Western Receives Gurvanbulag Definitive Feasibility Study

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Western Receives Gurvanbulag Definitive Feasibility Study

posted on Jan 09, 2009 12:31PM

January 9, 2009

Western Receives Gurvanbulag Definitive Feasibility Study

Project economics profitable in spite of cost increases

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Jan. 9, 2008) - Western Prospector Group Ltd. (TSX VENTURE:WNP) ("Western") today announced positive economics from the Definitive Feasibility Study ("DFS") it has received from Aker Metals, a division of Aker Solutions Canada Inc. ("Aker Solutions") for its 100% owned Gurvanbulag Central uranium deposit in Mongolia. The DFS follows a Preliminary Economic Assessment of Gurvanbulag, completed in 2007 by Micon International Limited, which was detailed in Western's October 16, 2007 news release.

The DFS is based on reserves, at a cut-off grade of 0.08% U3O8, as 
summarized below:

---------------------------------------------------------------
                 Gurvanbulag Mineral Reserves
---------------------------------------------------------------

---------------------------------------------------------------
                           Tonnes        Grade             U3O8
Category            -------------------------------------------
                                t       % U3O8      million lbs
---------------------------------------------------------------
Proven Reserves           914,500        0.198              4.0
---------------------------------------------------------------
Probable Reserves       4,128,500        0.153             13.9
---------------------------------------------------------------
Total Reserves          5,043,000        0.161             17.9
---------------------------------------------------------------

A radiometric sorting plant is projected to remove 620,000 tonnes of low grade rock and feed a nominal 500,000 tonnes per year to the process plant with a head grade of 0.179% U3O8. With an average process recovery of 94.2%, the study indicates that the deposit can produce a yearly average of 1.85 million pounds of U3O8, as calcined yellowcake, for a nine year production life. The study further indicates economic viability, with an estimated pretax internal rate of return ("IRR") of 9.2% based on a constant selling price of US$65.00 per pound. The IRR translates to 1.3% on an after-tax basis, incorporating all taxes currently in effect in Mongolia.

The DFS was prepared by Aker Solutions in conjunction with P&E Mining Consultants Inc. (resources, reserves and mining), Golder Associates Ltd. (rock mechanics and tailings disposal), and Melis Engineering Ltd. (metallurgy). The pre-production capital cost estimate, based on currency exchange rates prevailing during the second quarter of 2008, is US$280.2 million with a further US$137.5 million for sustaining capital costs during mine life. The site operating cost per tonne mined is US$94.62, which results in an operating cost per pound of yellowcake of US$29.00.

In comparison with the Preliminary Assessment prepared for Western in 2007 by Micon, capital costs have increased by US$148.7 million (55%), due to inflation during the period of strong world economic growth. Operating costs only increased by US$10.64 per tonne, maintaining a competitive cost per pound of yellowcake production.

Aker Solutions estimates production could start by January 2012, assuming all Mongolian Government permits are in hand by the end of May 2009. During construction, a comprehensive training program would be instituted to ensure that, by start up of production, the project is employing the maximum number of Mongolian nationals. This training program would complement and extend the scholarship and professional training program already under way. The means of project financing is yet to be determined.

The DFS will be made available at www.sedar.com and on the Company's website at www.westernprospector.com.

Qualified Persons: John Rogers, P.Eng, of Aker Solutions, Eugene Puritch P.Eng. and Malcolm Buck, P.Eng. of P&E Mining Consultants Inc., Bruce Fielder, P.Eng., Principal Process Engineer of Melis Engineering , Leon Botham, P.Eng. of Golder Associates, and Gerald Harper, Ph.D, P.Geo., Senior Vice-President of Western, are the qualified persons (as defined under NI 43-101) on the project and have reviewed the technical information presented in this release.

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