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Great Western Minerals Group Ltd. is a Saskatchewan-based junior exploration company. GWMG is engaged in the acquisition, exploration, and development of rare earth mineral properties in North America.
Message: Makes Second Option Payment on Steenkampskraal Project
| September 25, 2009 |
| Great Western Minerals Group Makes Second Option Payment on Steenkampskraal Project |
| SASKATOON, SASKATCHEWAN--(Marketwire - Sept. 25, 2009) - Great Western Minerals Group Ltd. (TSX VENTURE:GWG) (PINK SHEETS:GWMGF) ("GWMG" or the "Company") is pleased to announce that, under the terms of the option agreement between the Company and Rare Earth Extraction Co. Ltd. ("Rareco") to refurbish, recommission and operate the former-producing Steenkampskraal Mine, the Company has now paid the second option payment of R500,000 (US$62,500) to Rareco. GWMG and Rareco will now enter a period of further due diligence and the negotiation of a supply agreement under which 100% of the rare earth ore mined and processed will be made available to GWMG. In addition to acquiring access to 100% of the rare earths produced, GWMG could also negotiate an equity interest in the project. The second option payment was made subsequent to GWMG receiving evidence that the South African Department of Mineral and Energy Affairs ("DME") had accepted the application by Rareco to convert the old order mining right to a new mining licence. While the DME has accepted Rareco's application, it still has to officially grant the new mining license. As part of the agreement, Rareco has now provided GWMG with updated capital and operating costs based on the initial feasibility study completed on the project in 1996. The updated capital costs were provided by an independent engineering group and the operating costs were provided by parties related to Rareco. The report is currently not NI 43-101 compliant and the results have not yet been verified by the Company; therefore the results will not be provided at this time. GWMG, in consultation with its financial advisors, will review the extent of work required and anticipated timeframe to complete 43-101 report for the project. The completion of any proposed transaction with Rareco is subject to numerous factors including completion of all necessary legal, financial and technical due diligence and the due diligence results being satisfactory to GWMG, GWMG's review and satisfaction of the budget and pro forma financial projections relating to such transaction, the negotiation and execution of a definitive agreement and satisfaction of any terms and conditions to be set forth therein and receipt of all necessary consents and approvals, including both Canadian and South African regulatory approvals. There can be no assurance that any proposed transaction will be completed as proposed or at all. The existing Steenkampskraal Mining License covers 474 hectares. The main rare earth-bearing mineral is monazite and is hosted by an igneous intrusive dyke system. The mineral deposit is tabular in shape with a known strike length of 400m and has been traced down dip for 250m. Thickness ranges from 0.3m to 4.0m and the average in-situ grade is 16.74% total rare earth oxide ("TREO"). The deposit also contains significant amounts of copper, gold and phosphate which could be recovered as by-products. Very little exploration work has been done on the property and the deposit remains open along strike and at depth. It is important to note that the independently developed data does not represent an NI-43-101 compliant reserve or resource. As such, a Qualified Person has not done sufficient work to establish any mineral resource, and this data should not be relied upon to assume any NI-43-101 compliant reserve or resource. GWMG is treating this data as a guideline only for developing the work programs necessary to bring results into compliance with NI 43-101. "This is an extremely important project to GWMG", states Jim Engdahl, President and CEO. "If successfully recommissioned, this mine will allow us to fully realize our mine-to-market business model, making us self-sufficient in our ability to ensure a supply of rare earths for our plants in the UK and the US. Achieving early production at Steenkampskraal would allow us to develop our other neodymium and dysprosium enriched projects like Hoidas Lake, Douglas River and Benjamin River in an optimal manner without worrying that our value added facilities will be starved for raw materials." Gary Billingsley (CA, P.Eng, P.Geo), Executive Chairman of GWMG, is the Qualified Person responsible for reviewing the contents of this news release. |
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