Western Prospector Group Ltd.

Western Prospector Group Ltd.

May 16, 2006 10:34 ET

Western Prospector Group Ltd.: Mongolian Tax on Copper and Gold

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - May 16, 2006) - Western Prospector Group Ltd. (TSX VENTURE:WNP) -

On May 12, 2006, the Mongolian Government's national parliament reportedly approved passing of a windfall profits tax law applied to copper and gold production. Western Prospector's Saddle Hills Uranium Project is not directly affected by this law.

It should be noted that of the 76 elected members of parliament, only 35 members voted in favour of the tax bill, with 10 members voting against and 31 members absent. There is speculation that the President of Mongolia may exercise his authority to veto the tax bill within the next week.

Although the windfall profits tax bill only applies to copper and gold, Western Prospector has registered its concern, with letters to Mongolian President, N. Enkhbayar and the Prime Minister, M. Enkhbold, citing concerns that if the tax bill were enacted, it would jeopardize Mongolia's opportunity to obtain foreign capital necessary for the building of a Mongolian mining industry.

Western Prospector will continue to participate in lobbying efforts with numerous other foreign and domestic mining and exploration companies in Mongolia, to address changes to the Mongolian Tax Act, as well as certain proposed amendments to the Mongolian Mining Law.

Western Prospector has allocated an approximate US$ 48 million of its budget to bring the Saddle Hills Uranium Project to a production decision in 2007. It is anticipated that production could commence in 2009.

John S. Brock, President & CEO

This release includes certain statements that may be deemed "forward-looking statements". All statements in this release, other than statements of historical facts, that relate to Western Prospector's expectations regarding the outcome of the litigation and events or developments that Western Prospector expects to occur, are forward-looking statements. Such statements are identified in this release by the use of words such as "will" and "expected" as well as the use of the future or conditional tense. Although Western Prospector believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements. Factors that could cause actual results to differ materially from those in forward-looking statements include risks associated with litigation and other risk factors generally set forth in Western Prospector's public filings. Investors are cautioned that any such statements are not guarantees of future performance and actual results or developments may differ materially from those projected in the forward-looking statements. Western Prospector does not assume any obligation to update or revise its forward-looking statements, whether as a result of new information, future events or otherwise.

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

Contact Information

  • Western Prospector Group Ltd.
    John S. Brock
    President & CEO
    (604) 687-4951
    (604) 687-4991 (FAX)