Greystar Resources Ltd.
TSX : GSL
AIM : GSL

Greystar Resources Ltd.

January 16, 2007 02:00 ET

Greystar Announces Positive Bio-Oxidation Results

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Jan. 16, 2007) - Greystar Resources Ltd. ("Greystar") (TSX:GSL)(AIM:GSL) is pleased to report that preliminary metallurgical testing of sulphide composites from its wholly-owned multi-million ounce Angostura gold-silver resource in northeastern Colombia to bio-oxidation pretreatment with cyanidation of the bio-oxidized residues has yielded gold recoveries of 92% and 86%.

Colorado-based Little Bear Laboratories completed the bio-oxidation testing on two Angostura sulphide samples. The first sample, which graded 1.51 grams gold per tonne, and yielded 42% gold recovery by cyanidation without bio-oxidation, showed an increase to 92% gold extraction after 92% bio-oxidation. Gold extraction by cyanidation of the second sample, grading 3.64 grams gold per tonne, increased from 39% without bio-oxidation to 86% after 90% bio-oxidation.

Both samples were readily bio-oxidized in stirred reactor batch tests with nominally less than 150 mesh material at 10% solids at 36-to-37 degrees Celsius. The gold extraction increased with the extent of oxidation and it is anticipated that milling the ore more finely would probably increase the rate and extent of pyrite bio-oxidation, likely resulting in even higher gold extractions. Silver extractions for the unoxidized samples were 85% and 69%, respectively and did not increase with the extent of bio-oxidation. This amenability testing program is considered the first step in the potential evaluation of the Angostura sulfide mineralization to whole ore bio-oxidation or bio-oxidation of flotation concentrate.

"The latest metallurgical work indicates that the sulphide mineralization is very amenable to bio-oxidation followed by cyanidation, with gold recoveries in the 90% range," stated Greystar's Executive Vice President, Frederick Felder, P.Geo. "Overall, the metallurgical results received to date confirm that high recoveries of gold for sulphides can be attained at Angostura, given sufficient grade to justify such processes which may enhance any potential project economics. We view these results positively as they provide the alternative of producing an on-site dore product from concentrates, and possibly for some of the intermediate grade sulfides as an option for enhanced recovery."

Test work to assess the metallurgical parameters and metal recoveries from the Angostura oxides, transitional material and the primary sulphides has made significant strides over the past year. Last year, a preliminary flotation testing program completed at British Columbia-based G&T Metallurgical Services Ltd. demonstrated that the Angostura sulfide mineralization also responds well to concentration using conventional flotation methods. Gold recoveries of greater than 90% were obtained from the two sulfide drill core composites evaluated, with rougher concentrate weight pulls of 10% to 14%. These results indicate good potential for processing the Angostura sulfide mineralization using a flow sheet incorporating flotation, oxidative treatment of the flotation concentrate, and cyanidation of the oxidized product. Follow-up testing is continuing to evaluate the response of flotation concentrate produced from the sulfide mineralization to oxidative pretreatment followed by cyanidation.

Meanwhile, results from a detailed heap leach testing program at Arizona-based METCON Research confirmed that oxide drill core composites were readily amenable to simulated heap leach cyanidation treatment. Column test gold recoveries obtained from the oxide composites at a 19mm feed size averaged greater than 90% in 60 days of leaching.

Results from the same heap leach testing program have shown that the transition drill core composites were also amenable to simulated heap leach cyanidation treatment. Column test gold recoveries from those composites averaged 74.1% in 60 days of leaching at a 19mm feed size. Results from earlier testing on two other transition drill core composites showed those composites to be amenable to simulated heap leach cyanidation treatment at 25mm and 13mm feed sizes.

To date the METCON work includes 28 column tests and 76 bottle roll tests. The work at G&T Metallurgical includes a total of 47 flotation tests. The metallurgical test work has now advanced to the stage where the projected economics of the Angostura oxides and transitional material can be optimized by evaluating the sensitivity of the ore to crush size and leaching conditions. On the deeper sulphide material, metallurgical test work will focus on the most likely potential processing alternatives (roasting, autoclaving or bio-oxidation) for flotation concentrate generated from the Angostura sulfide mineralization.

"Our on-going metallurgical program for the Angostura gold-silver project continues to yield encouraging results," said David Rovig, CEO of Greystar. "Test results suggest that we will be able to treat the oxide and transitional material by low-cost, heap leach cyanidation, while promising options are emerging for obtaining equally high gold recoveries from the sulfide portion of the deposit."

Based on the December 2006 resource update estimation, the Angostura deposit hosts an indicated resource of 7.42 million ounces of gold in 173.4 million tonnes of material grading 1.33 grams gold per tonne and an inferred resource of 4.2 million ounces of gold in 80.9 million tonnes grading 1.62 grams gold per tonne. Resource estimation was undertaken in compliance with CIM Mineral Resource and Mineral Reserve definitions that are referred to in National Instrument (NI) 43-101, Standards of Disclosure for Mineral Projects. A location map of the Angostura drilling, along with a map of the underground tunnel work, can be accessed from our home page link at Greystar's website: www.greystarresources.com.

REVIEW BY QUALIFIED PERSON, QUALITY CONTROL AND REPORTS

The results of the Company's metallurgical program have been reviewed, verified (including sampling, analytical and test data) and compiled by the Company metallurgical consultant Mr. Jack McPartland, in consultation with a qualified person, Mr. 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 halves with one half of the core prepped on site and 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 re-assays 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 STATEMENTS

Certain statements included in this press release are forward-looking statements within the meaning of Canadian securities laws, including: the interpretation of metallurgical test results with respect to future gold recoveries from Angostura, the anticipated results of further metallurgical testing at Angostura and the estimated resources at Angostura. Forward-looking statements are based on estimates and assumptions made by Greystar in light of its experience and perception of historical trends, current conditions and expected future developments, as well as other factors that Greystar believes are appropriate in the circumstances. Many factors could cause Greystar's actual results, performance or achievements to differ materially from those expressed or implied by the forward-looking statements, including: risks relating to additional funding requirements; discrepancies between actual and estimated resources; exploration, development and operating risks; limited experience with development-stage mining operations; dependence on one principal exploration stage property; gold price volatility; political and foreign risks; uninsurable risks; competition; production risks; regulatory restrictions, including environmental regulatory requirements and liability; currency fluctuations; defective title to mineral claims or property and dependence on key employees. These factors and others that could affect Greystar's forward-looking statements are discussed in greater detail in the section entitled "Risk Factors" in Greystar's Annual Information Form dated March 30, 2006 which is available at www.sedar.com and elsewhere in documents filed from time to time with Canadian provincial securities regulators and other regulatory authorities. Persons reviewing this presentation are cautioned not to place undue reliance on forward-looking statements due to inherent uncertainty therein. Greystar disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

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

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