Asia Pacific Resources Announcement.

Business Editors

TORONTO--(BUSINESS WIRE)--June 30, 2003

Asia Pacific Resources Ltd. today announced the results of the updates to its technical and economic review of the proposed Udon potash mining project. Based on an initial production rate of 1 million tones of potash per annum (tpa), increasing to 2 million tpa through a plant expansion as market share grows, the studies project internal rates of return of between 16% and 20% after-tax, for a range of potash prices, international shipping costs and levels of bank debt.

"The project economics are attractive, particularly with the anticipated long mine life, strong cashflow generation, high grade of the deposit and straight forward mining conditions," said John Bovard, President and CEO of Asia Pacific Resources. "In addition, the mine will provide Thailand with over 1000 jobs during the 3 year construction phase, and 900 direct jobs over a 22 year mine life. It is important to recognize that the total contribution of the Udon potash mine to the Thai economy is estimated to exceed 260 billion baht (US$6.5 billion) considering royalty payments, export earnings, materials purchases and employment benefits."

Total capital cost for the initial stage is estimated at $US 308 million with the second stage estimated at $US 221 million ($2003). It is anticipated that the expansion to 2 million tpa can be financed from cash flow, such that no additional equity financing will be necessary.

The project returns are somewhat lower than previously estimated, mainly as a result of lower assumed global potash prices and higher assumed energy prices. Total operating costs have been estimated at $US53.85/tone of potash at the export port, slightly higher than in previous estimates. Current values have been used for potash prices, shipping costs and energy costs rather than forecasting future trends.

Asia Pacific Resources will incur costs in addition to the direct project costs which will reduce the rate of return to the Company by approximately 1.2% below that of the project. For example, APR must fund the Thai Government's 10% partially free carried interest in Asia Pacific Potash Corporation which holds the project interest. In addition, APR must pay a private royalty to three parties associated with former Directors of Asia Pacific.

As discussed in the Corporation's Annual Report, following the appointment of the new Board in 2002, the Company reviewed development alternatives particularly taking into account the requirement for orderly entry to the market and to allow time for training of people from the North East of Thailand so that they can participate immediately in the job creation benefits. The Company has also undertaken further studies of potential markets in South East Asia where it has a natural cost advantage in respect of shipping. The results of these confidential studies have been incorporated into the overall economic studies of the Company. The large and growing demand in China, an estimated 6 million tones in 2003, and in the rest of Asia, an estimated 7 million tones, continues to be an immediate focus for the activities of management.

Based on the technical, economic and market studies, the Company has concluded that there is an optimum initial rate of production balancing the various parameters including orderly market entry, technical start-up, and commissioning issues. After taking into account the relatively fixed costs of underground access and the transport infrastructure the optimum was found to be an initial production rate of 1 million tones of potash per annum (tpa), increasing to 2 million tpa with a plant expansion as market share grows.

"The plan for a staged project obviously requires much less initial capital than starting immediately at 2 million tpa," said John Bovard. "This improves the probability that project funding can be obtained on terms favourable to APR shareholders. The staged project is also easier to execute, particularly in the development of the underground mine, and significantly reduces the need for, and cost of, rail and port infrastructure. Commercial risks are also reduced. These changes improve the probability that the project will be implemented as planned.

"In addition, the design incorporates an improved underground tailings disposal system, and ensures that virtually no tailings will be stored on surface for extended periods, and that all tailings are safely stored underground during the mine's operating life. This design will reduce the potential for surface subsidence, as mined out areas are filled with tailings. The change also minimizes possible ground water impacts, and responds to the concerns raised by local residents during our consultations," concluded Mr. Bovard.

On the basis of the studies carried out by international consultants SRK for resources and mining, Ausenco/AMEC for processing, Golders for geotechnical, and JT Boyd for mining, Asia Pacific management is of the view that all field, laboratory and basic design work is now essentially complete and that technical work required for bank funding of the project, after the granting of the mining leases, will only comprise some final updating of cost input data before the project can proceed to implementation.

The Company expects that the implementation of the project will involve a commercial relationship with one or more other companies for the purposes of market development and project financing. The level of third party equity participation to finance the project relative to the level of debt financing potentially will have a diluting effect on existing shareholders directly or on the Company's holding in the project.

"Following the recent submission of the Mining Lease Application, Asia Pacific management has met with the Committee appointed to oversee the process. We have listened carefully, and responded to local residents' concerns regarding possible subsidence and ground water impacts. In addition to official consultations and extensive meetings with local residents, we continue to look to engage in dialogue with various NGO's who have expressed opposition to the project in order to understand and respond to their positions.

"Asia Pacific looks forward to the opportunity presented by the Mining Lease Application process to discuss our plans for building and operating an environmentally secure mine that will provide significant benefits to shareholders, customers, and the people of Thailand," concluded John Bovard.

Asia Pacific Resources Ltd. holds a 90% beneficial interest in Asia Pacific Potash Corporation, the company holding the Concession covering the Udon South potash deposit. The remaining 10% interest in APPC is held by the government of Thailand. Asia Pacific Resources shares are traded on the TSX as well as the Frankfurt and Stuttgart Stock Exchanges under the symbol APQ and on the OTCBB under the Symbol APQCF.

The information provided in this news release may contain forward looking statements within the meaning of the Safe Harbor provisions of the US Private Securities Litigation Reform Act of 1995. These statements are based on Asia Pacific Resources current expectations and beliefs and are subject to a number of risks and uncertainties that can cause actual results to differ materially from those described in forward looking statements.