Breakwater Resources Ltd.'s 2008 First Quarter Financial and Operating Results

Market Wire, May, 2008

Breakwater Resources Ltd. (TSX: BWR) reports the financial and operating results for the interim period ended March 31 2008. The reporting currency is Canadian dollars ("C$" or "$") and all amounts disclosed are in Canadian dollars unless otherwise indicated.

The Company is a mining, exploration and development company which produces zinc, copper, lead and gold concentrates. The Company's concentrate production is derived from mines located in Canada, Chile and Honduras. The Langlois mine, located in Canada, began production in November 2006 and commenced commercial production for accounting purposes on July 1, 2007. The start-up of the Langlois mine affects all aspects of the Company's financial results which makes comparisons between periods difficult.

HIGHLIGHTS

The Company realized a loss of $6.9 million or $0.02 per share in the first quarter of 2008 compared with net earnings of $15.3 million or $0.04 per share in the first quarter of 2007. The main items affecting the drop in net earnings quarter over quarter were:

- $3.9 million higher gross sales revenue primarily due to the impact of Langlois sales and higher prices for copper, lead, gold and silver partially offset by a 30% reduction in the realized zinc price and a 14% appreciation in the C$ in 2008. In US$ terms, gross sales revenue were US$14.5 million higher.

- Sales of concentrate in the first quarter of 2008 increased 51% to 59,210 tonnes from 39,333 in the first quarter of 2007 primarily due to 17,112 tonnes from Langlois and greater sales at Myra Falls and Toqui

- $24.4 million higher direct operating costs primarily due to increased concentrate sales, the addition of sales from Langlois and higher costs at Mochito and Myra Falls

- $3.1 million of decreased investment and other income primarily due to the lower valuation of conversion rights in certain convertible debentures held by the Company and lower interest income

- $1.8 million increased exploration expenses primarily due to $2.1 million increased exploration expenses at Langlois

- $5.4 million decreased income tax provision was primarily due to a reduction in tax expense by $2.2 million associated with flow through shares issued and a $1.9 million reduction in Mochito tax provision

Concentrate produced in the first quarter of 2008 increased by 10% to 73,481 tonnes from 66,895 tonnes primarily due to increased production at Langlois, Myra Falls and Toqui offset by lower production at Mochito.

The Company estimated that inventories shipped but not recognized for revenue purposes, at March 31, 2008, had earnings before tax of $14.4 million on 58,103 tonnes of concentrate compared with earnings before tax of $8.4 million on 51,100 tonnes of concentrate at December 31, 2007.

Subsequent to the quarter end, on April 10, 2008, the Company purchase a 3% net smelter royalty at the Myra Falls mine established in December 2007 in conjunction with the creation of a qualifying environmental trust for 13,518,739 Common Shares.

Additionally, on April 15, 2008, the Company issued 7.0 million Common Shares to acquire Metco Resources Inc. ("Metco") to consolidate its land position in Lebel-sur-Quevillon and acquire a large under explored land package in the prolific Matagami camp.

OUTLOOK

Mochito

The ground control problems experienced in the first quarter have been addressed through the engineering, design and installation of the proper ground support systems and media. This initiative is ongoing throughout the mine and is expected to be completed during the third quarter. The mine is not revising its production forecast.

The Company continues to refine the exploration model for the Big Fuzzy target. Several initiatives are underway to improve the geological data base at Mochito which will generate new targets for exploration.

Construction work on increasing the capacity of the Pozo Azul tailings facility is on schedule and will provide the required tailings capacity while the Soledad facility is being repaired. These repairs are ongoing with completion scheduled for late 2009.

Toqui

The pre-feasibility study is on schedule to be delivered in the third quarter this year. Drill results continue to support the concept of a 1 million tonne per annum mill.

The new lead flotation circuit is expected to be operational in the second quarter. Engineering studies are on going for a thickened backfill plant which will allow for pillar recovery and paste deposition of tailings.

Myra Falls

The bumping provisions associated with announced layoffs will be finalized in early July. The completion of this process will result in a reduction in operating costs of $1.5 to $1.7 million per month.

The exploration drilling program on the Marshall zone was encouraging during the quarter and follow up drilling is on going.

Langlois

Ramp up of production continued during the first quarter of 2008. Production from Zone 97 has commenced and Langlois is expected to meet the 2008 production guidance.

STATEMENT OF OPERATIONS REVIEW -- THREE MONTHS ENDED MARCH 31, 2008 AND 2007