Great Western Minerals Group Ltd.
TSX VENTURE : GWG
PINK SHEETS : GWMGF

Great Western Minerals Group Ltd.

February 25, 2008 11:27 ET

Great Western Minerals Group Updates Activities

SASKATOON, SASKATCHEWAN--(Marketwire - Feb. 25, 2008) - Great Western Minerals Group Ltd. (TSX VENTURE:GWG) (PINK SHEETS:GWMGF) ("GWMG" or the "Company") is pleased to provide an update of its "mine-to-market" strategy to become a fully integrated explorer and developer of rare earth elements ("REE'") and other strategic metals in North America.

General Industry Developments: The world demand for REE continues to accelerate. Based on discussions and presentations at the International Rare Earth Conference held in Hong Kong in November 2007, the global demand for REE is projected to exceed 190,000 tonnes by 2012, for a projected global supply deficit of 20,000 tonnes. The projections do not consider the likelihood that Japan and the US will institute stockpiling to meet their internal demands. As well, these projections do not factor in development of new products or technologies such as RE magnetic refrigeration; the consensus is also that the demand for REE in Hybrid Vehicles is underestimated.

In October 2007, the U.S. Government issued a report on Minerals, Critical Minerals, and the U.S. Economy which designated Platinum Group Metals (PGM) and REE as the two top "critical metals" groups required for certain industries to remain economically viable. As well, these elements and metals are deemed to be critical by the US Department of Defense and to the defense industry overall. This report and other related industry reports are available from The National Academies Press (www.nap.edu).

In late December 2007, China, the primary global supplier of REE, announced an increase in export duties and tariffs on REE products, now at 15% to 25% on all REE products being exported from China. In addition to tariffs, China has also imposed restrictive export quotas.

Those factors provide compelling reasons for GWMG to move ahead with aggressive efforts to expand the resource base on its REE properties and to accelerate activities leading to production.

Successful Financing: In December 2007, GWMG completed two non-brokered private placements for total gross proceeds of $4.3 million. GWMG now has approximately $5.5 million in working capital which will be used for the drilling program underway at Hoidas Lake, completion of the Preliminary Economic Assessment Report ("PEAR"), the development of the pilot plant, and exploration and development activities on the Deep Sands project in Utah.

Hoidas Lake: In late January, drilling commenced at the Hoidas Lake project to test the zone along strike and at depth. The objective is to at least double the resource on the entire property to a level that could potentially support an operation beyond the current 500 tonne-per-day base case. Approximately 1,800 m of drilling has been completed over 8 holes to date. Field work is expected to be completed by the end of April with assays anticipated in late summer.

Phase 2 Metallurgy: Lakefield Research continues with Phase 2 metallurgical testing of the Hoidas Lake mineralization to develop the most cost-effective method for enhancing grades and minimizing costs in the processing and refining of the rare earth samples. Initial results, using state-of-the-art optical sorting technology, combined with a finer ore grind and a weaker acid-leach, have been very positive. Optical sorting results have indicated that 40% of the rock can be rejected before milling. This could significantly reduce the cost of transportation, reagents and energy required for processing. If the results of the additional tests confirm the initial investigation, the PEAR will be updated to reflect the process changes.

PEAR: The final report is still under development, and will incorporate the results of the current drilling and ongoing metallurgical tests, if applicable. The completion date depends upon timely access to lab facilities, availability of data, and the workload and schedules of the various consultants involved.

Pilot Plant: The objective of the pilot plant will be to demonstrate the operational viability of producing the final product, thus reducing technical and capital risk when designing a full-scale plant. The final design for the plant will incorporate the results of the current metallurgical tests, if applicable, as well as additional flotation and solvent extraction testing which is currently underway. The design and construction of the pilot plant will depend on the availability of facilities and results from ongoing bench-scale metallurgical testing.

Deep Sands Project, Utah: There are several activities underway on this project. Initial mineralogical analysis of the Deep Sands material has been completed and the final report is expected by mid-year. This information will be used to define the scope of future geological and metallurgical test programs.

An initial metallurgical testing program is underway to assess different methods of separating rare-earths from the non-valuable material, including screening, gravity, magnetic and electro-static techniques. Initial samples have been collected and will be sent to Xstrata Process Support for analysis. The final report on this program is expected in mid-2008.

GWMG has retained Pincock Allen & Holt (PAH) of Denver, CO as consultants to recommend the most effective methods of evaluating the property and the most effective technique to systematically drill test the property. GWMG has received the PAH preliminary report, and is currently evaluating the recommendations. In the meantime, the contract for drilling has been tendered and drilling is expected to begin by the end of April.

In addition, Titan Mining LLC, GWMG's partner on the Deep Sands project, has just completed over 2600 km of an airborne magnetometer and radiometric survey over the property to define the most prospective areas of heavy mineral concentration.

Great Western Technologies Inc (GWTI): Although initially established as an R&D facility, GWTI is a leading production facility in North America for rare earth materials, powders, custom vacuum-grade specialty alloys, and related value-added products used in the aerospace, automobile, industrial, computer, and hi-tech industries. Capable of operating as a mid-sized foundry, GWTI's ongoing strategy is to increase its customer base of high volume users of its specialized products which are in a position to utilize that level of production. GWTI also continues to investigate strategic partnerships and business relationships with other related facilities and end users. As a result of successful marketing efforts and follow-through contracts, the facility is now operating on two shifts. Additional information about Great Western Technologies can be found at www.greatwesterntech.com .

Other US Properties: As part of its focus on being a fully integrated REE enterprise, GWMG continues discussions with potential joint venture partners or optionors to take up the Company's non-core property assets, namely the Chuckwalla, Copper Hill and Crescent properties. Additional technical information on these properties is available at GWMG's corporate website.

Manager of Metallurgy: GWMG has added a specialist to its Saskatoon-based technical staff. In January, Dr. Baodong Zhao joined GWMG as the Manager of Metallurgy. Dr Zhao holds a PhD in Surface and Materials Electrochemistry from Queen's University and brings to GWMG extensive knowledge of metallurgy, materials science and physical chemistry from the Chinese and North American materials industry.

New Website: GWMG is also pleased to announce the launch of its new website. This site is much more dynamic than the previous one and will be kept current with news releases and developments within GWMG as well as developments in the rare earth sector.

Jim Engdahl, President and CEO of Great Western Minerals Group says, "Although the investment markets have not been kind to exploration companies over the last several months, our fundamentals and cash position remain strong. We are pleased with the progress we have made, and we are particularly excited about the potential for the Company in view of the accelerated global demand for REE. The tightening of supply is a concern to many of the major, global end users of REE; as a result we have been in discussions with many of them about their needs for a future, stable supply."

Engdahl adds, "We will continue to look for strategic acquisition or merger opportunities that will assist GWMG in achieving our goals and creating significant shareholder value. The opportunities may mean adding more REE properties to our portfolio, or entering into strategic manufacturing or marketing partnerships which could play an important role in implementing our long-term strategy."

Great Western Minerals Group Ltd. is a Canadian based company exploring for, and developing, strategic metal resources in North America. Pursuing a vertically-integrated business model, the Company's wholly-owned subsidiary Great Western Technologies Inc., located in Troy, Michigan, produces a variety of specialty alloys for use in the battery, magnet and aerospace industries. These "designer" alloys include those containing copper, nickel, cobalt and the rare earth elements.

Jim Engdahl, President

Cautionary Statement on Forward-Looking Information: 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) are based upon the opinions, expectations and estimates of management of the Company 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. Readers are cautioned not to place undue reliance upon forward-looking information. Although the Company believes that the expectations reflected in the forward-looking statements set out in this press release or incorporated herein by reference are reasonable, it can give no assurance that such expectations will prove to have been correct.

CUSIP: 39141Y 10 3

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

Contact Information

  • Great Western Minerals Group Ltd.
    Ron Malashewski
    Manager of Investor Relations
    (306) 659-4500
    Email: info@gwmg.ca
    Website: www.gwmg.ca
    or
    Great Western Minerals Group Ltd.
    226 Cardinal Crescent
    Saskatoon, SK S7L 6H8