Garrison International Ltd.

Garrison International Ltd.

January 18, 2008 16:30 ET

Garrison Clarifies the Status of Its Dispute Regarding Licences Located in the Tsagaan Tsahuir Mining Project

TORONTO, ONTARIO--(Marketwire - Jan. 18, 2008) - Garrison International Ltd. ("Garrison" or the "Company") (TSX VENTURE:GAU) disclosed in its February 22, 2007 press release that it had entered into a February 2007 agreement with Bayangazar Co. Ltd. ("BCL") whereby the Company could acquire an interest in mining licenses 2320X, 6994X, 10008A and 11942A ("BCL Licenses") which surround the Company's existing license No. 10866X. The BCL Licenses are located in the Tsaagan Tsahuir mining project (the "TSR Project"), located in the Bayan-Ovoo Soum (district) of the Bayankhonger Province, Mongolia.

In a July 5, 2007 press release, the Company referred to the fact that a dispute had occurred with its Mongolian joint venture partner and that re-negotiation of the agreement was proceeding. On October 26, 2007, the Company released on SEDAR its audited financial statements for the year ending June 30, 2007. These financial statements disclosed that the Company had written off all of the deferred exploration expenditures incurred to earn a 50% interest in the BCL Licenses. These deferred exploration expenditures totalled $410,572 and represented 100% of the Company's deferred exploration expenditures incurred as of the year ended June 30, 2007.

Exchange Requirement to Issue Clarifying Public Disclosure

This press release provides public disclosure regarding the events that preceded a dispute between the Company and BCL and provides an explanation for the decision of the Board of Directors to write off all of the deferred exploration expenditures associated with the BCL Licenses. The TSX Venture Exchange (the "Exchange") has required that the Company supplement the disclosure contained in its July 5, 2007 press release, the notes to the June 30, 2007 audited financial statements and the management's discussion and analysis thereon regarding this dispute by issuing this press release and specifically addressing the topics herein discussed.

To understand the nature of the dispute, a summary of the terms of the BCL Agreement is presented along with a synopsis of the events that caused the Company's dispute with BCL.

BCL Agreement Summary

BCL is the sole holder of the BCL Licenses. Under agreements (the "Agreements") between the Company, BCL and Asia Intercept Mining Group ("AIM"), a new corporation (the "TSR Company") was to be created which would hold the BCL Licenses.

Under the Agreements, AIM had the right to earn up to an 80% interest in the TSR Company by contributing funds to the TSR Project in phases to satisfy certain work commitments. The Agreements provide Garrison with the ability to acquire the right to earn a share of AIM's interest in the TSR Company, up to a maximum of 50%, by contributing a total of US$1.6 million, in three phases, for resource drilling and on upgrading existing mining facilities.

Particulars of Dispute

In April of 2007, work commenced on the BCL Licenses, with sampling, mapping and geophysics being conducted. Garrison incurred $410,572 in deferred exploration expenditures in the completion of these exploration activities. In addition, the Company purchased $460,961 in equipment, which was comprised of two drill rigs and other underground mining equipment, vehicles (including front end loader vehicles), generators, a satellite dish, and portable housing, to be used on the BCL Licences.

During August of 2007, Garrison prepared and submitted to BCL a report of its cash expenditures (with receipts) as required under the Agreements, in order to demonstrate that it had satisfied the first phase requirement for expenditures. By satisfying the first expenditure requirement, Garrison expected BCL to relinquish a 25% interest in the TSR Company.

Response of the Company to the Dispute

Following submission of that report, it became clear that BCL had no intention of completing a transfer of its interest in the TSR Project to the TSR Company and would not approve Garrison's expenditures on the TSR Project.

Through its Mongolian subsidiary, Garrison is in the process of determining its rights under the Agreements. It has also submitted its accounts for independent audit to verify its expenditures, and has applied for review of the Agreements by the Mongolian courts.

As the disagreement with BCL will likely involve a long legal battle as local courts generally act slowly in these cases, and as the outcome of such proceedings is unclear, the Company decided to write off the $410,572 in deferred exploration expenditures it incurred. As the mining equipment can be used on Garrison's Tovshiir property, an unrelated property, no write off of this equipment occurred as of June 30, 2007 and such equipment was transferred to that property.

Until this dispute has been resolved, the Company does not anticipate completing any further work on the BCL Licenses.

Garrison intends to pursue exploration activities under previously acquired Exploration License No. 10866X, which provides the Company with the right to conduct exploration in the area of the TSR Project. Such activities, however, have been halted for the winter.

About the Company

Garrison is a junior mineral exploration company focused on acquiring and developing advanced stage gold properties in Mongolia. For complete details on Garrison International Ltd. and its partners, management encourages investors and interested parties to view its public documents filed on SEDAR at

For all Garrison International Ltd. investor relations needs, investors are asked to visit the Garrison International IR Hub at where they can post questions and receive answers within the same day, or simply review questions and answers posted by other investors. Alternatively, investors are able to e-mail all questions and correspondence to where they can also request addition to the investor e-mail list to receive all future press releases and updates in real time.


No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein. All statements, other than statements of historical fact, in this news release are forward-looking statements that involve various risks and uncertainties, including, without limitation, statements regarding the future plans and objectives of Garrison International Ltd. There can be no assurance that such statements will prove to be accurate. Actual results and future events could differ materially from those anticipated in such statements. These and all subsequent written and oral forward-looking statements are based on the estimates and opinions of management on the dates they are made and are expressly qualified in their entirety by this notice. Garrison International Ltd. assumes no obligation to update forward-looking statements should circumstances or management's estimates or opinions change.

Shares Outstanding - 65,738,057

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

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