Breakwater Resources Ltd.'s Third Quarter 2010 Financial and Operating Results

Net Earnings Strong as Metal Prices Continue to Improve

TORONTO, ONTARIO--(Marketwire - Nov. 1, 2010) - Breakwater Resources Ltd. (TSX:BWR)(TSX:BWR.WT.A) realized net earnings of $19.6 million or $0.28 per share in the third quarter of 2010 compared with net earnings of $6.5 million or $0.10 per share in the third quarter of 2009.

Revenues Higher, Costs Higher

Gross sales revenue was 30% higher at $93.3 million primarily due to significantly higher metal prices and more concentrate sold partially offset by a stronger C$ and higher price protection losses. Concentrate produced in the third quarter of 2010 decreased 11% to 48,819 tonnes compared with the third quarter of 2009 due to 13%, 15% and 6% decreases at Myra Falls, Toqui and Mochito respectively.

Direct operating costs were 24% higher in the third quarter of 2010 at $41.9 million compared with $33.9 million in the third quarter of 2009. The increased costs were primarily due to 8% higher quantity of concentrate sold and higher costs at Toqui and Myra Falls. On a cost per tonne of concentrate sold basis, direct operating costs increased to $709 in the third quarter of 2010 from $620 in 2009 primarily due to the factors noted above.

Cash

Cash and cash equivalents increased by $12.5 million in the third quarter of 2010 to $88.5 million at September 30, 2010.

Net Cash Provided By Operating Activities

Net cash provided by operating activities was $30.0 million for the three month period ended September 30, 2010 compared with $6.3 million in the same period in 2010.

Capital Expenditures

The Company invested $45.9 million in mineral properties and fixed assets in first nine months of 2010. At mining operations, $15.1 million, $21.6 million, $5.2 million and $3.7 million were spent at Mochito, Toqui, Myra Falls and Langlois respectively. Corporate capital expenditures were $0.3 million primarily related to joint venture exploration payments.

• Rehabilitation of the 2100 level, which will improve the movement of personnel and materials, is on time and budget with completion expected in the fourth quarter of 2010

• The paste backfill facility, which will allow for paste tailings deposition and enhanced ore extraction through greater recovery of current and future pillars, is expected to be completed in the fourth quarter of 2010. Currently, the construction program is approximately ten weeks behind schedule due to various issues, including those related to the movement of materials and the availability of skilled people following the February 2010 earthquake in Chile; inclement weather throughout the construction period; and the seven day strike
• The installation of a primary ball mill will allow 15% greater throughput and is proceeding according to plan with an expected completion date in the fourth quarter of 2010

• Work continues to improve metallurgical recoveries in the mill with favourable preliminary results
• Development necessary to properly delineate the Marshall deposit is advancing well with the first drill station expected to be established by the end of the fourth quarter of 2010
• Tailings disposal facility seismic berm upgrade is on schedule and is expected to be completed in the fourth quarter of 2010

• Development plans continue at Langlois for the balance of 2010 which include, advancing two ramps – one from surface to the top of zone 4 and one internal to zone 3 and selective development of production headings
• The Company plans to increase the rate of mine development as it moves towards a production restart, currently planned for the first quarter of 2012, and has arranged to purchase a new development jumbo drill and conduct additional work, which will result in capital expenditures for 2010 being approximately $1.7 million higher than previously disclosed

David M. Petroff, President and Chief Executive Officer, stated that, "We are pleased to have posted another solid quarter. Our balance sheet was further strengthened during this quarter while we continued to protect revenues on the downside. That said we were not without our challenges. Across the company, we expect to spend an additional $8.0 million on capital expenditures for 2010 due to an expansion of the capital program at Langlois and approximately $9.7 million of cost overruns in the paste plant and ball mill at Toqui combined with the impact of a stronger Chilean peso partially offset by lower capital expenditures at Myra Falls. Operating costs per tonne milled (on a production basis) and production of zinc, copper, and gold for the first nine months of 2010 are in line with 2010 guidance. Due largely to Mochito, we expect to produce 16,000 tonnes of lead and 2.4 million ounces of silver in concentrate."

GROSS SALES REVENUE – THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2010 AND 2009

A breakdown of gross sales revenue for the three month periods ended September 30, 2010 and 2009 is set forth in the following table.

A breakdown of gross sales revenue for the nine month periods ended September 30, 2010 and 2009 is set forth in the following table.

PRICE PROTECTION STRATEGY

As at November 1, 2010 the Company's hedge position consisted of:

Puts Bought:

As at November 1, 2010, the Company had locked in pricing for payable zinc of 7,450 tonnes with certain customers for the fourth quarter of 2010 at a weighted average price of US$2,214 per tonne.

PRODUCTION RESULTS

The table below summarizes, on a production basis, the Company's metal contained in concentrate, before smelting deductions, for the periods presented.

The complete unaudited consolidated interim financial statements for the periods ended September 30, 2010, with the comparative figures for the periods ended September 30, 2009, the related notes, and management's discussion and analysis of the financial and operating results have been filed on www.sedar.com. Additionally, the documents have been made available on our website at .http://www.breakwater.ca/Investors/AnnualandQuarterlyReports/default.aspx

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