Yellowhead Mining Reports Positive Results of Preliminary Economic Assessment

Yellowhead Mining Inc. (TSX VENTURE:YMI) (YMI or "the Company") reports the results of the independent Harper Creek Preliminary Economic Assessment Study performed by Wardrop, a Tetra Tech Company, ("Wardrop") in conjunction with:

Knight Piesold Limited ("KP"): mine waste and water management
Dillon Consulting Limited ("Dillon") environmental
G&T Metallurgical Services Limited (G&T"): metallurgical test work

YMI's Board of Directors has accepted and approved the release of the results of the study. The NI 43-101 Report documenting these results will be published on or before 31 March, 2011.

The following is a highlight summary of the project attributes:

Highlights

22 year project life at a milling rate of 70,000 tpd. Capital costs are estimated at C$759 million in Q4 2010 dollars, including contingency. Operating costs are estimated at C$1.40/lb. The breakeven copper price including initial and sustaining capital repayment (IRR=0%) is determined to be US$1.94/lb using US$1,058 for gold and US$16.57 for silver.
The project will produce a total of 2.857 billion pounds of copper, 265 thousand ounces of gold and 4.87 million ounces of silver contained in concentrate.
Open pit mining would continue at a rate of 25.55 million tonnes ("Mt") of mineral inventory(1) per year for approximately 17 years, at an average stripping ratio of 1.44:1 based on ore milled after which low grade mineralization recovered from stockpile would be processed for the remaining 5 years. Life-of-mine ("LOM") stripping ratio after reprocessing of stockpiled material is 0.88:1. A total of 15Mt of waste rock will be stripped during pre-production. Most of this waste rock will be used for the tailings starter dam and for other construction activities.
An updated resource at a 0.20% Cu cut-off grade with 89.99Mt @ 0.30% Cu, 0.033g/t Au & 1.18g/t Ag in the Measured category; 442.07Mt @ 0.31% Cu, 0.032g/t Au & 1.06g/t Ag in the Indicated category; for a total of 532.06Mt @ 0.31% Cu, 0.032g/t Au & 1.08g/t Ag Measured and Indicated Resource containing 3.6Blb of insitu copper, 544koz Au and 18.5Moz Ag. An additional Inferred Resource of 117.24Mt @ 0.29% Cu, 0.032g/t Au & 1.32g/t Ag or 0.7Blb of insitu copper(2) (refer to Table 3 for Resources at varying cut-off grades).
Total mining inventory was determined by pit optimization runs using a Lerchs Grossmann algorithm to determine "optimum" net present value of mineral processed. It is estimated at 552.8Mt @ 0.272% Cu, 0.029g/t Au and 0.997g/t Ag at a 0.13% Cu cutoff.
LOM operating costs are estimated as follows: mining C$1.21/t total material moved or C$2.52/t milled (including $0.15 stockpile re-handling average cost for the LOM); milling C$4.01/t milled; G&A and surface services C$0.69/t milled for a total of C$7.22/t milled or C$1.40/lb Cu.
Over the project life it is estimated that an additional C$481million in sustaining capital is required.

Economic Analysis

The base case economic analysis projects that the Harper Creek project would have a net present value of US$598million (@ 8% discount rate) and an internal rate of return of 19.8% based on 100% equity financing. The pre-tax economic results for the base case and two additional case scenarios are presented in Table 1.

Table 1: Summary of Harper Creek Pre-Tax Economic Results
	Base Case Scenario	Alternate Case Scenario	Lower Metal Price Scenario
Cu US$/lb	US$2.66	US$3.01	US$2.25
Au US$/oz	US$1,058	US$1,221	US$980
Ag US$/oz	US$16.57	US$19.73	US$15.50
Exchange Rate (US$:C$)	0.92	0.92	0.92
Internal Rate of Return	19.8%	27.5%	10.0%
Net Cash Flow (undiscounted)	US$1,861 million	US$2,820 million	US$777 million
Net Present Value (8% discount rate)	US$598M	US$1,051M	US$87M
Payback Years	4.0	2.7	8.5

The Company estimates that using the base case prices and based on 35% equity and 65% project debt, the NPV₈ is $552M with an IRR of 27.9%

The base case and alternate case metal prices are based on Wardrop's adopted consensus forecast metal prices from the Energy Metals Consensus Forecast (EMCF). EMCF is published by Consensus Economics Inc. (Consensus Economics) of London. Consensus Economics provide quarterly forecasts (the EMCF) for a variety of metals prices based on an average price from long term projections of 20 analysts representing international banks.

The following table details estimates of production statistics by period:

Table 2: Harper Creek Production
	Average Annual Production		Total Production
Metal	Years 1 to 8	LOM	Years 1 to 8	LOM
Copper (000 lb)	149,049	132,040	1,192,388	2,856,901
Gold (000 oz)	16	12	127	265
Silver (000 oz)	274	225	2,194	4,873

Project Development

The PA Study concept is based on the development of a large-scale open pit mining and milling operation. The mine will employ 311mm (12 ¼") electric rotary blasthole drills, 42m³ (55yd³) electric hydraulic shovels, ~300t capacity haul trucks plus support equipment. Blasting will employ bulk heavy ammonium nitrate slurry delivered to site by a vendor. The mill feed will be crushed by a 1.5m (60") x 2.3m (89") gyratory crusher to a nominal 80% passing 150mm (6"). Crushed material will feed a stockpile of 70,000t live capacity, before being reclaimed to the process plant.

Plant design is based on a single line flow sheet employing SAG and ball milling, flotation including regrinding, thickening and filtering to produce a concentrate for export averaging 27% Cu and 1.7g/t Au and 32g/t Ag. The primary grinding circuit includes an 11.6m (38') x 6.7m (22'), 20,000kW (26,800HP) SAG mill feeding two 7.9m (26') x 11.6m (38'), 15,500kW (20,800HP) ball mills providing a primary grind size of 80% passing 100µm. Coarse rejects from the SAG mill are crushed in two 600kW (800HP) pebble crushers. Primary grinding circuit discharge feeds two banks of eight 200m³ rougher flotation cells. The rougher concentrate will be reground by four 1,120kW (1,500HP) tower mills to 80% passing 20 µm to 25 µm prior to three stages of cleaner flotation by conventional flotation cells. The primary and regrind product sizes were determined by G&T Metallurgical Services. A comprehensive metallurgical testwork program is scheduled to be completed as part of the Feasibility Study that is scheduled to commence in early April. This testwork will include variability testing to determined metallurgical performances of the mineralization from different areas of the deposit.

Concentrate will be loaded on B-Trains of nominal 40t capacity for hauling to the a rail loadout facility in the town of Vavenby, a distance of 25km, for shipment from the Port of Vancouver, a distance of 450km, to smelters/refineries in the Pacific Rim. Testwork indicates that the concentrate is clean with no smelter penalties expected.

Water from the tailings slurry will be reclaimed from the Waste Management Facility (WMF) for use in the milling process. The WMF includes the ability to store all tailings and submerge any potentially acid generating waste rock. Low grade material will be stockpiled to the south of the pit for easy reclaim for processing in the latter years of the mine life. The tailings management system is located in a natural valley to the south of the plant in an area devoid of any fish habitat.

Mine infrastructure includes upgrading of an existing logging road over a distance of approximately 12km. While a 450 man camp will be established during construction, all mine and plant operating and maintenance labour are expected to be drawn from the local area.

Power will be supplied by an upgraded BC Hydro 138 kV transmission line that parallels the Yellowhead Highway, approximately 8km north of the plant. BC Hydro, at the Company's expense, is engineering the upgrade which will bring a new 230 kV line from 100 Mile House to connect to the existing transmission substation at Clearwater. The new 230 kV transmission line will also provide improved reliability of power to existing customers within the North Thompson River Valley. The Company will be required to execute a take or pay contract with BC Hydro and put up a letter of credit ("LOC") for approximately half of the capital cost, estimated at $130 million. The LOC will be reduced annually by the amount of the Company's annual power purchases.

The project is expected to employ 312 hourly and staff personnel. Based on industry experience approximately 1,000 jobs will be created in the surrounding communities to provide support to the project.

Following exhaustion of reserves, the project will close and be reclaimed according to the requirements of current legislation. All equipment and facilities will be removed and the area graded and seeded. Any contact water from the waste rock dumps will be directed into the open pit or waste management facility. The pit is estimated to fill more than 100 years post-closure. It is assumed that the pit water will require treatment prior to release to the receiving environment. This annual surplus will be treated in a water treatment plant that will recover metals, including copper. The project capital cost includes funding for a surety bond to meet future reclamation obligations.

Dillon has been collecting a wide range of project-specific environmental baseline data since 2007. A Project Description has been delivered to the BC Environmental Assessment Office ("BCEAO") and is available on their website at:

[ http://a100.gov.bc.ca/appsdata/epic/documents/p333/1295903690301_5aa204813a3a28bbaad434d7890ebbdd62ee07f028154720b0c5f52e258d5011.pdf ]

On 8 February, 2011, the Company submitted its draft Application Information Requirements (dAIR) to the BCEAO for review by both provincial and federal regulators. A working group meeting to discuss the dAIR document and the project in general is scheduled for early April, 2011.

National Instrument 43-101 Compliance

The following Qualified Persons (as defined by National Instrument 43-101) are independent of Yellowhead Mining and responsible for the Harper Creek Project Preliminary Assessment:

Qualified Person	Scope of Responsibility
Klaus Triebel, CPG Tetra Tech.	Mineral resource modelling and analysis
Nory Narciso, P.Eng. Wardrop	Mine planning, production scheduling, mine capital and operating costs.
John Huang, P.Eng. Wardrop	Metallurgical testing review, mineral processing, process operating costs and infrastructure with exception to power and roads
Mike Boyle, P.Eng. Wardrop	Roads design, access and site roads/earthworks
Malcolm Cameron, P.Eng. Wardrop	Power supply design and associated costs
Hassan Ghaffari, P.Eng. Wardrop	Capital cost estimate
Shervin Teymouri, P.Eng. Wardrop	Financial Analysis
Graham Greenaway, P.Eng. Knight Piesold	Tailing impoundment, water and waste management plan, open pit slopes design and conceptual closure planning
Richard Pope, M.Sc., R.P. Bio Dillon	Environmental concerns and permitting, capital and operating costs estimates as they relate to environmental component of the study

Future Work Program

Management's plans for 2011 are

Complete a Feasibility Study, scheduled to commence mid-April
Drilling to support the Feasibility Study including geotechnical, hydrological, foundation testing, metallurgical and condemnation.
Continue with the Environmental Impact Study with concurrent permitting
Step out drilling to the east and north to increase the resource
Investigate and implement opportunities for improvement in project economics.

Table 3: Resources at Varying Cutoff Grades
Cut-off Grade (% Cu)	Resource Tonnage (kt)	Cu Grade (%Cu)	*Au Grade (g/t)**	*Ag Grade (g/t)**
Measured
0.10	146,402.4	0.24	0.029	1.04
0.20	89,992.9	0.30	0.033	1.18
0.30	38,632.4	0.38	0.039	1.37
0.40	12,391.7	0.47	0.046	1.55
0.50	3,701.7	0.56	0.055	1.66
Indicated
0.10	847,302.0	0.23	0.026	0.91
0.20	442,071.1	0.31	0.032	1.06
0.30	190,133.7	0.39	0.040	1.22
0.40	72,464.5	0.49	0.051	1.36
0.50	25,128.2	0.58	0.065	1.54
Measured and Indicated
0.10	993,704.4	0.23	0.026	0.93
0.20	532,064.0	0.31	0.032	1.08
0.30	228,766.1	0.39	0.040	1.24
0.40	84,856.2	0.48	0.050	1.39
0.50	28,829.9	0.58	0.063	1.55
Inferred*
0.10	231,239.0	0.22	0.027	1.09
0.20	117,236.9	0.29	0.032	1.32
0.30	47,036.7	0.38	0.037	1.49
0.40	14,116.7	0.46	0.043	1.65
0.50	3,316.1	0.56	0.051	1.81

*Inferred gold and silver grades cannot be correlated to the copper resource tonnage and shall not be used to calculate precious metal mineral content

About Yellowhead Mining Inc.

Yellowhead has a 100% interest in the Harper Creek Project subject to the payment of a 3% NSR royalty on 775 ha capped at $2.5 million adjusted for inflation and a 2.5% NSR royalty on 618 ha, which includes an estimated 3.3 million tonnes of resource expected to be mined starting in year nine of the mine plan.

The Harper Creek Project is a large copper-gold-silver volcanogenic sulphide deposit located in south-central British Colombia, approximately 150 kilometers by highway from Kamloops. Mineralization occurs as a series of tabular bodies hosted within the Eagle Bay Assemblage metavolcanic and metasedimentary rocks.

Forward-Looking Statements

Except for statements of historical fact, this news release contains certain "forward-looking information" within the meaning of applicable securities laws. Forward-looking information is frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate" and other similar words, or statements that certain events or conditions "may" or "will" occur. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those anticipated in the forward-looking statements, including, among others, the accuracy of mineral grades and related assumptions, inherent operating risks, planned expenditures, proposed exploration and development at the Harper Creek Project, operating and economic aspects of the Harper Creek Project, as well as those risk factors identified in the Filing Statement filed under the Company's SEDAR profile. Yellowhead undertakes no obligation to update forward-looking information if circumstances or management's estimates or opinions should change except as required by law. The reader is cautioned not to place undue reliance on forward-looking statements. More detailed information about potential factors that could affect financial results is included in the documents filed from time to time with the Canadian securities regulatory authorities by Yellowhead.

(1) The Preliminary Assessment is preliminary in nature and includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied that would enable them to be categorized as mineral reserves. There is no certainty that the Preliminary Assessment will be realized.

(2) The Preliminary Assessment is preliminary in nature and includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied that would enable them to be categorized as mineral reserves. There is no certainty that the Preliminary Assessment will be realized.

Neither the TSX Venture Exchange Inc. nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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Yellowhead Mining Reports Positive Results of Preliminary Economic Assessment