Pacific Rim Suspends Further Drilling in El Salvador Until Mining Permit Granted; Local Staffing Reduced

Pacific Rim Mining Corp. ("Pacific Rim" or "the Company") (TSX: PMU)(AMEX: PMU) has taken the first steps toward reducing its El Salvador work force in preparation for a slow down in exploration and investment activity on its El Dorado, Santa Rita and Zamora-Cerro Colorado gold projects in El Salvador. As the El Dorado drilling program consumed the bulk of the Company's direct exploration costs in El Salvador, the Company believes it is prudent to reduce its drilling expenditures and suspend drilling activity for the time being. This reduction in exploration activity will continue until such time as the Company's long sought after mining permit for the El Dorado project is granted. In the meantime, Pacific Rim is shifting its generative exploration efforts out of El Salvador to Costa Rica and Guatemala; two jurisdictions that are geologically similar but more politically stable for mining investment.

Pacific Rim is not abandoning its El Salvadoran assets and is continuing in earnest its wide-ranging diplomatic efforts to secure a mining permit for its flagship El Dorado gold project. The Company will continue to conduct the exploration work necessary to maintain its El Salvador properties in good standing. However, the Company can not continue to invest millions of dollars annually in advancing its El Salvador gold projects, particularly El Dorado, until such time as the Government of El Salvador signals its willingness to proceed with development of El Dorado by granting the mining permit. The Company's rights in El Salvador are being ignored by the Government of El Salvador. Pacific Rim, through its independent operating subsidiaries, will continue to pursue those rights, relying on both El Salvadoran law and the Central American Free Trade Agreement (CAFTA).

"Pacific Rim and its predecessors have invested approximately $77 million on gold exploration and development in El Salvador with exceptional results," says Tom Shrake, President & CEO. "We have provided the Government of El Salvador with an environmental study and mine design for El Dorado that exceeds both El Salvadoran and international standards and provides a very high environmental benchmark for future developments. Our exploration team has unraveled the complex volcanic geology of the region resulting in the discovery of several previously unknown epithermal gold systems. This exploration success has the potential to spawn a modern, clean mining industry in El Salvador that will create thousands of well-paying jobs alleviating the extreme poverty of the northern half of the country. We have built our "social license" and enjoy excellent local support in Cabanas and majority national support. Pacific Rim entered El Salvador cautiously and prudently and was encouraged every step of the way by the highest levels of Government. Unfortunately, the Government of El Salvador is now stalling the process without regard to the Company's rights deriving from its substantial investments in the country. While we would vastly prefer the negotiated solution we seek, we are being forced to consider all options in order to pursue our rights under El Salvadoran law and international treaties, specifically CAFTA. It saddens me to be forced to reduce our workforce and investment level in Cabanas, where local employment opportunities are almost non-existent. We remain focused on moving El Dorado into production, with the co-operation of the El Salvadoran government, so we can build a new economy in Cabanas and elsewhere in El Salvador. These are hard-working people that deserve this opportunity to work and feed their families."

Work Force Reductions

Pacific Rim has laid off 42 El Salvador-based employees effective June 30, 2008. The Company's remaining 225 employees, including all senior management remain with the Company. Additional layoffs are likely if the permit issue is not resolved imminently.

El Dorado Permitting

Regulatory approval of the El Dorado EIS is the critical requirement for the assessment and approval of the Company's El Dorado mining permit (also known as the exploitation concession) application. Nearly two-years have passed since the El Dorado EIS was submitted in its final form. MARN has failed to take action on approval of the EIS, thus preventing the Company from obtaining the El Dorado exploitation concession in a timely manner.

In good faith, Pacific Rim and its subsidiaries have met their responsibilities under El Salvadoran law. The Company is continuing to seek an amicable resolution to the El Dorado permitting issue with the Government of El Salvador and will continue to pursue its rights under El Salvadoran law and CAFTA. The Company has retained the Washington, DC legal firm of Crowell & Moring to represent it should it choose to proceed in the future with CAFTA arbitration proceedings.

Exploration

The Company's El Dorado drilling program, focused on the Cerro Alto and La Luz veins in recent months, has intersected many blind gold-bearing veins. However, no new deposits at El Dorado have been delineated since completion of the Balsamo deposit drilling. A complete list of drill results from the El Dorado property is available on the Company's website (at http://www.pacrim-mining.com/i/pdf/ED_complete_drill_results.pdf ), with the most recent results clearly indicated. Going forward and upon resumption of full-scale exploration at El Dorado, the Company intends to provide project updates on a quarterly basis, which will include any materially significant results and discoveries with complete drill results provided concurrently on the Company's website.