Greystar Resources Ltd.

Greystar Resources Ltd.

May 25, 2006 23:00 ET

Greystar Adds to Angostura Land Package and Updates Activities

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - May 25, 2006) - Greystar Resources Ltd. ("Greystar") (TSX:GSL)(AIM:GSL) is pleased to report that it has added new concessions which both complement and expand the land position around its wholly-owned, multi-million ounce Angostura gold-silver resource in northeastern Colombia.

Adding to the Angostura land package, Greystar has reached an agreement to acquire the Armenia Permit (6979) and the 101-68 Mining License, as well as the surface rights that extend considerably beyond the previous concession limits. On the exploration front, Greystar has been granted a new 3,800 hectare concession located southwest of the town of Vetas.

"The new resource study and ongoing metallurgical studies are starting to hit full stride with the scoping study set to follow," states the Company's Executive Vice President, Frederick Felder. "And the addition of these properties not only solidify ground around Angostura but also open up new exploration potential for Greystar in Colombia."

Resource Study Update

The resource evaluation, which is designed to build on the August 2005 resource estimate for the Angostura deposit that came in at 5.83 million ounces of gold and 24.6 million ounces of silver within an indicated resource of 148.14 million tonnes grading 1.22 grams gold per tonne and 5.17 grams silver per tonne, plus another 4.47 million ounces of gold and 21.5 million ounces of silver within an inferred resource of 123.3 million tonnes grading 1.13 grams gold per tonne and 5.42 grams silver per tonne using a cut off of 0.4 gram gold for oxide and 0.55 gram gold for sulphide (Press Release August 16, 2005), was advanced in the second half of April with a two week visit from industry consultants Strathcona Mineral Services Limited and a two week visit by a geo-statistical consultant from Lima. This more recent work and the geological interpretation, which was first started in early February, is resulting in a significant refinement of the geological model. The abundance of previous data and the addition of substantial new results have prompted a new approach to the modeling work, one that involves building a resource model that will allow the updating of new information without having to undertake a whole new study. To this end, the current model is more customized for the Angostura deposit making future updates much more time efficient and given the continued flow of new information, especially in the prospective north and northeast extensions of the Angostura deposit, this new capacity for resource updates will be especially beneficial for future economic evaluations. It is now expected that more than 50,000 metres of new drilling in over 140 drill holes will be incorporated in the new resource study, which is in addition to the 112,797 metres of drilling information used in the August 2005 resources study.

Metallurgical Work

Early results from the test program have indicated that the oxidized zones of the deposit appear to be very amenable to direct cyanidation, as does some of the unoxidized (transitional and sulfide rich) material.

The most recent testing is in progress on 24 drill core composites comprising seven oxide, nine transition and eight sulfide samples. Scoping level heap leach cyanidation and milling/cyanidation (bottle roll) tests and detailed analyses are being conducted on each composite. Scoping level flotation testing is being conducted on all sulfide and transition composites. Oxide composites and certain transition and sulfide composites representing zones shown during preliminary testing to be amenable to heap leaching, are being subjected to column percolation leach testing. This current work is being done mainly by METCON Research (Tucson, AZ), with some work being done in parallel by CIMEX (Colombia).

While all of the preliminary tests of oxide composites were amenable to heap leaching as were some of the transition materials, some of the sulfides were not as responsive to cyanidation. As such, alternate processing routes are being considered.

Column leach testing is in progress at METCON on 15 oxide, transition and sulfide ore composites that were selected based on results from bottle roll testing. Some parallel column testing is being conducted at CIMEX. The column tests are being conducted to verify amenability of the ore to cyanidation treatment under simulated heap leaching conditions.

Scoping level flotation testing conducted on sulfide and transition composites by METCON and CIMEX yielded sufficiently encouraging results to warrant a detailed flotation study on three master composites. The purpose of this study is to optimize gold and silver recovery, concentrate grade and selectivity during flotation processing of the Angostura ore. After a competitive bid process, G & T Metallurgical Services Ltd. (Kamloops, B.C.) was selected for this work, which is now in progress.

A scoping level evaluation of precious metal recovery from flotation concentrates has also been conducted at METCON. Preliminary results indicate that oxidative pretreatment (roasting) of flotation concentrates significantly improved gold recovery by cyanidation of the flotation rougher concentrate. Follow-up testing is planned which, along with the detailed flotation testing program, will be used to determine whether concentration by flotation will be a viable processing route for sulfide and transition ore types that do not respond well to milling/cyanidation treatment.

Because sulfides may require different treatment, it will be necessary to develop a testing protocol that will allow quantifying the different ore types that have differing recovery and processing characteristics. Once established, these tests will be used on drill composites to provide the resources model with this parameter.

Scoping Study

International consulting firm, Hatch Ltd. conducted a site visit in February and is currently monitoring the metallurgical test work. Upon completion of the resource study, now expected in late June, the Hatch scoping work will commence in earnest.


At a regional forum in Bucaramanga on May 8, the concept of a new 9 km connector road between the Angostura Project and the town of Vetas received positive responses from both the Departmental government level and the community governments. The road is being proposed as a multi purpose road to facilitate ecotourism as well as mining activity. The route of the new road is such that it will traverse mostly high country from Vetas to the Angostura site. From Vetas an improved gravel road connects to a paved highway to Berlin where it meets the main paved highway to the regional center of Bucaramanga. Travel time between Bucaramanga and Angostura via Vetas is expected to be reduced by about one hour and the new route will accommodate the large loads that would be required for the development of Angostura. The proposed connector road is part of a network of new access to the California, Surata and Vetas areas that the government agencies are considering. Ultimately access to the Angostura Project will be provided from two different directions thus insuring transportation for labor and materials from all nearby communities.


The results of the Company's drilling program have been reviewed, verified (including sampling, analytical and test data) and compiled by the Company's geological staff (which includes a qualified person, Frederick Felder, P.Geo., for the purpose of National Instrument 43-101, and Guidance Note for Mining, Oil and gas Companies issued by the London Stock Exchange in respect of AIM companies, which outline standards of disclosure for mineral projects). Frederick Felder, P.Geo., has over 30 years of mineral exploration experience, is a member in good standing with the Association of Professional Engineers and Geoscientists of British Columbia and is the qualified person responsible for this release.

The Company has implemented a quality control program to ensure sampling and analysis of all exploration work is conducted in accordance with the best possible practices. Under these quality assurance measures, drill core is sawn in quarters (HQ) or halves (NQ), with one quarter or one half of the core samples shipped to ALS-Chemex Laboratory (ISO 9002 registered) in Vancouver, B.C. for analysis. The remainder of the core is retained for future assay verification. Gold analysis is conducted by fire assay (one assay tonne) using an atomic absorption finish. The laboratory reassays using the ALS-Chemex protocol, and additional checks may be run on anomalous values. Greystar has independent re-analysis and sample preparation checks run at other accredited laboratories. The Company also introduces background blanks prepared from previously analyzed core samples from the Angostura Project.

Forward-Looking Statement

Some statements in this report contain forward-looking information. These statements address future events and conditions and, as such, involve inherent risks and uncertainties. Actual results could be significantly different from those projected.

All dollar amounts are in Canadian dollars, unless otherwise stated.

No Stock Exchange has reviewed or accepts responsibility for the adequacy or accuracy of this news release.

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