Great Western Minerals Group Ltd.

Great Western Minerals Group Ltd.

September 10, 2009 14:37 ET

Great Western Minerals Group Announces Conversion of Outstanding Debentures

SASKATOON, SASKATCHEWAN--(Marketwire - Sept. 10, 2009) -


Great Western Minerals Group Ltd. (TSX VENTURE:GWG) (PINK SHEETS:GWMGF) ("GWMG" or the "Company") announced today that it has consented, in accordance with the terms of such debentures, to the sale to third party purchasers of its existing secured convertible debentures originally issued on September 27, 2008, (the "Debentures") having an aggregate principal amount of Pounds Sterling 2,500,000, plus an accrued and unpaid Pounds Sterling 300,000 completion fee plus accrued interest. Furthermore, subject to TSXV approval, the Company has consented to the amendment to the terms of the Debentures to allow for the immediate conversion of the entire principal amount, accrued and unpaid completion fee and outstanding interest of the Debentures into 20,720,425 common shares in the capital of the Company ("Common Shares") in accordance with the pricing set forth in the Debentures.

An advisory fee of C$346,653 was paid to Pope & Company Limited of Toronto, which amount was satisfied by the issuance of 1,216,325 Common Shares (the "Finder's Fee"). The securities issued in connection with the Finder's Fee are subject to a four month hold period under applicable Canadian securities legislation.

Jim Engdahl, President and CEO of Great Western Minerals Group is extremely pleased with the conversion of the Debentures. Engdahl said, "This transaction is very positive for our Company. It eliminates over Pounds Sterling 2,800,000 of debt obligations from our balance sheet, the associated 10% interest cost, the security attached to it, as well as the potential overhang from the floating conversion price of these Debentures as they approach maturity. The Company's debt obligations are now limited to a working capital line on its cash flow positive and growing processing business, Less Common Metals, and the recently issued C$816,667 convertible debentures. With the clean up of our balance sheet, along with the recent triggering of the early maturity date on our outstanding warrants exercisable at C$0.15, the Company feels it is in a much stronger financial position to further its projects, to take advantage of the growing interest in the rare earth sector and to realize the benefits of our mine to market business model. The Company has been very pleased with its relationship with Pope & Company in advising on the clean up of our balance sheet over the last several weeks."

Jim Engdahl, President

About Great Western Minerals Group Ltd.

Great Western Minerals Group Ltd. is a Canadian-based company with six rare earth exploration and development properties in North America with an option on a sizable additional property in South Africa. In addition, as part of the Company's strategy to pursue a vertically-integrated business model, the Company's wholly-owned subsidiaries of Less Common Metals Limited located in Birkenhead UK, and Great Western Technologies Inc., located in Troy, Michigan, produce a variety of specialty alloys for use in the battery, magnet and aerospace industries. These "designer" alloys include those containing copper, nickel, cobalt and the rare earth elements.

This news release shall not constitute an offer to sell or the solicitation of an offer to buy securities of the Company in any jurisdiction. The securities to be issued pursuant to the Offering by the Company have not and will not be registered under the United States Securities Act of 1933, as amended (the "1933 Act"), or the securities laws of any state of the United States, and may not be offered or sold in the United States absent registration or an applicable exemption therefrom under the 1933 Act and the securities laws of all applicable states.

Certain information set out in this News Release constitutes forward-looking information, which may include information relating to estimates of sales and revenue of GWMG. Forward-looking statements (often, but not always, identified by the use of words such as "expect", "may", "could", "anticipate" or "will" and similar expressions) may describe expectations, opinions or guidance that are not statements of fact and which may be based upon information provided by third parties. Forward-looking statements are based upon the opinions, expectations and estimates of management of the Company as at the date the statements are made and are subject to a variety of known and unknown risks and uncertainties and other factors that could cause actual events or outcomes to differ materially from those anticipated or implied by such forward-looking statements. Those factors include, but are not limited to risks, uncertainties and other factors that are beyond the control of the Company, risks associated with the industry in general, commodity prices and exchange rate changes, operational risks associated with exploration, development and production operations, delays or changes in plans, risks associated with the uncertainty of reserve estimates, health and safety risks and the uncertainty of estimates and projections of production, costs and expenses. In light of the risks and uncertainties associated with forward-looking statements, readers are cautioned not to place undue reliance upon forward-looking information. Although the Company believes that the expectations reflected in the forward-looking statements set out in this press release or incorporated herein by reference are reasonable, it can give no assurance that such expectations will prove to have been correct. The forward-looking statements of the Company contained in this press release, or incorporated herein by reference, are expressly qualified, in their entirety, by this cautionary statement.

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

Contact Information

  • Great Western Minerals Group Ltd.
    Ron Malashewski
    Manager of Investor Relations
    (306) 659-4500
    Great Western Minerals Group Ltd.
    226 Cardinal Crescent
    Saskatoon, SK S7L 6H8