Great Western Minerals Group Ltd.

Great Western Minerals Group Ltd.

June 15, 2009 06:00 ET

Great Western Minerals Group and Molycorp Minerals, LLC Terminate Discussions of Proposed Transaction

SASKATOON, SASKATCHEWAN--(Marketwire - June 15, 2009) - Great Western Minerals Group Ltd. (TSX VENTURE:GWG)(PINK SHEETS:GWMGF) ("GWMG" or the "Company") announced today that GWMG and Molycorp Minerals, LLC ("Molycorp") have terminated discussions with regard to the letter of intent (the "Letter of Intent") pursuant to which GWMG and Molycorp were discussing the possible acquisition of a controlling interest in GMWG pursuant to a share issuance, merger, amalgamation, or other form of business combination (the "Proposed Transaction") as disclosed in the Company's news release of April 20, 2009.

The structure of the Proposed Transaction, as disclosed on April 20, was to include a mutually beneficial business combination that would substantially maintain GWMG's "mine-to-market" business model. Subsequent revisions to the Proposed Transaction structure, as disclosed in May 4, would have focused on the purchase GWMG's manufacturing assets, including those of Great Western Technologies Inc. and Less Common Metals Limited, and a joint-venture participation in two of GWMG's exploration projects.

Management of GWMG and the Special Committee consisting of independent members of the board of directors of GWMG (the "Board") advised the Board that GWMG and Molycorp could not reach agreeable terms with respect to the revised focus of the Proposed Transaction. As negotiations progressed, management and the Board determined that the structure proposed by Molycorp would not accomplish the original goals of the Proposed Transaction. Management and the Board continue to believe that shareholder value will be best achieved by not selling GWMG's core assets and continuing to pursue GWMG's mine to market strategy and management is continuing discussions with third parties that have indicated an interest in strategic relationships with GWMG.

As such, the Board determined that GWMG could not move forward with negotiation of a definitive agreement relating to the Proposed Transaction and both GWMG and Molycorp have allowed the Letter of Intent to expire in accordance with its terms.

Jim Engdahl, President and CEO of Great Western Minerals Group said "After careful consideration, we did not feel that the direction in which we were heading with Molycorp was in the best interests of our shareholders or that we would be able to come to arrangements that would preserve our unique mine-to-market strategy. In light of the recent and sudden focus on the rare earth sector by the investment markets and in view of the additional interest we have received during the last several months, we will continue to pursue discussions with other potential strategic partners who share our vision as a vertically integrated developer of rare earth properties and products".

Certain information set out in this News Release constitutes forward-looking information. Forward-looking statements (often, but not always, identified by the use of words such as "expect", "may", "could", "anticipate" or "will" and similar expressions) may describe expectations, opinions or guidance that are not statements of fact and which may be based upon information provided by third parties. Forward-looking statements are based upon the opinions, expectations and estimates of management of GWMG as at the date the statements are made and are subject to a variety of known and unknown risks and uncertainties and other factors that could cause actual events or outcomes to differ materially from those anticipated or implied by such forward-looking statements. Those factors include, but are not limited to risks, uncertainties and other factors that are beyond the control of GWMG, risks associated with the industry in general, commodity prices and exchange rate changes, operational risks associated with exploration, development and production operations, delays or changes in plans, risks associated with the uncertainty of reserve estimates, health and safety risks and the uncertainty of estimates and projections of production, costs and expenses. In light of the risks and uncertainties associated with forward-looking statements, readers are cautioned not to place undue reliance upon forward-looking information. Although GWMG believes that the expectations reflected in the forward-looking statements set out in this News Release or incorporated herein by reference are reasonable, they can give no assurance that such expectations will prove to have been correct. The forward-looking statements of GWMG contained in this press release, or incorporated herein by reference, are expressly qualified, in their entirety, by this cautionary statement.

This news release shall not constitute an offer to sell or the solicitation of an offer to buy securities of Great Western Minerals Group Ltd. in any jurisdiction. The securities of Great Western Minerals Group Ltd. have not been registered under the Securities Act of 1933, as amended (the "1933 Act") and may not be offered or sold in the United States absent registration or an applicable exemption therefrom under the 1933 Act and applicable state securities laws.

CUSIP: 39141Y 10 3

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information

  • Great Western Minerals Group Ltd.
    Ron Malashewski
    Manager of Investor Relations
    (306) 659-4516
    Great Western Minerals Group Ltd.
    Mr. Jim Engdahl
    President and Chief Executive Officer
    (306) 659-4508
    Great Western Minerals Group Ltd.
    226 Cardinal Crescent
    Saskatoon, SK S7L 6H8