Great Western Minerals Group Ltd.

Great Western Minerals Group Ltd.

March 27, 2008 02:01 ET

Great Western Minerals Group Updates Progress on Preliminary Economic Assessment Report

SASKATOON, SASKATCHEWAN--(Marketwire - March 27, 2008) - Great Western Minerals Group Ltd. ("GWMG" or the "Company") (TSX VENTURE:GWG)(PINK SHEETS:GWMGF) is pleased to provide an update on the progress of the Preliminary Economic Assessment Report ("PEAR") for its Hoidas Lake Rare-Earth-Elements ("REE") Project in northern Saskatchewan.

This report is being prepared by Wardrop Engineering in conjunction with work by Melis Engineering Ltd. and SGS Lakefield Research. The objective is to assess the economics of the Hoidas Lake REE project under a number of different mining, milling, and processing options to identify the optimal, most cost-effective option.

The original concept for the mine and mill was for a 500 tonne-per-day (tpd) operation with processing facilities at Hoidas Lake, or at a nearby community. The proposed mine would be developed as an underground trackless operation with a ramp access from surface. The initial concept for the leaching plant process was based on crushing, whole-ore leaching, solvent extraction and production of a mixed REE-carbonate concentrate.

An optimized metallurgical process is the key to any profitable mining operation. GWMG and its consultants continue to develop the process to extract REE from the allanite and apatite host rock since there are no mines currently in operation that can be used as a model for the particular mineral assemblage at Hoidas Lake. So far, the results have been very positive, with several significant breakthroughs that are expected to enhance the economics of the project.

The purchase and handling of acid contribute some of the highest operating costs associated with such a mining project. Major savings can be realized by significantly reducing the volume of acid required. As previously reported, the use of optical sorting technology could eliminate up to 40% of the rock as waste and therefore also reduce acid consumption by similar proportions. In addition, using a finer grind of ore, and introducing a flotation stage in the metallurgical process could further, and significantly, reduce the use of acid.

Initial indications are that the use of sulphuric acid is more effective than hydrochloric acid. Sulphuric acid is in short supply globally; therefore, adding a sulphuric acid production facility on site (similar to existing uranium operations in the area) is also being examined and will be incorporated into the final report. This could significantly reduce the costs of purchasing and transporting the acid. In addition, the heat generated from the production of sulphuric acid can be used to generate electricity and significantly reduce operating costs.

Once the metallurgy is optimized, then the final costs of power, transportation, and other necessary infrastructure to support a profitable mining operation can be incorporated into a final report.

The host rock at Hoidas Lake has a high apatite-phosphate content. With phosphate prices having tripled to around $1,000 per tonne since the report was initiated, the potential for producing a phosphate byproduct will also be further examined and incorporated into the final report.

GWMG is aware of the accelerating global demand for REE and the tighter timeframe to bring this project into production and continues with additional work to aggressively move this project forward.

As announced previously, the company commenced a winter drill program at the Hoidas Lake project with the objective of doubling the resource on the entire property to a level that could support an operation beyond the current 500 tpd base case. Over 5,200 m of drilling has now been completed in 23 holes. If favourable weather conditions persist, field work is expected to be completed by the end of April with assays anticipated in late summer.

Much of the data needed to complete the report must be provided by third-party consultants and external lab facilities which remain under heavy workloads. The principal consultant on this project now has staff based in Saskatoon, and this arrangement now facilitates more direct and effective communication between the consultants and GWMG. The Company is also investigating the use of other accredited lab facilities in North America which may be able accelerate some of the necessary testing and decrease the wait times for the results.

Jim Engdahl, President and CEO of Great Western Minerals Group says, "We are all anxious to have a final report. We recognize that there is still a lot of work to be done, but we will continue to confidently move forward. We are also very excited about the advances that we have made with regard to metallurgy, and the tremendous cost saving that these advances can realize for us."

Engdahl, adds, "We appreciate the patience and support of our shareholders and we will continue to do what we can to encourage the completion of this report and ensure that all of the reasonable and economic alternatives are considered."

Jim Engdahl, President

About Great Western Minerals Group: 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.

Inquiries by direct mail should be addressed to Great Western Minerals Group Ltd., 226 Cardinal Crescent, Saskatoon, SK S7L 6H8.

Cautionary Statement on Forward-Looking Information: Certain information set out in this News Release constitutes forward-looking information. Forward-looking statements are based upon the opinions, expectations and estimates of management 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
    Great Western Minerals Group Ltd.
    226 Cardinal Crescent
    Saskatoon, SK S7L 6H8