Gossan Resources Limited
FRANKFURT : GSR
TSX VENTURE : GSS

Gossan Resources Limited

May 15, 2006 17:28 ET

Gossan Completes Drill Program at Inwood Magnesium Property

WINNIPEG, MANITOBA--(CCNMatthews - May 15, 2006) - Gossan Resources Limited (TSX VENTURE:GSS)(Frankfurt/Freiverkehr:GSR) completed a 27-hole drill program, totaling 496.2 metres, on its Inwood Magnesium Dolomite Property on May 13, 2006. Watts, Griffis McQuat (WGM) have been retained to undertake a National Instrument 43-101 Report resource calculation based on the results from the current drill program and 25 holes previously drilled on the Property. WGM's Qualified Person, Don Hains, P.Geo., MBA, was on site for the last 3 days of the drill program to insure required quality control & assurance procedures were implemented and to monitor the drilling, logging and sampling.

The 1633-hectare Inwood Property, located in south-central Manitoba, hosts significant near-surface beds of high-purity dolomite. Previous drilling of 20 holes and surface mapping by the Manitoba Geological Survey on the Property has outlined a non-compliant NI-43-101 historic resource of 67 million tonnes of high-purity magnesium dolomite (21.6% MgO with less than 0.23% residue) and inferred an additional 33 million tonnes of similar material (Bamburak & Gale-1993). Gossan also completed a 5-hole program in 2003.

The current drill program was conducted at a grid spacing of 200x200 metres over an area of approximately 80 hectares. In this area, Quarter Section SW10-19-1W, the Manitoba Geological Survey identified a non-compliant NI-43-101 historic proven geological reserve of 20.6 million tones and some additional adjacent inferred tonnage. The current program targeted the Fisher Branch Formation which typically outcrops at surface and extends to a depth of about 12-15 metres. Some of the holes also investigated the underlying Upper and Lower Stonewall Formations down to the Lower T Marker, a depth of about 25 metres.

The drill program was conducted by Rodren Drilling. The diamond drill core was logged on site. Split samples, generally of a one metre interval, will be shipped for analysis to TSL Laboratories, an accredited laboratory, in Saskatoon, Saskatchewan. The work was supervised by G. Ryan Cooke, P.Geo., Gossan's Qualified Person for the Inwood Property. Prior to the drill program, WGM's Joe Hinzer, M.Sc., P.Geo. made a site visit and examined selected core from the prior drill programs which is still securely stored by the MGS. Don Hains, P. Geo., MBA, WGM's Qualified Person for this project, has reviewed the contents of this news release.

Previously in the 1990's, Hazen Research Inc. conducted pilot-scale tests and commercial grade magnesium metal was produced from the Inwood dolomite. Additionally, testing at Ballain Consulting determined that the Inwood dolomite reacts favourably during its processing into magnesium metal.

Mintek, a leading, South African-based, mineral and metallurgical technology firm is developing an advanced thermal process based on silicothermic reduction of calcined dolomite, called the Mintek Thermal Magnesium Process (MTMP). This new process is intended to operate continuously at atmospheric pressure and at higher temperatures for better recoveries and throughputs. In the fall of 2003, a 75-kilogram sample of Inwood dolomite was subjected to a variety of tests and measurements by Mintek. In this Characterization Study, Mintek determined that the Inwood dolomite was suitable for magnesium production using the new MTMP process which it is developing. Testing found that the high-purity Inwood dolomite was chemically superior in most respects to the benchmark dolomite used by Mintek for technical evaluation and, when calcined, the Inwood dolomite shows favourable behavior similar to the calcined benchmark.

In mid-2005, Mintek reported on a second stage of testing of the MTMP process using a continuous magnesium condenser. The condenser performed extremely well, achieving continuous production with a condenser efficiency of 85%, and demonstrated the feasibility of a continuous atmospheric process for thermal magnesium production. Gossan and its technical partner, Hatch, are awaiting Mintek to provide an updated cost analysis of the MTMP process.

Gossan is also initiating the review of another alternative magnesium extraction process. Further enhancement of the viability of the Inwood Magnesium Project could result in its spin-off as a separate magnesium-based company with its own unique risks and rewards.

An initial environmental study has been conducted at the Inwood Property. No endangered species were identified in the assessment of the natural environment. Portions of the Inwood Property are part of a wildlife management area. It is Gossan's intention to replenish similar natural environment should production proceed on these portions of the Property. The cost of acquiring replacement land is not considered material to the project. The current drill program was conducted in an area of the property which is unaffected by wildlife management practices.

Gossan Resources Limited is engaged in mineral exploration in Manitoba and northwestern Ontario. It has a well-diversified portfolio of properties hosting gold, platinum group and base metals, as well as the specialty metals, tantalum, chromium, titanium and vanadium. The Company also has a large deposit of magnesium-rich dolomite and a silica sand prospect. Gossan trades on the TSX Venture and the Frankfurt/Freiverkehr & Xetra Exchanges and has 19,694,901 shares outstanding (25,319,678 shares fully diluted).

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

Contact Information

  • Gossan Resources Limited
    Douglas Reeson
    Chairman & CEO
    (416) 533-9664 or Toll Free: (800) 462-4283
    www.gossan.ca