax liability, if any, or will be refunded, if such U.S. Holder furnishes required information to the IRS on a timely basis. Each U.S. Holder should consult its own tax advisor regarding the
information reporting and backup withholding tax rules.

Passive Foreign Investment Company Rules

If the Company were to constitute a PFIC (as defined below) for any year during a U.S. Holders holding period, then certain different and potentially adverse tax consequences would apply to such U.S. Holders acquisition, ownership and
disposition of common shares.

The Company generally will be a PFIC under Section 1297 of the Code if, for a taxable year, (a) 75% or more of the gross income of the Company for such taxable year is passive income or (b) 50% or more of the assets held by the Company either
produce passive income or are held for the production of passive income, based on the fair market value of such assets (or on the adjusted tax basis of such assets, if the Company is not publicly traded and either is a controlled foreign
corporation or makes an election).  Gross income generally means all revenues less the cost of goods sold, and passive income includes, for example, dividends, interest, certain rents and royalties, certain gains from
the sale of stock and securities, and certain gains from commodities transactions. Active business gains arising from the sale of commodities generally are excluded from passive income if substantially all of a foreign corporations commodities
are (a) stock in trade of such foreign corporation or other property of a kind which would properly be included in inventory of such foreign corporation, or property held by such foreign corporation primarily for sale to customers in the ordinary
course of business, (b) property used in the trade or business of such foreign corporation that would be subject to the allowance for depreciation under Section 167 of the Code, or (c) supplies of a type regularly used or consumed by such foreign
corporation in the ordinary course of its trade or business.

In addition, for purposes of the PFIC income test and asset test described above, if the Company owns, directly or indirectly, 25% or more of the total value of the outstanding shares of another corporation, the Company will be treated as if it (a)
held a proportionate share of the assets of such other corporation and (b) received directly a proportionate share of the income of such other corporation. In addition, for purposes of the PFIC income test and asset test described above,
passive income does not include any interest, dividends, rents, or royalties that are received or accrued by the Company from a related person (as defined in Section 954(d)(3) of the Code), to the extent such items are
properly allocable to the income of such related person that is not passive income.

Under certain attribution rules, if the Company is a PFIC, U.S. Holders will be deemed to own their proportionate share of any subsidiary of the Company which is also a PFIC (a Subsidiary PFIC), and will be subject to U.S.
federal income tax on (i) a distribution on the shares of a Subsidiary PFIC or (ii) a disposition of shares of a Subsidiary PFIC, both as if the holder directly held the shares of such Subsidiary PFIC.

The Company does not believe that it was a PFIC for the taxable year ended April 30, 2009.  The determination of whether the Company will be a PFIC for a taxable year depends, in part, on the application of complex U.S. federal income tax rules,
which are subject to differing interpretations. In addition, whether the Company will be a PFIC for its current taxable year depends on the assets and income of the Company over the course of each such taxable year and, as a result, cannot be
predicted with certainty as of the date of this Form 20-F. Consequently, there can be no assurance regarding the Companys PFIC status for any taxable year during which U.S. Holders hold common shares, and there can be no assurance that the IRS
will not challenge the determination made by the Company concerning its PFIC status.

Under the default PFIC rules, a U.S. Holder would be required to treat any gain recognized upon a sale or disposition of our common shares as ordinary (rather than capital), and any resulting U.S. federal income tax may be increased by an interest
charge which is not deductible by non-corporate U.S. Holders. Rules similar to those applicable to dispositions will generally apply to distributions in respect of our common shares which exceed a certain threshold level.

While there are U.S. federal income tax elections that sometimes can be made to mitigate these adverse tax consequences (including, without limitation, the QEF Election and the Mark-to-Market Election), such elections are
available in limited circumstances and must be made in a timely manner. U.S. Holders are urged to consult their own tax advisers regarding the potential application of the PFIC rules to the ownership and disposition of our common shares, and the
availability of certain U.S. tax elections under the PFIC rules.

U.S. Holders should be aware that, for each taxable year, if any, that the Company or any Subsidiary PFIC is a PFIC, the Company can provide no assurances that it will satisfy the record keeping requirements of a PFIC, or that it will make available
to U.S. Holders the information such U.S. Holders require to make a QEF Election under Section 1295 of the Code with respect of the Company or

---

any Subsidiary PFIC. Each U.S. Holder should consult its own
tax advisor regarding the availability of, and procedure for making, a QEF
Election with respect to the Company and any Subsidiary PFIC.

F.****
Dividends and paying agents

Not applicable

G. ****Statement by experts

Not applicable.

H.****
Documents on display

All documents referred to in this annual report on Form 20-F
are available for inspection at the office of the Company, listed below, during
normal office hours:

Pacific Rim Mining Corp. 
  Suite 1050, 625 Howe Street 
  Vancouver, British Columbia 
  V6C 2T6 
  Canada

I. ****Subsidiary Information

Not applicable.

ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT
MARKET RISK

A. ****Quantitative Disclosure about Market Risk

The Company holds its cash and cash equivalents primarily in
U.S. dollar and Canadian dollar denominated accounts and its expenses are
primarily incurred in U.S. dollars. At April 30, 2009 the amount of cash and
cash equivalents held in Canadian dollars was $214,544, the amount of accounts
receivable was 12,379 and the amount of accounts payable and accrued liabilities
was (64,533). Based on these net exposures at April 30, 2009 and assuming that
all other variables remain constant, a 10% depreciation or appreciation of the
US dollar against the Canadian dollar would result in an increase or decrease of
$14,906 in the Companys net earnings.

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.

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


Holdings of gold and silver bullion are valued at the lesser of
cost when received or net realizable value. As at April 30, 2009, the Company
had 1,460 ounces of gold and 11,974 ounces of silver on hand.

The exposure of the Companys financial instruments to interest
risk continues to be limited.

---

B.****
Qualitative Disclosure about Market Risk

The Companys objectives when managing capital and risk are:

- To maintain adequate capital to operate its business and safeguard its
  ability to continue as a going concern; and
- To minimize the use of debt prior to the commencement of development
  activities

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.

Credit Risk

Credit risk is the risk that the counterparty to a financial
instrument will cause a financial loss for the Company by failing to discharge
its obligations. The Companys credit risk is primarily attributable to its
liquid financial assets. The Company limits its exposure to credit risk by
depositing its cash and cash equivalents with international financial
institutions. The Company does not have financial assets that are invested in
asset based commercial paper.

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. The Company does not have any hedging programs in place to mitigate
commodity price risk.

Foreign Currency Risk

Foreign exchange risk is the risk that the fair value of the
Companys financial instruments will fluctuate because of changes in foreign
exchange rates. The Company holds its cash and cash equivalents primarily in
U.S. dollar and Canadian dollar denominated accounts and its expenses are
primarily incurred in U.S. dollars. At April 30, 2009 the amount of cash and
cash equivalents held in Canadian dollars was $214,544, the amount of accounts
receivable was $12,379 and the amount of accounts payable and accrued
liabilities was $(64,533). Based on these net exposures at April 30, 2009 and
assuming that all other variables remain constant, a 10% depreciation or
appreciation of the U.S. dollar against the Canadian dollar would result in an
increase or decrease of $14,906 in the Companys net earnings. The Company has
not entered into any derivative contracts to manage foreign exchange risk at
this time.

Liquidity Risk

Liquidity risk is the risk that the Company will encounter
difficulty in meeting obligations associated with financial liabilities. The
Company has made significant cuts to its expenses during fiscal 2009 and
believes it has sufficient cash and cash equivalents and bullion on deposit to
meet its exploration and general and administrative responsibilities in fiscal
2010. The Company does not, however, have sufficient working capital to fully
fund the estimated costs of pursuing the CAFTA action against the Government
that Pac Rim commenced during fiscal 2009. The Company anticipates requiring
financing during fiscal 2010 to continue to pursue this action through to
completion.

Fair Values

As at April 30, 2009, the Companys carrying values of
receivables, deposits and accounts payable approximate fair values due to their
short terms to maturity. The bullion is valued at the lesser of cost when
received or net realizable value.

ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY
SECURITIES

Not Applicable.

PART II

ITEM 13. DEFAULTS, DIVIDENT ARREARAGES AND DELINQUENCIES

Not Applicable

---

ITEM 14 MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY
HOLDERS AND USE OF PROCEEDS

A-D.

None

E. ****Use of Proceeds

Not Applicable

ITEM 15. CONTROLS AND PROCEDURES

A. ****Disclosure controls and procedures

Management has designed disclosure controls and procedures, or
has caused them to be designed under its supervision, to provide reasonable
assurance that material information related to the Company is gathered and
reported to senior management, including the Chief Executive Officer (CEO) and
Chief Financial Officer (CFO), as appropriate to permit timely decisions
regarding public disclosure.

The Company has changed its disclosure controls during the
twelve months ended April 30, 2009 that has materially affected, or is
reasonably likely to materially affect, its control over disclosures. Due to
staffing changes made during the year, 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 be considered a material weakness in its disclosure controls and
procedures.

B. ****Managements annual report on internal control over financial reporting

Management is responsible for establishing and maintaining
adequate internal control over financial reporting, as defined in Rule 13a-15(f)
under the Exchange Act.

Management has designed internal control over financial
reporting, or caused it to be designed under its supervision, to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements. Any system of internal control over
financial reporting, regardless of how well designed, has inherent limitations.
As such, even those systems determined to be effective can provide only
reasonable assurance with respect to financial statement preparation and
presentation.

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.

A material weakness is a control deficiency, or combination of
control deficiencies, such that there is a reasonable possibility that a
material misstatement of the annual or interim consolidated financial statements
will not be prevented or detected on a timely basis.

The Companys CEO and CFO assessed the effectiveness of the
Companys internal control over financial reporting and have assessed the design
and operating effectiveness of the Companys internal control over financial
reporting as at April 30, 2009:

Based on that assessment, management 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 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. The 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 that taking into account the present
stage of the Companys development the Company does not have sufficient size and
scale to warrant hiring of additional staff to correct the weakness at this
time.

C. ****Attestation report of the registered public accounting firm

This annual report on Form 20-F does not include an attestation
report of the Companys registered public accounting firm regarding internal
control over financial reporting. Managements report was not subject to
attestation by the Companys registered public

---

accounting firm pursuant to temporary rules of the SEC that
permit the Company to provide only Managements report in this annual
report.

D. ****Changes in internal control over financial reporting

During the period covered by this annual report on Form 20-F,
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 financial reporting.
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.
The 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 that taking into account the present
stage of the Companys development the Company does not have sufficient size and
scale to warrant hiring of additional staff to correct the weakness at this
time.

ITEM 16 [RESERVED]

ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT

David Fagin and Paul Sweeney are financial experts, in that
they have an understanding of generally accepted accounting principles and
financial statements; is able to assess the general application of accounting
principles in connection with the accounting for estimates, accruals and
reserves; have experience preparing, auditing, analyzing or evaluating financial
statements that entail accounting issues of equal complexity to the Companys
financial statements (or actively supervising another person who did so); have
an understanding of internal controls and procedures for financial reporting and
an understanding of audit committee functions.

Mr. Fagin does not have an accounting designation; instead his
expertise is derived from his high level involvement in the financial matters of
public corporations almost continuously for at least 35 years. Mr. Fagin was
involved in the valuation of oil and gas companies for ten years both as a
consultant and a bank appraisal engineer (1958-68); President of a subsidiary of
Rosario Resources Corporation, a NYSE company (1968-75) and then Executive
Vice-President (1975-77) then President (1977-82) during which period he was
intimately involved in financial and accounting matters. In 1982, he founded
Fagin Exploration Company and worked closely with an accountant and auditors to
maintain the records. From 1986 to 1991, Mr. Fagin was the President and Chief
Operating Officer for Homestake Mining Corporation (NYSE), responsible for
producing operations in six countries and was involved in decisions for
corporate financial reporting. Between 1992 and 1996, Mr. Fagin was Executive
Chairman of Golden Star Resources Ltd. (ASE and TSE) and managed all
administrative matters including annual reports, audits and registration in
Canada and the U.S. Since 1987, Mr. Fagin has served on boards and audit
committees of several public companies including T. Rowe Price Mutual Funds,
Golden Star Resources Ltd., Canyon Resources Corp. (recently acquired by Atna
Resources Ltd.), Dayton Mining Corp. and the Company, where he was either
Chairman or a member of each audit committee. He is currently a director of Atna
Resources Ltd.

Mr. Sweeney does not have an accounting designation. However,
Mr. Sweeney has a solid background in accounting and financial management and
started his accounting career in 1972. From 1987 to 1993 he worked with Placer
Dome Inc. as Chief Financial Officer (1987-1989) of an Australian subsidiary
operating five mines in Australia and Papua New Guinea. Mr. Sweeney was
responsible for all accounting, financial and marketing requirements; then
Assistant Treasurer (1989-1991) at Vancouver head office where he was
responsible for the review of financial needs for all members of the Placer Dome
group worldwide risk management and debt administration; and director,
development planning (1991-1993) where he was responsible for the development of
plans relating to the existing assets and cash flow by the group worldwide.
Since 1994, Mr. Sweeney has served as the Chief Financial Officer of several
public companies including Princeton Mining Corporation, Sutton Resources Ltd.,
Manhattan Minerals Corp. and Canico Resource Corp. where he was responsible for
all finance, accounting and taxation matters. Currently he is the Executive Vice
President, Business Development of Plutonic Power Corporation. Mr. Sweeney will
not be standing for re-election at the Meeting.

ITEM 16B. CODE OF ETHICS

The Company has had in place, since 2002, a Code of Conduct and
Ethics (the Code). A revised Code was approved by the Board of Directors of
the Company on December 17, 2002. A copy of the Code can be found on the
Companys website at http://www.pacrim-mining.com/s/CorporateGovernance.asp

There have never been any departures or material waivers of the
Code since its inception.

---

ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES

During the year ended April 30, 2007, Staley Okada &
Partners entered into a transaction with PricewaterhouseCoopers LLP under which
certain assets of Staley, Okada & Partners were sold to
PricewaterhouseCoopers LLP and a number of professional staff and partners of
Staley, Okada, & Partners joined PricewaterhouseCoopers LLP either as
employees or partners of PricewaterhouseCoopers LLP and will carry on practicing
as members of PricewaterhouseCoopers LLP. The directors subsequently appointed
PricewaterhouseCoopers LLP as the Companys auditors for the year ending April
30, 2008.

PricewaterhouseCoopers LLP acted at the Companys independent
auditor for the fiscal years ended April 30, 2008 and April 30, 2009. The chart
below sets forth the total amount billed to the Company by
PricewaterhouseCoopers LLP for services performed in the last two fiscal years
and breaks down these amounts by category of service (for audit fees,
audit-related fees, tax fees and all other fees) in Canadian dollars:

External Auditor Service Fees (By Category), (in Canadian
Dollars)

Financial Year Ended
    Audit Fees(1)
    Audit Related
      Fees(2)
    Tax Fees(3)
    All Other Fees(4)April 30, 2009
    $330,650
    $Nil
    Nil
    NilApril 30, 2008
    $230,000
    $44,841
    $5,000
    $7,500


|(1) | The aggregate audit fees billed.                                                                                                                                                                                                                  
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | The aggregate fees billed for assurance and related
      services that are reasonably related to the performance of the audit or
      review of the Companys financial statements, which are not included under
      the heading Audit Fees.
|(3) | The aggregate fees billed for professional services
      rendered for tax compliance, tax advice and tax planning.                                                                                                                               
|(4) | The aggregate fees billed for products and services other
      than as set out under the heading Audit Fees, Audit Related Fees and
      Tax Fees.                                                                                        

Audit Fees are the aggregate fees billed by
PricewaterhouseCoopers LLP for the audit of the Companys consolidated annual
financial statements and attestation services that are provided in connection
with statutory and regulatory filings or engagements.

Audit-Related Fees are the fees billed by
PricewaterhouseCoopers LLP for assurance and related services that are
reasonably related to the performance of the audit or review of the Companys
financial statements and are not reported under Audit Fees. This category
comprises fees billed for independent accountant review of the interim financial
statements and Management Discussion and Analysis, as well as advisory services
associated with the Companys financial reporting.

Tax Fees are the fees billed for professional services
rendered by PricewaterhouseCoopers LLP for tax compliance, tax advice, and tax
planning

Pre-Approval Policies and Procedures

The Audit Committee nominates and engages the independent
auditors to audit the financial statements, and approves all audit,
audit-related services, tax services and other services provided by independent
auditors. Any services provided by the independent auditors that are not
specifically included within the scope of the audit must be pre-approved by the
Audit Committee prior to any engagement. The Audit Committee is permitted to
approve certain fees for audit-related services, tax services and other services
pursuant to a de minimusexception before the completion of the
engagement.

ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT
COMMITTEES

None.

ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND
AFFILIATED PURCHASERS

None.

ITEM 16F. CHANGE IN REGISTRANTS CERTIFYING ACCOUNTANT

None.

---

ITEM 16G. CORPORATE GOVERNANCE

The Companys common shares are listed on the NYSE Amex.
Section 110 of the Amex Company Guide permits the NYSE Amex to consider the
laws, customs and practices of foreign issuers in relaxing certain NYSE Amex
listing criteria, and to grant exemptions from NYSE Amex listing criteria based
on these considerations. A company seeking relief under these provisions is
required to provide written certification from independent local counsel that
the non-complying practice is not prohibited by home country law. A description
of the significant ways in which the Companys governance practices differ from
those followed by domestic companies pursuant to NYSE Amex standards is as
follows:

Shareholder Meeting Quorum Requirement: The NYSE Amex
minimum quorum requirement for a shareholder meeting is one-third of the
outstanding shares of common stock. In addition, a company listed on the NYSE
Amex is required to state its quorum requirement in its bylaws. The Companys
quorum requirement is set forth in its Memorandum and Articles. A quorum for a
meeting of members of the Company is two persons who are, or who represent by
proxy, shareholders who, in the aggregate, hold at least 5% of the shares
entitled to be voted at the meeting.

Proxy Delivery Requirement: The NYSE Amex requires the
solicitation of proxies and delivery of proxy statements for all shareholder
meetings, and requires that these proxies shall be solicited pursuant to a proxy
statement that conforms to SEC proxy rules. The Company is a foreign private
issuer as defined in Rule 3b-4 under the Exchange Act, and the equity
securities of the Company are accordingly exempt from the proxy rules set forth
in Sections 14(a), 14(b), 14(c) and 14(f) of the Exchange Act. The Company
solicits proxies in accordance with applicable rules and regulations in Canada.

The foregoing are consistent with the laws, customs and
practices in Canada.

In addition, we may from time-to-time seek relief from the NYSE
Amex corporate governance requirements on specific transactions under Section
110 of the NYSE Amex Company Guide by providing written certification from
independent local counsel that the non-complying practice is not prohibited by
our home country law, in which case, we shall make the disclosure of such
transactions available on our website at www.pacrim-mining.com. Information
contained on our website is not part of this annual report.

PART III

ITEM 17. FINANCIAL STATEMENTS

Audited Annual Financial Statements

The audited consolidated financial statements of the Company
for the years ended April 30, 2009 and 2008, including the report of the
independent auditor with respect thereto, are filed as Exhibit 1 and
incorporated by reference in this annual report on Form 20-F. For a
reconciliation of important differences between Canadian and United States
generally accepted accounting principles, see Note 14 to the Companys audited
consolidated financial statements.

ITEM 18 FINANCIAL STATEMENTS

The Company elected to provide financial statements pursuant to
Item 17.

---

ITEM 19 EXHIBITS

EXHIBITS

|1.             | The following audited
      consolidated financial statements of the Company, are exhibits to and form
      a part of this Report:                            
|-------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------
|               |                                                                                                                                                                
|               | Auditors Report
      on Consolidated Financial Statements                                                                                                    
|               |                                                                                                                                                                
|               | Consolidated Balance
      Sheets as at April 30, 2009 and April 30, 2008;                                                                                     
|               |                                                                                                                                                                
|               | Consolidated Statements
      of Loss for the years ended April 30, 2009, 2008 and 2007;                                                                       
|               |                                                                                                                                                                
|               | Consolidated Statements
      of Shareholders Equity;                                                                                                         
|               |                                                                                                                                                                
|               | Consolidated Statements
      of Cash Flows for the years ended April 30, 2009, 2008 and 2007;                                                                 
|               |                                                                                                                                                                
|               | Consolidated Statement
      of Comprehensive Loss for the year ended April 30, 2009                                                                           
|               |                                                                                                                                                                
|               | Notes
        to Consolidated Financial Statements (which includes a reconciliation
        with United States GAAP as Note 14)                                
|               |                                                                                                                                                                
|CERTIFICATIONS
|              
|2.             | Certificate
        of Chief Executive Officer Pursuant to Rule 13a-14(a) of the Exchange
        Act                                                          
|               |                                                                                                                                                                
|3.             | Certificate
        of Chief Financial Officer Pursuant to Rule 13a-14(a) of the Exchange
        Act                                                          
|               |                                                                                                                                                                
|4.             | Certificate
        of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted
        pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|               |                                                                                                                                                                
|5.             | Certificate
        of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted
        pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|               |                                                                                                                                                                
|CONSENTS      
|               |                                                                                                                                                                
|6.             | Consent
        of PricewaterhouseCoopers LLP, Chartered Accountants                                                                                           
|               |                                                                                                                                                                
|7.             | Consent of William Gehlen,
      Certified Professional Geologist                                                                                              

---

SIGNATURES

The Registrant hereby certifies that it meets all of the
requirements for filing on Form 20-F and has duly caused and authorized the
undersigned to sight this annual report on its behalf.

| | PACIFIC RIM MINING CORP.                    
| | --------------------------------------------
| |                                             
| |                                             
| | By: Thomas C.
      Shrake                
| | Name: Thomas C. Shrake                      
| | Title: President and Chief Executive Officer

Date: July 24, 2009

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