Great Western Minerals Group Ltd.

Great Western Minerals Group Ltd.

May 28, 2009 14:33 ET

Great Western Minerals Group Provides Update on Steenkampskraal Project in South Africa

SASKATOON, SASKATCHEWAN--(Marketwire - May 28, 2009) - Great Western Minerals Group Ltd. (TSX VENTURE:GWG) (PINK SHEETS:GWMGF) ("GWMG" or the "Company") is pleased to provide an update with respect to the option agreement with Rare Earth Extraction Co. Ltd. ("Rareco") of Stellenbosch, South Africa, announced January 13, 2009, to refurbish, re-commission, and operate the currently abandoned Steenkampskraal underground mine in the Western Cape, South Africa.

The Company is pleased to report that the application for conversion of the Old Order Mining Right to a new mining license was submitted on time and has been receipted by the South African Department of Mineral and Energy Affairs ("DME"). Confirmation that the new permit application has been accepted ("Confirmation of Acceptance") from the DME is expected in due course.

The updated feasibility study, originally reported as expected at the end of Q1 2009, is in progress and will be delivered to GWMG when completed.

Under the terms of the agreement, GWMG has paid Rareco an initial payment of ZAR500,000 (approximately C$62,500). A second payment of ZAR500,000 will be made upon delivery, by Rareco, to GWMG, of the Confirmation of Acceptance from the DME and the updated feasibility study.

Subject to approval by GWMG of the updated feasibility study, the Confirmation of Acceptance, and other due diligence information to be provided by Rareco, GWMG and Rareco will negotiate a Supply Agreement under which 100% of the rare earth ore mined and processed will be made available, by Rareco, to GWMG, for a ten-year period, after which a new Supply Agreement can be negotiated.

With one of the highest historical in-situ grades in the world at 16.74% total rare earth oxide ("TREO"), the Steenkampskraal property is located approximately 70 km north of the town of Vanrhynsdorp, population 4,000, in the Western Cape Province of South Africa and is approximately 350 km north and west of Cape Town. Infrastructure is excellent, with access to the site by paved and gravel roads and close proximity to rail and sea-port; the governments are pro-development, and there is technical expertise available as well as a trainable work force. The mine originally operated through a subsidiary company of Anglo American Corporation from 1952 to 1963, making a monazite concentrate that was sold mostly for its thorium content rather than its rare earth content, and was the largest thorium source in the world during the years 1951 to 1963.

The existing Steenkampskraal Mining Licence covers 474 hectares. The mineral deposit is tabular in shape with a known strike length of 400m and has been traced down dip for 250m. The deposit also contains significant amounts of copper, gold and phosphate which could be recovered as by-products along with thorium. Very little exploration work has been done on the property and the deposit remains open along strike and at depth.

Jim Engdahl, President and CEO of Great Western Minerals Group said "We are pleased at the progress made to date in renewing the mining permit at Steenkampskraal and look forward to receiving the updated feasibility report. This project could be very important to GWMG in achieving early production of rare earths."

Gary Billingsley (C.A., P.Eng, P.Geo), Executive Chairman of Great Western Minerals Group is the Qualified Person responsible for reviewing the contents of this release.

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 and South Africa. 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 aluminum, copper, nickel, cobalt and the rare earth elements.

Cautionary Statement on Forward-Looking Information: The statements made in this News Release may contain certain forward-looking statements. Actual events or results may differ from the Company's expectations. Certain risk factors may also affect the actual results achieved by the Company.

CUSIP: 39141Y 10 3

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