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Message: Erdenetsogt Property Update
| May 26, 2009 | |
| Gulfside Minerals Ltd.: Erdenetsogt Property Update | |
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VANCOUVER, BRITISH COLUMBIA--(Marketwire - May 26, 2009) - GULFSIDE MINERALS LTD. (TSX VENTURE:GMG) ("Gulfside" or the "Company") is issuing the following news release to update our disclosure relating to the Erdenetsogt Coal Property in Mongolia. Gulfside was required to file a National Instrument (NI) 43-101 Technical Report not later than 45 days from the date of their news release in support of the disclosure of a mineral estimate at the property, disclosed in a news release of October 31, 2007. This mineral estimate was not NI 43-101 compliant at the time of disclosure. - Gulfside did not file a NI 43-101 Compliant Technical Report to support disclosure of the mineral estimate on a mineral property within the required 45 days. - In response, the BCSC issued a Cease Trade Order to remain in effect until the Company files a compliant report. - Gulfside has now received and is filing a NI 43-101 Compliant Technical Report for the Erdenetsogt Property, prepared by Norwest Corporation ("Norwest") of Salt Lake City, Utah. Furthermore, in the news release of October 31, 2007, Gulfside did not discuss the quality of the resource estimate or specify the assurance category of the estimate as required by NI 43-101 standards for disclosure for mineral projects. Robert M. Card, President of Gulfside is pleased to announce that the Company has received the NI 43-101 Technical Report for the Erdenetsogt Project from Norwest. The Norwest Report has addressed these disclosure issues, as follows. CURRENT RESOURCES: The lignite coal resource in the "measured" category totals 434 million tonnes while 751 million tonnes are classified as "indicated". Combined, a total of 1,185 million tonnes are classified in the "measured" plus "indicated" categories. These resources are of the "Surface" deposit type and are estimated to have a cumulative in-place waste volume (m3) to coal tonnage ratio of 0.6:1. The coal occurrence can be divided into eight distinct seams, or benches of a seam, separated by rock interburden. The combined coal thickness of the eight benches averages 79 meters throughout the resource area. Structural modification of the deposit has been minimal. The resource estimates are based on exploration data and information collected by a Mongolian company that formerly owned the coal property. Drilling in 2006 and 2007 consisted of 36 boreholes totaling 5,689 meters, with Norwest personnel on-site for the completion of eight of the holes drilled in 2007. Based on the geologic data available and geologic interpretation at the time the resource estimate was prepared (March 31, 2008), Norwest states that the estimate is considered reasonable. The firm cautions that there is no guarantee all or part of the estimated resources will be recoverable. COAL QUALITY: Coal resources at Erdenetsogt are classified as Lignite A, based on ASTM standards. Typical in-place coal quality (air-dried basis) of the lignite resource is presented in the following table. Average Minimum Maximum
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Inherent Moisture % 23.05 15.63 29.29
Ash % 17.35 12.74 22.24
Sulfur % 1.70 1.35 2.31
Calorific Value (kCal/kg) 4,003 3,453 4,560
Erdenetsogt Property Location: The Erdenetsogt Property is located in the Dornogobi region of southeastern Mongolia, about 430 kilometers from Ulaanbaatar, and 200 kilometers from the border with China. The coal license covers 13,574 hectares situated within a Cretaceous-age basin where coal occurrences were first discovered in the 1960's by Russian-Mongolian mapping teams. The property is six kilometers from a 35KW electric power line and 82 kilometers from the Trans-Mongolian Railroad. Ownership: The coal license is owned by ECM Co. LLC ("ECM"), a Mongolian company. ECM is 100% owned by a British Virgin Island holding company, Mangreat Group Ltd. ("Mangreat"), which in turn is a wholly owned subsidiary of Guardstand Nominees (HK) Limited ("Guardstand"), headquartered in Hong Kong. - Gulfside stated in a news release dated March 14, 2008, that its intent was to acquire a 100% interest in the private company holding the Erdenetsogt Coal Property over a period of 15 months. - Gulfside clarified in a news release dated April 30, 2008 that it has entered into a share purchase agreement ("SPA") dated March 7, 2008, with Guardstand to acquire a 49% interest in Mangreat, which holds 100% of the coal license through ECM, its wholly owned Mongolian subsidiary. The staged transaction, valued at about US$16.5 million, will give Gulfside full operating rights and an indirect 49% interest in the Mongolian subsidiary and the coal license. The Company also had a letter of understanding allowing the Company to acquire the remaining 51% in the interest in the coal license, under certain conditions, up until January 31, 2009. - Gulfside announced in a news release dated September 25, 2008 that Guardstand is currently in breach of its obligations under the SPA and the Company has been unable to complete the agreement. The SPA provides that any dispute arising out of or relating to the SPA shall be settled by arbitration. The Company has retained a law firm in London England as their counsel and they have initiated arbitration proceedings. - Gulfside has also initiated civil proceeding in Mongolia to assert its rights to the property. This civil action is against Monrospromugoli LLC ("MRPU") regarding a June 7, 2007 Cooperative Agreement executed by Gulfside and MRPU with regards to the Erdenetsogt coal license. According to the terms of the Cooperative Agreement, MRPU was required to form a new joint venture company and transfer the title to the Erdenetsogt coal license to that joint venture company upon payment of certain sums of money by Gulfside to MRPU. On February 18, 2009 the Bayangol District Court in Mongolia found MRPU violated the terms of the Cooperative Agreement by failing to properly transfer five percent of the shares of the joint venture company, ECM. The court ordered MRPU to transfer five percent of the shares of ECM to Gulfside. Subsequently MRPU has appealed this order and Gulfside is preparing for this appeal. Qualified Person: Lawrence D. Henchel, P.G., Manager of Geologic Services, Norwest Corporation, an independent Qualified Person as defined by NI 43-101, is responsible for the mineral resource estimates and other information summarized from the Technical Report. On behalf of the Board of Directors Gulfside Minerals Ltd. Robert L. Card, President |
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