Great Western Minerals Group Ltd.
TSX VENTURE : GWG
OTC Bulletin Board : GWMGF

Great Western Minerals Group Ltd.

March 28, 2006 17:38 ET

Great Western Minerals Group Ltd.: Hoidas Lake Technical Report Recommends Proceeding to Prefeasibility/Feasibility

SASKATOON, SASKATCHEWAN--(CCNMatthews - March 28, 2006) - Great Western Minerals Group Ltd. (TSX VENTURE:GWG) (OTCBB:GWMGF)

The Company is very pleased to report that it has received the Resource Model and Technical Report on the Hoidas Lake Rare Earth Project from Wardrop Engineering Inc. ("Wardrop"). The report is in compliance with National Instrument 43-101 of the Ontario Securities Commission. The report was, in Wardrop's words, "undertaken for the furtherance of prefeasibility and feasibility studies for an economic recovery of the rare earth and related elements from Hoidas Lake". Wardrop concludes: "It is recommended that the present course of action by Great Western Minerals Group be continued, with a focus on metallurgical work for the development of a suitable product for consumption, by its subsidiary Great Western Technologies".

Resource Estimate

The resource model is based on data from 12 surface trenches and 70 core holes along a zone striking in excess of 700 metres and open at a depth of 125 metres. A number of veins were identified during the geological interpretation and, for the purposes of the Technical Report, were designated JAK zone veins A through H. The resource estimate used ordinary kriging, nearest neighbour, and inverse distance interpolation methods, with the ordinary kriging values used for reporting. Based on preliminary economics generated by the Company, a cut-off grade of 1.5% total rare earth elements ("TREE") was applied for summary reporting purposes. The resource model uses the assay data provided by the Company, but based on their independent check assays Wardrop concludes: "Testing of that data suggests the assay results may be low, which would result in underestimation of the contained units of REEs in the model." The tabulated resource data for the Hoidas Lake JAK Zone as calculated by Wardrop is as follows:



Cut-Off Grade TREE + Y TREO + Y2O3
Category WT.% TREE + Y Tonnes WT.% WT.%
--------------------------------------------------------------
Measured 1.5 123,000 2.466 2.956
--------------------------------------------------------------
Indicated 1.5 430,000 2.305 2.762
--------------------------------------------------------------
Inferred 1.5 812,000 2.039 2.445
--------------------------------------------------------------
Total 1.5 1,365,000 2.163 2.591
--------------------------------------------------------------
--------------------------------------------------------------


- Total Rare Earth Oxide-calculated from TREE for comparison purposes.

For information purposes, using a 0.5% TREE cut-off grade results in an estimate of 1,756,000 tonnes grading 1.931% TREE (2.314%TREO) in all three categories. A 2.0% cut-off grade results in 775,000 tonnes grading 2.463% TREE (2.951% TREO), including 358,000 tonnes grading 2.659% TREE (3.186% TREO) in the measured and indicated resources categories.

Perspective

The in-house economic model for the Hoidas Lake deposit has always used REE demand in the United States for base case figures. According to the United States Geological Survey the RE industry in the US is estimated in excess of US$1 billion annually, with consumption at approximately 30,000 tonnes of TREO. If it is assumed that an initial goal would be to have Hoidas Lake supply 10% of US demand, or 3,000 tonnes of TREO equivalent annually, then the resource estimate in the measured and indicated category would translate into a mine-life of 5.2 years and 11.8 years based on the estimate from all three resource categories. In terms of mine size, it means a facility capable of processing 300 to 400 tonnes per day. "This is exactly where we want to be at this stage of development," states Jim Engdahl, President. "Heading to prefeasibility and feasibility with the potential for a 10 to 15 year mine-life means we can now focus on the metallurgy and marketing side of project development, as recommended by Wardrop."

Metallurgy

Metallurgical testwork on the Hoidas Lake mineralization is being carried out at the Center for Advanced Mineral & Metallurgical Processing ("CAMP"), located in Butte, Montana, under the direction of Melis Engineering Ltd. ("Melis"). The REEs at Hoidas Lake are hosted in the phosphate mineral apatite and the silicate mineral allanite. Previous work identified three possible flowsheets for mineral processing of the rare earth minerals and demonstrated that the mineral assemblages are amenable to acid leaching. Recent work has focused on exploring whether the rare earth values can be upgraded during beneficiation using techniques such as flotation as a possible process step ahead of the hydrometallurgical extraction (leaching). Results have confirmed that the phosphate (apatite) can be separated from the silicates (allanite) by flotation. Further flotation tests are now underway as well as exploring whether heavy liquid separation and magnetic separation could be useful in beneficiation. Hydrometallurgical testing will be initiated to determine the extraction efficiencies of the different lixiviants (both acids and bases) on the different concentrates, tails and "whole ore".

Winter Program

As part of their conclusions Wardrop states: "The JAK Zone at Hoidas Lake has a demonstrated resource, which could be further expanded by drilling along strike and down-dip using the observed principle geologic controls of the vein system and its geophysical expression. Drilling to expand the resource is recommended at the north end of the JAK Zone where significant vein thickness is indicated by initial drilling." Anticipating this recommendation, the Company recently completed a 22-hole, 2,226 metre drill program on the JAK Zone and related structures with emphasis on the north end of the JAK Zone. The core has been logged and split and samples submitted for assay. Once the results are received, another resource calculation will be carried out and it is expected that the resource estimate in all categories will be upgraded significantly. While the zone is open in all directions, it is not anticipated that any further major drill programs will be carried out heading to prefeasibility and feasibility.

"This is a major step forward in the development at Hoidas Lake and the growth of Great Western Minerals into a potential rare earth producer," says Jim Engdahl. "With a resource estimate now attached to a very small portion of the total mineralized fault system at Hoidas, we can turn our attention to aggressively designing a value-added product mix targeting the alternative energy market. Through Great Western Technologies Inc., we have a good start at doing just that, and our goal is to significantly enhance the economics of the Hoidas Lake project through this value-added approach."

Jim Engdahl, President

CUSIP: 39141Y 10 3


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

Contact Information

  • Great Western Minerals Group Ltd.
    Gordon Dent
    (306) 668-0701
    Email: info@gwmg.ca
    Website: http://www.gwmg.ca
    or
    Great Western Minerals Group Ltd.
    226 Cardinal Crescent
    Saskatoon, SK S7L 6H8