Greystar Resources Ltd.
TSX : GSL
AIM : GSL

Greystar Resources Ltd.

December 13, 2006 18:26 ET

Greystar Adds 420,000 Ounces of Gold Resources at Angostura

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Dec. 13, 2006) - Greystar Resources Ltd. ("Greystar") (TSX:GSL)(AIM:GSL) is pleased to report an update to the August 2006 Resource Study on its wholly-owned Angostura gold-silver deposit in northeastern Colombia has resulted in an increase in contained ounces of gold in the indicated mineral resource category, while continuing to increase in the overall gold grade of the deposit.

Highlights:

- Indicated mineral resource update at Angostura of 7.42 million ounces of gold with 32.97 million ounces of silver;

- Inferred mineral resource update at Angostura remained at 4.22 million ounces of gold with 17.71 million ounces of silver;

- Average gold grade increases to 1.33 g/t in the indicated mineral resource category and 1.62 g/t in the inferred mineral resource category;

- Updated mineral resource update includes the results from 573 drill holes totaling 187,902 meters of drilling;

- Updated resource will be utilized for the Scoping Study underway by Hatch and Associates, Vancouver.

"With the addition of such a large amount of new data, especially from the Veta de Barro East and La Alta areas of the deposit, we wanted the ongoing scoping study to reflect the most up to date information possible," said Greystar's Executive Vice President, Frederick Felder. "I also cannot stress enough the work load being placed on technical personnel ranging from analytical laboratories to consultants with consequent effects on delivery of the information. So in order to ensure that the Angostura data, including the most recent metallurgical information and more importantly the subsequent computations in the Scoping Study represent an accurate reflection of the deposit, the completion of the Scoping Study is now expected in February 2007."

The updated mineral resource estimate was completed in early December and includes data from an additional 26,192 meters of drilling since the August mineral resource study. The indicated resource now contains 7.42 million ounces of gold in 173.4 million tonnes of material grading 1.33 grams gold per tonne. This represents a 6.3% increase in contained ounces of gold, a 4.2% increase in tonnes and a 1.5% increase in the average gold grade in the indicated mineral resource over the August resource study. The contained ounces of gold in the inferred mineral resource remain the same at 4.2 million ounces as the tonnage dropped to 80.9 million tonnes from 83.3 million tonnes but the gold grade increased to 1.62 grams gold per tonne from 1.57 grams gold per tonne.

Greystar is also pleased to report that it has made significant progress in outlining drill targets outside of the Angostura deposit. Regional geochemical surveys have progressed in the Cuchilla Mongora area and over the Animas anomaly, which lies less than one kilometer from the Angostura deposit. This proximity to Angostura and the similar geology makes the Animas geochemical anomaly a top priority drill target. Greystar is planning to drill test the Animas anomaly, the Cuchilla Mongora area and the general Violetal area in 2007.

Greystar has also been awarded the 7 hectare concession No. GB3 091 in the Violetal area, while to the south, claim AJ5 142, comprising 4,061.1 hectares has been issued to Greystar. In the north of Santander Department, Greystar has been awarded License 343 covering an area of 600 hectares and the transaction on the Armenia claims has been completed with both surface and mineral rights deeded to Greystar.

"For the first time in roughly a decade, Greystar is positioned to aggressively test the regional targets on the large Angostura project," said Greystar President, David Rovig. "Exploration drilling in unison with the ongoing economic evaluation of the Angostura deposit will make for a very exciting 2007."



Angostura Resource Update as at December 6, 2006,
(cut off of 0.40 g/t Au for oxide and 0.55 g/t Au for sulfide)

--------------------------------------------------------------------
Indicated
--------------------------------------------------------------------
Gold Total Silver Total
Tonnes Grade Gold Grade Silver
(000,s) (g/t) (000,s oz) (g/t) (000,s oz)
--------------------------------------------------------------------
Oxide 42,077 1.13 1,526 7 8,976
--------------------------------------------------------------------
Sulfide 131,278 1.40 5,893 6 23,994
--------------------------------------------------------------------
Total 173,355 1.33 7,419 6 32,970
--------------------------------------------------------------------


--------------------------------------------------------------------
Inferred
--------------------------------------------------------------------
Gold Total Silver Total
Tonnes Grade Gold Grade Silver
(000,s) (g/t) (000,s oz) (g/t) (000,s oz)
--------------------------------------------------------------------
Oxide 13,342 1.39 596 7 2,931
--------------------------------------------------------------------
Sulfide 67,517 1.67 3,619 7 14,776
--------------------------------------------------------------------
Total 80,859 1.62 4,215 7 17,707
--------------------------------------------------------------------
Mineral resources that are not reserves do not have demonstrated
economic viability. An Inferred Mineral Resource is that part of a
mineral resource for which quantity and grade can be estimated on the
basis of geological evidence and limited sampling and reasonably assumed,
but not verified, geological and grade continuity. An Indicated Mineral
Resource is that part of a mineral resource for which quantity, grade or
quality, densities, shape and physical characteristics, can be estimated
with a level of confidence sufficient to allow the appropriate application
of technical and economic parameters, to support mine planning and
evaluation of the economic viability of the deposit.


Completed by Greystar staff, the December 2006 update included the data of 187,902 meters of diamond core drilling distributed in 573 holes completed up to the end of October. The reported global estimate has not been constrained by the consideration of mining recovery and dilution parameters, but it has been based on cut-off grades of 0.4 and 0.55 grams gold per tonne for oxide and sulfide resources, respectively, unchanged from past estimates.

As an in-house updated resource, the new results should be read with reference to the August 2006 NI 43-101 Technical Report which is available on SEDAR and contains disclosures required by ss.3.3(1), 3.3(2) and 3.4(d) of 43-101.

Geological

The Angostura deposit is characterized by a multitude of mineralized structures with fairly continuous gold distribution at a grade of 0.5 to 1.5 gram gold per tonne. A relatively small volume of higher-grade mineralization occurs at structurally favorable sites within the lower-grade material. While the higher-grade component makes up a relatively small volume of the mineralization, it does contain a relatively large amount of the gold mineralization. Since these two mineralization types have different continuities, appropriate estimation parameters were applied to each. For the higher-grade structures, a critical evaluation was completed on an individual basis. A probability method was then used to model the distribution of the high-grade mineralization and to estimate its tonnage. This approach appears to have resulted in a realistic definition of the geometry and grade of the overall structures, including the low-grade and the high-grade assay populations.

Estimation Parameters

The December 2006 resource update is based on an updated 3D geological and mineral model, and includes all of the technical data available as of October 2006, including 117,813 core assays from 187,902 meters of drilling in 573 holes and 1,115 muck samples from the Perezosa 2 exploration tunnels and crosscut. The resource model also includes a total of nearly 3,400 specific gravity measurements. This is of considerable importance as higher-grade mineralization can have from 10 and 15% higher densities.

The December 2006 resource update used 4,108 vein intercepts and over 195 individual structures, all modeled to satisfy a minimum mining width of five metres. Thirteen high-grade zones based on 600 channel samples in near surface tunnels were restricted to the width of the tunnels and were wire framed accordingly. Surface channel samples were used to provide geological information for continuity but the gold grades were not used in the model.

All gold assay data was split into two populations, high-grade and low-grade, generally using a threshold of 5 g/t gold. The high-grade population was composited to intervals of 1.25 metres, while the low-grade population was composited at intervals of 10 metres in the veins, and 5 metres for the areas of dissemination (outside of the veins). Grade capping was applied to the composites. Capping levels for the high-grade population were 60 g/t gold for the clouds in the Veta de Barro area, and 45 g/t gold for the Veta de Barro area veins and 65 g/t gold for rest of the veins. The low-grade composites were capped at 4.7 g/t gold for the veins outside of the Veta de Barro area and for the disseminated populations.

The block model uses minimum subcells of 1.25 m and maximum subcells of 5 m. Search distances for the probability and grade interpolation are supported by variography results. The probability of a block to contain high-grade mineralization was interpolated using an indicator approach which applied a floating ellipsoid with radii of 15 m x 5 m x 15 m in the veins of Veta de Barro area, a search ellipsoid of 27.5 m x 5 m x 27.5 m in the veins elsewhere in the deposit and an ellipsoid of 27.5 m x 2 m x 27.5 m in the two bulk structures. As a result of the probability interpolation, each block contains an estimate of the volume of high-grade and of the volume of low-grade mineralization.

The grade interpolation was undertaken weighing the grade information by the inverse of the square of its distance to the block being estimated (ID2). In a first interpolation step, the low-grade material in each block was interpolated from surrounding low-grade composites using a 55 m spherical ellipse inside the veins, a 55 m x 12.5 m x 55 m floating ellipse in the clouds, and a 55 m sphere for the disseminated mineralization. For the tunnel wireframes a maximum of 30 metre sphere was used, respecting the width of the wireframes. The grade of the high-grade material in each block was interpolated from surrounding high-grade composites using the same search ellipsoids as were used for the probability interpolation.

A second grade interpolation step followed for which the ellipsoid axes were doubled. Blocks beyond the reach of this larger search were not estimated.

There is a positive relationship between sulphur and gold and sulphur and specific gravity which allows the upward adjustment of the bulk density with increasing gold grade in the fresh and partially oxidized rocks at Angostura. This adjustment is taken into account when converting the high-grade and low-grade volumes in each block into high-grade and low-grade tonnages. The overall grade for the block is the weighted average grade of the two individual tonnages.

The probability and grade estimates were undertaken individually for every vein, cloud and for the disseminated mineralization outside of the veins. Blocks interpolated with the shorter ellipsoid axes were assigned the indicated resource classification, those that were interpolated in the second step were placed in the inferred category. In those cases where the classification of the high-grade tonnage in a block was different from that of the low-grade tonnage, the classification with the majority of contained gold was chosen. The geostatistical analysis, geological interpretation, sample spacing and block validation of the data, support the classification of the resources.

The December 6, 2006 resource update was prepared by Greystar staff. The in-house qualified person for the resource update is Frederick Felder, P.Geo.

REVIEW BY QUALIFIED PERSON, QUALITY CONTROL AND REPORTS

The results of the Company's drilling program have been reviewed, verified (including sampling, analytical and test data) and compiled by the Company's geological staff (which includes a qualified person, Frederick Felder, P.Geo., for the purpose of National Instrument 43-101, and Guidance Note for Mining, Oil and Gas Companies issued by the London Stock Exchange in respect of AIM companies, which outline standards of disclosure for mineral projects). Frederick Felder, P.Geo., has over 30 years of mineral exploration experience, is a member in good standing with the Association of Professional Engineers and Geoscientists of British Columbia and is the qualified person responsible for this release.

The Company has implemented a quality control program to ensure sampling and analysis of all exploration work is conducted in accordance with the best possible practices. Under these quality assurance measures, drill core is sawn in halves with one half of the core prepped on site and samples shipped to ALS-Chemex Laboratory (ISO 9002 registered) in Vancouver, B.C. for analysis. The remainder of the core is retained for future assay verification. Gold analysis is conducted by fire assay (one assay tonne) using an atomic absorption finish. The laboratory re-assays using the ALS-Chemex protocol, and additional checks may be run on anomalous values. Greystar has independent re-analysis and sample preparation checks run at other accredited laboratories. The Company also introduces background blanks prepared from previously analyzed core samples from the Angostura Project.

Forward-Looking Statement

Certain statements included in this release are "forward-looking statements" within the meaning of Canadian securities legislation. Forward-looking statements include, among other things, statements regarding targets, estimates and assumptions in respect of gold prices, results, mineral resources and anticipated grades. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by the Company, are inherently subject to significant business, economic, competitive, political and social uncertainties and contingencies. Many factors could cause the Company's actual results to differ materially from those expressed or implied in any forward-looking statements made by, or on behalf of, the Company. Such factors include, among other things, risks relating to additional funding requirements, resource estimates, exploration, development and operating risks, limited experience with development-stage mining operations, dependence on one principal exploration stage property, political and foreign risk, uninsurable risks, competition, production risks, environmental regulation and liability, government regulation, currency fluctuations, potential title disputes and dependence on key employees as set out under the heading "Risk Factors" in the Annual Information Form of the Company dated March 30, 2006 which is available in SEDAR. Investors are cautioned that forward-looking statements are not guarantees of future performance and, accordingly, investors are cautioned not to put undue reliance on forward-looking statements due to the inherent uncertainty therein. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

All dollar amounts are in Canadian dollars, unless otherwise stated.

No Stock Exchange has reviewed or accepts responsibility for the adequacy or accuracy of this news release.

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