Greystar Resources Ltd.

Greystar Resources Ltd.

August 16, 2005 17:35 ET

Greystar Reports a New Mineral Resource Estimate

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Aug. 16, 2005) - Greystar Resources Ltd (TSX:GSL)(AIM:GSL) is pleased to report that a new, independently-directed mineral resource estimate has increased the indicated gold resources by 69.3 % and substantially expanded the overall contained ounces of gold on its wholly-owned Angostura property in northeastern Colombia.


- Indicated resource estimate at Angostura of 5.83 million ounces of gold with 24.6 million ounces of silver.

- Inferred resource estimate at Angostura of 4.47 million ounces of gold with 21.5 million ounces of silver.

"The continued success of our 2005 drilling program has not only upgraded a significant portion of the Angostura deposit's mineral resource to the indicated classification but also discovered additional resources that increased the overall contained ounces of gold," says Greystar's Executive Vice-President, Frederick Felder. "And the deposit remains open in all directions indicating the potential for further increases is favorable."

Angostura Resource Estimate as at August 2005,
(cut off of 0.4 g/t Au for Oxide and 0.55 g/t for Sulfide)

Indicated Inferred
Total Total
Gold Gold Silver Gold Gold Silver
Tonnes Grade (000,s Grade Tonnes Grade (000,s Grade
(000,s) (g/t) oz) (g/t) (000,s) (g/t) oz) (g/t)
Oxide 33,444 1.15 1,239 6.56 14,589 1.09 512 6.11
Sulfide 114,699 1.25 4,594 4.77 108,735 1.13 3,959 5.33
Total 148,143 1.22 5,833 5.17 123,324 1.13 4,471 5.42

(iii)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 and the international engineering firm, Snowden Mining Industry Consultants Inc., the August 2005 study estimates that the Angostura deposit contains 5.83 million ounces of gold and 24.6 million ounces of silver within an indicated resource of 148.14 million tonnes grading 1.22 grams gold per tonne and 5.17 grams silver per tonne, plus another 4.47 million ounces of gold and 21.5 million ounces of silver within an inferred resource of 123.3 million tonnes grading 1.13 grams gold per tonne and 5.42 grams silver per tonne.

The August 2005 study marks a 70% increase in tonnage but more importantly a 69.3% increase in contained ounces of gold and a 70% increase in contained ounces of silver in the indicated category, when compared with the March 2005 mineral resource estimate of 87.26 million tonnes grading 1.23 grams gold per tonne and 5.2 grams silver per tonne for 3.445 million contained ounces of gold and 14.5 million contained ounces of silver.

The reported global estimate has not been constrained by the consideration of any mining, metallurgical or economic parameters.

The modest decrease in grade is the result of a redefinition of the higher-grade shoots in response to a better understanding of the deposit geology, resulting in a more constrained model for the higher grade shoots, and the extension of the previously known mineralization. Resource calculations are based on a 0.4 gm Au/t cut off grade for oxide resources and 0.55 gm Au/t for sulfide resources. The increase in tonnage and contained ounces has resulted from the drilling data collected during the 2005 program, which has extended the previously known mineralization.

Greystar is especially pleased by the results, which continue to show that the Angostura gold deposit represents a very large, near surface mineralized system that appears suitable for a bulk tonnage, open pit mining operation. A Preliminary Assessment will be required to determine which mining method and economic parameters are applicable to the Angostura Mineral Resources. The 2005 program, which is budgeted at $12 million, is continuing with nine drill rigs on site and metallurgical test work ongoing.

Estimation Parameters

The August 2005 resource estimate is based on an updated 3D geologic and mineralization model that includes all of the technical data available at June, 2005, the effective date of the study, including core assay results from 111,328 metres of drilling in 366 holes, along with the sampling of an additional 385 metres in the Perezosa tunnel and crosscut.

In total, the study used 2,986 vein intercepts, compared to the 2,592 used in March 2005, with over 145 individual vein structures and 65 ore shoots being identified. Each of the vein structures and ore shoots was labeled and wire-framed using the Datamine software.

All intersections within a vein or vein system were composited at intervals of 2 metres. This information was then used to construct longitudinal sections for those veins in Datamine with sufficient information to warrant such a step. The block grade estimates for the Angostura deposit were interpolated into a block model using a basic cell size of 30 m x 15 m x 10 m, selected to minimize conditional bias in the estimate. For the veins, shoots and disseminated mineralization collectively, appropriate grade capping was applied for each population type. The resource estimates were done using Ordinary Kriging method for each of the three styles of mineralization. Gold, silver and copper grades were interpolated into the blocks of each individual vein or shoot. Search distances during the grade interpolation are supported by domain variography results.

Classification of the resource is based on the geological interpretation and on the geostatistical characteristics of the gold data, sample spacing, and validation of the estimate against the data used to inform it.

The potential impact on the mineral resource estimate of environmental, permitting, legal, title, taxation, socio-political, marketing or other relevant issues has been previously discussed in Strathcona Mineral Services' August 27, 2004 Technical Report.

The August 2005 resource estimate was reported by Snowden Mining Industry Consultants Inc. Perth Office, under the direction of Michael Andrew BSc, MAUSIMM and Neil Burns, M.Sc., P.Geo., an independent qualified person as defined by National Instrument 43-101, who has audited the geological interpretation, sampling methods and analytical results on which the estimate is based. A technical report detailing the resource estimate will be filed on SEDAR within 30 days.

Forward Looking Statement

Some statements in this report contain forward-looking information. These statements address future events and conditions and, as such, involve inherent risks and uncertainties. Actual results could be significantly different from those projected.

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.

Contact Information