Great Western Minerals Group Ltd.

Great Western Minerals Group Ltd.

August 25, 2009 12:19 ET

Great Western Minerals Group Closes Private Placement

SASKATOON, SASKATCHEWAN--(Marketwire - Aug. 25, 2009) -


Great Western Minerals Group Ltd. ("GWMG" or the "Company") (TSX VENTURE:GWG) (PINK SHEETS:GWMGF) announced today that it has closed a private placement of USD$760,235 (approximately C$816,667) ("Face Amount") of secured convertible debentures of the Company (the "Debentures"), subject to regulatory approval. The Debentures were sold at a price of approximately C$857 per C$1000 of the Face Amount of each Debenture raising aggregate proceeds of approximately USD$651,630 (C$700,000) (the "Proceeds"). The Debentures mature on May 25, 2010, and the Face Amount of the Debentures is convertible into common shares in the capital of the Company ("Common Shares") at a price of C$0.20 per Common Share in whole or in part at the option of the holder at any time while the Debentures are outstanding. The Company has the ability to repay the Debentures without penalty at anytime and the Debentures have no cash interest component. In addition, an aggregate of 560,000 Common Shares were issued to the subscribers as a commitment fee.

Members of the Pro Group (as defined in the TSX Venture Exchange Corporate Finance Manual) subscribed for an aggregate of USD$760,235 Face Amount of the Debentures.

A cash finder's fee of C$35,000 will be paid to Pope & Company Ltd. of Toronto ("Pope & Company"). In addition, Pope & Company will receive an aggregate of 200,000 broker warrants, with each such broker warrant entitling Pope & Company to purchase one Common Share at a price of C$0.175 for a period of 24 months from the closing date of this transaction.

The proceeds of this financing will be used for payment of outstanding accrued interest to debenture holders who financed the purchase of Less Common Metals Limited by the Company on June 27, 2008, as well as for other corporate purposes. The securities issued under this private placement are subject to a four month hold period under applicable Canadian securities legislation.

Jim Engdahl, President and CEO of Great Western Minerals Group is pleased with this financing. Engdahl said, "This financing refinances interest on outstanding indebtedness that was in default as reported in our March 31, 2009 quarterly financial statements. We will now be current on all outstanding indebtedness. With the improved performance of our Less Common Metals processing subsidiary and the recent triggering of the early maturity date on our outstanding warrants exercisable at C$0.10, the Company feels it is in a strong financial position to manage its debt commitments going forward and is excited to further some of its development initiatives. We are also pleased to be working with Pope & Company on this transaction as they have taken a serious and proactive interest in participating in the rare earth sector".

Jim Engdahl, President

About Great Western Minerals Group Ltd.

Great Western Minerals Group Ltd. is a Canadian-based company exploring for, and developing, strategic metal resources in North America. Pursuing 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, including 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) 659-4516
    Great Western Minerals Group Ltd.
    226 Cardinal Crescent
    Saskatoon, SK S7L 6H8