Goldsource Mines Inc.
TSX VENTURE : GXS
FRANKFURT : G5M

Goldsource Mines Inc.

July 15, 2010 09:30 ET

Goldsource Reports Border Coal Results

VANCOUVER, BRITISH COLUMBIA--(Marketwire - July 15, 2010) - Goldsource Mines Inc. (TSX VENTURE:GXS)(FRANKFURT:G5M) (the "Company") reports results on 27 core holes completed for 3,769 metres drilled during the 2009 - 2010 winter exploration program at its wholly-owned Border Project ("Border") located near Hudson Bay, Sask. Proximate analyses for 13 drill holes are reported in the table below. Numerous intercepts of greater than 40 metres of coal were encountered with the coal in the Niska 107 deposit nearer to surface, generally showing lower ash content and higher calorific values than other deposits. Minor coal seams were encountered in some of the remaining 14 holes, while others were drilled outside the periphery of the deposits.

For this phase of exploration, numbering of drill holes continues sequentially from previous programs beginning at BD09-116. Deposit names are based on an identifier in the general location, and areas are designated according to discovery hole numbers.

Hole ID Deposit From (m) To (m) Coal (m) Ash (ar) % Moisture (ar) % Sulfur (ar) % Calorific Value kg/KJ (ar) % Calorific Value BTU/lb (ar)
BD10-120 Niska 107 60.5 85.3 24.7 13.2 24.3 2.4 18,392 7,907
BD10-121 Niska 107 71.8 116.0 44.2 10.3 32.8 2.4 16,564 7,121
BD10-125 Niska 107 71.5 126.0 54.5 16.2 33.8 2.2 14,291 6,144
BD10-127 Niska 107 51.0 59.4 8.4 23.0 29.4 1.8 13,433 5,775
BD10-133 Niska 107 46.5 53.5 7.0 14.8 27.2 1.6 16,501 7,094
BD10-136 Niska 107 94.3 121.0 26.7 19.2 28.0 2.0 15,339 6,595
BD10-138 Niska 107 55.4 62.5 7.1 17.4 25.2 1.9 16,513 7,099
BD10-119 Niska 108 99.5 148.1 48.6 16.2 24.8 2.5 17,434 7,495
BD10-123 Niska 108 119.0 137.0 21.0 14.5 33.4 2.3 15,401 6,621
BD10-135 Niska 108 70.3 80.0 9.7 26.9 21.9 2.0 14,220 6,113
BD10-139 Niska 108 80.1 103.7 23.6 22.4 24.1 1.8 15,327 6,589
BD10-124 Pasquia 2 85.2 123.2 38.0 not analyzed - for future test work Pasquia 2 hydrology hole
BD10-140 Chemong 3 77.3 152.0 74.7 not analyzed - for future test work Chemong 3 in-fill hole
NOTE: All numbers are "as-received" (ar) and rounded. Coal intervals are based on less than 1.6 density, and a Calorific Value (Heat Value) of greater than 14k kg/KJ.

To date, drilling has identified 17 coal deposits at Border, with the recent Fugro airborne gravity surveys indicating good potential for additional coal discoveries and the expansion of several existing deposits.

Goldsource will incorporate data from the winter 2009 – 2010 drill program into an updated NI 43-101 Technical Report, which will include an updated resource model and revised estimates. It is anticipated that much of the 89.6 million tonnes of Inferred resources will be upgraded to the Indicated resource category.

The Preliminary Economic Assessment ("PEA") continues under the direction of Marston Consultants and EBA Engineering Consultants. Initial results from the PEA suggest:

  • An on-site 500 MW clean coal-fired generator is the first choice for an end use of the coal. Design of the coal-fired electric generating plant can accommodate the coal quality of the deposits. Abundant biomass resources available in Saskatchewan to offset CO2 emissions for a reduced carbon footprint can supplement this fuel. Recent power studies suggest that a 500 MW generator would help fulfill Saskatchewan's future power requirements.
  • An on-site coal to liquids plant appears to be a second alternative for an end use of the coal. Goldsource has signed confidentiality agreements with providers of this technology which will be assessed as part of the PEA. Indications are that these technologies can be economically competitive with the current price of oil. Based on conversion ratios of 1.5 to 3.0 barrels of oil equivalents per tonne of coal, there are an estimated 200 to 400 million barrels of oil equivalent contained in the Border Coal deposits.
  • A review of potential power generation partners is underway. In addition, the study will examine mining and capital costs, transportation and potential export markets.

Goldsource anticipates completion of the PEA in Q3, 2010.

Results from a recent Fugro airborne Falcon gravity survey completed in the spring of 2010 have been received. Initial assessment of the data shows expanded boundaries of existing deposits as well as newly defined targets. The Company believes that the test programs have enhanced its ability to identify new deposits and better define the boundaries of these unique deposits. Depending on the availability of financing, the Company plans to drill these targets in late summer 2010 to expand near-surface resources and identify potential tonnages of improved coal quality.

Current coal resources at Border include:

  Indicated Resources: 63.5 million tonnes  
  Inferred Resources: 89.6 million tonnes  
  Speculative Resources: 18.7 million tonnes  

Please refer to Moose Mountain Technical Services NI 43-101 "Technical Report on the Border Coal Property, Resource Estimation" dated December 24, 2009 and available on www.sedar.com.

Goldsource's President, J. Scott Drever states that, "We believe that we have successfully achieved our main goal of converting the Inferred Resources in the Niska deposits to the higher category of Indicated Resources. In doing so, we will have exceeded the threshold target of 100 million tonnes of Indicated Resources necessary to support a potentially economic operation of significant size. The completion of the Marston Preliminary Economic Assessment later this year will provide guidance as to what options are available for development of the resources and how the significant value of these coal assets can be realized."

Goldsource Mines Inc. (TSX VENTURE:GXS) is a resource company that is engaged in the exploration and development of Canada's newest coalfield in east-central Saskatchewan. The Company has aggressively drilled only a portion of this new thermal coalfield, and has discovered 17 coal deposits of varying size with coal zone thicknesses greater than 100 meters within the permit area of the Border Coal Project. An experienced management team, who has accumulated a century's worth of international mining success, leads Goldsource. The Company is well financed, and based in Vancouver, BC.

This news release contains forward-looking statements, which address future events and conditions, which are subject to various risks and uncertainties. The Company's actual results, programs and financial position could differ materially from those anticipated in such forward-looking statements as a result of numerous factors, some of which may be beyond the Company's control. These factors include: the availability of funds; the timing and content of work programs; results of exploration activities and development of mineral properties, the interpretation of drilling results and other geological data, the uncertainties of resource and reserve estimations, receipt and security of coal permits and mineral property titles; project cost overruns or unanticipated costs and expenses, fluctuations in commodity product prices; currency fluctuations; and general market and industry conditions. Forward-looking statements are based on the expectations and opinions of the Company's management on the date the statements are made. The assumptions used in the preparation of such statements, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements.

J. Scott Drever, President

GOLDSOURCE MINES INC.

Neither the TSX-Venture Exchange nor its Regulation Services Provider accepts responsibility for the accuracy or adequacy of this release.

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