Toronto, Canada, July 12, 2005...BREAKWATER RESOURCES LTD. (TSX - BWR) is pleased to announce that Breakwater and its wholly-owned subsidiary, CanZinco Ltd., and Forest Gate Resources Inc, and its wholly-owned subsidiary, Blue Note Metals Inc., have signed a revised letter of intent ("LOI") regarding the acquisition of the Caribou and Restigouche mines. The LOI sets out the provisions that will form the basis of a definitive agreement to be entered into between the two companies in the near future; the LOI replaces all other previously announced agreements and understandings between the parties. Under the terms of the LOI, after raising sufficient funds, Blue Note Metals Inc. will acquire the Caribou and Restigouche mines by replacing the reclamation deposits of approximately $7 million with the New Brunswick government for environmental rehabilitation, and issuing to CanZinco a C$15 million convertible debenture with a maturity of five years. Additionally, CanZinco has the right to convert the debenture in return for a direct 20% ownership of the mines; this must be exercised within one year from the commencement of commercial production. Blue Note Metals Inc. has also agreed to spend $1.5 million on exploration on the properties before the 12-month anniversary of the commencement of commercial production.

CanZinco will receive a royalty on zinc metal production in the event the price of zinc reaches US$0.65 per pound or more as determined by the London Metals Exchange. In addition, CanZinco is granted a conditional first right of refusal on Blue Note's marketing rights of its metals concentrates produced from the properties.

The Caribou mine consists of an underground mine and mill located in Restigouche County in northeastern New Brunswick, 50 kilometres west of Bathurst, New Brunswick and an open pit mine (formerly known as the Restigouche property) located approximately 80 kilometres west of Bathurst and 30 kilometres from the Caribou mill. The Caribou mine property covers an area of 3,106 hectares and is held under a mining lease.

Breakwater is a mineral resource company engaged in the acquisition, exploration, development and mining of base metal and precious metal deposits in the Americas and North Africa. Breakwater has four producing zinc mines: the Myra Falls mine in British Columbia, Canada; the Bougrine mine in Tunisia; the El Mochito mine in Honduras; and the El Toqui mine in Chile. The Company also owns the Langlois mine in Canada, and is currently reviewing options for the reopening of the mine.

Certain statements included in this news release are forward-looking statements, which are made pursuant to the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. They include estimates and statements that describe the Company's future plans, objectives and goals, including words to the effect that the Company or management expects a stated condition or result to occur. When used herein, words such as "to be entered into", "will acquire", "commencement", "will receive", "produced", "issuing", "acquisition" and other similar expressions are intended to identify forward-looking statements. Such forward-looking statements involve inherent risks and uncertainties and subject to other factors, many of which are beyond our control, that may cause the actual results or performance to differ materially from those expressed or implied by such forward-looking statements. Such factors include, among others, asset impairment, metal price volatility, fluctuations in foreign exchange rates, economic and political events affecting metal supply and demand, fluctuations in ore grade or ore tonnes milled, geological, operating and environmental risks, problems during the development, construction and start-up phases of an underground mine, inadequacy of environmental insurance. For a more comprehensive review of risk factors, please refer to the Company's most recent annual report under "Management's Discussion and Analysis of Financial Results" and Form 20-F under "Risk Factors" on file with the U.S. Securities and Exchange Commission and Canadian provincial securities regulatory authorities filed on SEDAR at www.sedar.com. The Company disclaims any obligation to update or revise any forward-looking statements whether as a result of new information, events or otherwise. Readers are cautioned not to put undue reliance on these forward-looking statements.

For further information please contact:

Garth A.C. MacRae
Chairman
(416) 363-4798 Ext. 222

William M. Heath
Vice President, Administration
(416) 363-4798 Ext. 267