Ms. Lori McClenahan reports

ST. ELIAS MINES LTD. ANNOUNCES EXPLORATION AND DEVELOPMENT PLANS FOR TESORO PROJECT IN PERU

St. Elias Mines Ltd. has released further exploration and development plans for its wholly owned Tesoro gold project in southern Peru. St. Elias also urged shareholders to vote the white proxy for the company's nominees to the board of directors.

"After careful review, we have adopted a two-part strategy to advance our Tesoro project over 18 to 24 months," said Lori McClenahan, president and chief executive officer of St. Elias Mines. "In order to carry out the strategy we will need additional capital. We are focused on completing our financing and hope to do so during early 2013, if market conditions permit."

One part of the Tesoro strategy involves exploration to explore for new gold-bearing material. St. Elias has established a number of attractive targets for a 3,000-metre-to-5,000-metre diamond drilling campaign.

The other part of the strategy involves development focused on more than 20 waste rock dumps left behind by prior mining activity. St. Elias intends to sample and test the dumps and prepare a National Instrument 43-101 resource estimate. St. Elias proposes to follow up with a prefeasibility study to determine whether gold could be profitably recovered from the dumps, providing cash to support additional exploration.

St. Elias continues to encourage shareholders to vote the white proxy to elect the five St. Elias nominees. The annual special and general meeting of St. Elias shareholders is scheduled for Dec. 27, 2012, at 11 a.m. Vancouver time. Shareholders who wish to vote the white proxy for the St. Elias nominees have only one more day to vote prior to the proxy voting deadline of Friday, Dec. 21, 2012, at 11 a.m. (Vancouver time).

St. Elias also continues to believe that a circular issued by dissidents Gilby Len Hastman and Darcy Kim Hastman is deficient and that the dissident nominees lack relevant experience. The dissidents still have not provided any details of how they intend to advance St. Elias's portfolio of high-potential properties, nor have they proposed a management team to operate St. Elias. Not one of the remaining dissidents has experience in mineral exploration or corporate finance, and not one has previously served as a director of any publicly traded company.

The nominees put forward by the company are experienced and capable. Under their supervision, the current management team will advance the company's exploration properties and raise awareness of St. Elias in a prudent and measured way -- all with a view to surfacing value for its shareholders.

Please review the management information circular at the company's website or SEDAR and vote only the white proxy. Vote today. If you have questions or seek assistance with voting your white proxy, please call the company's proxy solicitation agent Georgeson toll-free at 1-888-605-8412.

Details of proposed exploration drilling activities

Subject to the availability of additional capital, St. Elias proposes diamond drilling of 3,000 to 5,000 metres in order to:

• The company plans to test the extensions (both vertical and along strike) of some of the known gold-bearing quartz veins (notably the A-4, C-1, C-2 and Poderosa veins). The geologically modelled strike extensions of both the C-1 and C-2 vein systems are covered by a 10-to-30-metre-thick blanket of dacite tuff both to the east and west of the previously drilled outcropping vein segments.
• The company plans to explore for high-grade gold in deep, down-plunge extensions of the steeply plunging gold-bearing ore shoots in the A-4, C-2 and Poderosa veins. The ore shoots in these veins were thoroughly exploited by independent miners in past years, but production was limited to a few tonnes per day.
• The company plans to explore for high-grade gold in selected parts of the A-4, C-2 and Poderosa veins, notably the inferred down-plunge ore shoots in these veins that were thoroughly exploited by independent miners in years past. These are worthwhile drill targets because past production in each mine was limited to a few tonnes per day.

An existing Category 1 EIA drilling permit (allowing St. Elias to drill 20 platforms or less) is in place that allows the company to continue drilling at Tesoro if the existing 20 drill pads already in place are utilized again. An environmental impact study (EIA) to support an expanded drill permit (allowing a virtually unlimited number of drill platforms) is nearing completion.

Details of proposed development activities

Subject to the availability of additional capital, St. Elias intends to complete the National Instrument 43-101-compliant resource estimate on the waste rock dumps (by mid-2014). These dumps are unusual because they were left behind by informal miners who rejected any material that was visually estimated to grade less than 15 grams per tonne (g/t) gold.

Peliminary surface pit sampling of the larger dumps returned sample grades ranging from 0.5 to five g/t. Mechanized trenching of the dumps has been under way since Oct. 3, 2012, preparing sample sites within the deeper sections of the dumps. Systematic metallurgical bench testing of dump material will begin once all of the dump sample assays have been received and compiled.

If the National Instrument 43-101-compliant resource estimate justifies further development, St. Elias would proceed with a prefeasibility study that will incorporate resource data, metallurgical data and preliminary cost estimates for a full-scale gold recovery project at Tesoro. The most likely approach would be a combined vat (agitated) leach and heap leach gold recovery project. The purchase and installation of a small and simple (50-tonne-per-day) processing plant to process screened dump feed will be considered if the prefeasibility study so recommends.

We seek Safe Harbor.