Greystar Resources Ltd.
TSX : GSL
AIM : GSL

Greystar Resources Ltd.

December 19, 2007 02:00 ET

Greystar Upgrades Angostura Resource to 10.15 Million Ounces Measured Plus Indicated

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Dec. 19, 2007) - Greystar Resources Ltd. ("Greystar") (TSX:GSL)(AIM:GSL) is pleased to report a significant increase and upgrade to the resource estimates for its wholly-owned Angostura gold deposit in northeastern Colombia.

HIGHLIGHTS



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Contained Contained Au Ag
Resource Category Au (1,000) Ag (1,000) (g/t) (g/t)
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Measured 2,247 12,077 0.79 4
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Indicated 7,905 37,764 1.69 8
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Inferred 3,430 18,284 1.37 7
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- Measured and Indicated mineral resource estimate of 10.15 million ounces of gold and 49.84 million ounces of silver, up 37% over the December 2006 indicated gold resource estimate and now represents 75% of the total gold in the mineral resources;

- In the oxide zone the gold contained in measured plus indicated categories showed a 30% increase compared to the December 2006 estimate;

- Average gold grade of 1.35 g/t in the measured plus indicated category and 1.37 g/t in the inferred category;

- New resource estimate includes the results from 717 drill holes totalling 244,443 metres of drilling, with 144 holes and 56,541 metres having been added in the last twelve months.

"This new resource estimate continues to show the expansion potential of the very large Angostura deposit," said Greystar's Executive Vice President Frederick Felder, P. Geo. "The addition of measured resource estimates marks a milestone for the project and Greystar's exploration team will focus on further expansion and upgrades at Angostura, with particular attention to lowering the waste rock ratio and examining a staged production scenario starting with the oxide mineralization and transitioning into the sulphide material all leading to a feasibility study starting in 2008."



Angostura Gold and Silver Resources

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Measured Mineral Resources
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Tonnes
(1,000) Au (g/t) Au (oz, 1,000) Ag (g/t)
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Oxides 29,257 0.66 620 5
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Sulfides 59,237 0.85 1,627 4
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TOTAL 88,494 0.79 2,247 4
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Indicated Mineral Resources
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Tonnes
(1,000) Au (g/t) Au (oz, 1,000) Ag (g/t)
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Oxides 28,694 1.48 1,366 8
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Sulfides 117,132 1.74 6,539 8
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TOTAL 145,826 1.69 7,905 8
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Measured & Indicated Mineral Resources
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Tonnes
(1,000) Au (g/t) Au (oz, 1,000) Ag (g/t)
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Oxides 57,951 1.07 1,986 6
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Sulfides 176,369 1.44 8,166 7
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TOTAL 234,320 1.35 10,152 7
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Inferred Mineral Resources
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Tonnes
(1,000) Au (g/t) Au (oz, 1,000) Ag (g/t)
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Oxides 6,671 1.56 335 10
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Sulfides 71,027 1.36 3,096 7
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TOTAL 77,698 1.37 3,430 7
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NOTE: 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 headed by Ing. Giovanny Ortiz, Greystar's Datamine specialist and the services of Mining Engineer consultant, Elmer Idelfonso, a Lima-based geostatistician, under the overall supervision and input of consulting company Strathcona Mineral Services Limited of Toronto ("Strathcona"), the current estimate includes the data of 244,443 metres of diamond core drilling distributed in 717 holes drilled up to the end of October 2007. Also included are the results from the 25 metre spaced underground horizontal drill program that was designed to better define in detail a core area of the deposit. We now estimate that the Angostura deposit contains 2.2 million ounces of measured and 7.9 million ounces of indicated gold along with 12 million ounces of measured and 38 million ounces of indicated silver contained in 234 million tonnes in both categories grading 1.35 grams gold per tonne and 7.3 grams silver per tonne. In addition, another 3.4 million ounces of gold and 18 million ounces of silver are estimated within an inferred resource of 77.7 million tonnes grading 1.37 grams gold per tonne and 7 grams silver per tonne.

The inclusion of a measured resource category is a new development and is justified by the large amount of drill and other information resulting in a higher level of confidence in a portion of what was previously indicated resources, based on a relatively greater number of drill hole intercepts. 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 0.40 and 0.55 g/t gold for oxide and sulfide resources, respectively, unchanged from past estimates.

Estimation Parameters

The December 2007 resource study is based on an updated 3D geological and mineral model, and includes all of the technical data available as of November 2007, including core assays from 244,443 metres of drilling and 1,464 muck samples from the Perezosa exploration tunnels and crosscuts. The resource model also includes a total of nearly 6,386 specific gravity measurements. This is of considerable importance as higher-grade mineralization on average has from 10 and 15% higher densities.

In contrast to previous models, where the interpreted veins or vein systems were labelled individually and wire-framed, the current model has used the wireframe solely for the purpose of creating structural trend surfaces that follow the interpreted veins throughout the deposit. The trend surfaces guide the direction of the three axes of the search ellipsoid used for grade interpolation on a local scale and assure that the geological influence on the grade interpolation is preserved. This more open concept of grade interpolation allows some of the grade information surrounding the interpreted veins to be incorporated into the information used for grade interpolation. As a result, "disseminated" mineralization is no longer included in the new estimate as a separate line item.

All gold assay data was split into two populations, high-grade and low-grade, generally using a threshold of 5 g/t gold. Both populations were composited to intervals of 1.25 metres, and grade capping was applied to the composites. Capping levels for the high-grade population were 90 g/t for the Veta de Barro Este area, no capping was used for the Veta de Barro Oeste area, and 65 g/t gold for the central area. The low-grade composites were capped at 3.7 g/t gold for Veta de Barro Oeste area, 4.1 g/t gold for the Veta de Barro Este and 3.8 g/t for the central area. The capped 1.25-metre composites were re-composited to five metres for grade interpolation of the low-grade population, while the capped 1.25-metre composites were re-composited to ten metres for the grade interpolation of the high-grade population.

The block model uses minimum subcells of 2.5 metres and maximum cells of 5 metres. 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 developed for six different domains. The probability interpolation used an inverse distance to the twelfth (ID12) power to minimize undue grade projection. 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 the 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 ellipses for the first search with a radius between 50 to 75 metres in strike and dip, depending on the domain, and a fixed 5 metres for cross strike in both searches. 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. To avoid over estimating of high grade, a 30-metres radius was used to restrict the impact of the high grade.

To illustrate the impact of dilution expected during open-pit mining, the resource blocks were subjected to re-blocking into larger, ten-metre blocks instead of the five metre blocks used in the undiluted resource estimate. Re-blocking resulted in measured and indicated resources of 242.7 million tonnes containing 9.4 million ounces at grades of 1.21 g/t Au and 6 g/t Ag. This compares to 173.4 million tonnes containing 7.4 million ounces of Au with a grade of 1.3 g/t Au and 6 g/t Ag obtained in the December 2006 estimate that was employed in the scoping study prepared by Hatch in July of this year. This is an increase of 27%. The amount of gold contained in the inferred resource category was reduced by 31% from 4.2 million ounces to 2.9 million ounces. Of particular significance is that in the current resource estimate the proportion of measured and indicated resources make up 88% and 86% of the total re-blocked resource tonnage and ounces respectively within the pit design established in the scoping study. By comparison in the 2006 scoping study the indicated resources within the pit were 66% and 67% for the tonnes and ounces respectively.



Angostura Gold and Silver Resources, After Re-Blocking

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Measured and Indicated
Mineral Resources Inferred Mineral Resources
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Tonnes Au Au (oz, Ag Tonnes Au Au (oz, Ag
(1,000) (g/t) 1,000) (g/t) (1,000) (g/t) 1,000) (g/t)
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Oxides 60,505 0.98 1,898 6 8,194 1.20 315 9
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Sulfides 182,176 1.29 7,534 6 70,073 1.15 2,600 6
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TOTAL 242,681 1.21 9,433 6 78,267 1.16 2,915 6
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The average depth (vertical) of the drilling is from 270 to 300 metres to 430 - 480 metres. The more shallow coverage is in the peripheral areas such as Los Laches, La Alta East, the southern limits of El Silencio, Veta de Barro, whereas in the central part of the deposit greater depths have been tested from underground.

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 the Strathcona Technical Report dated August 30, 2006.

Glossary of Key Terms

Block Model - The sub-division of a mineral deposit into a regular, three-dimensional grid of blocks. The grade of each block is estimated from a set of nearby sample values.

Contained Ounces, Contained Gold - Represents ounces in the ore before losses during the applicable metallurgical process.

Cut-off Grade - The minimum grade at which a unit of ore will be mined or treated. At the cut-off grade, the value is equal to the costs associated with mining and/or treating the unit of ore.

Dilution - The effect of waste or low-grade material which is unavoidably included in the mined ore, lowering the mining grade.

Grade - The amount of metal in each ton of ore, expressed as grams per tonne for precious metals (or as troy ounces per short ton in the imperial system), and as a percentage for most other metals.

Mineral Resource - A mineral resource is a concentration or occurrence of natural, solid, inorganic or fossilized organic material in or on the Earth's crust in such form and quantity and of such a grade or quality that it has reasonable prospects for economic extraction. The location, quantity, grade, geological characteristics and continuity of a mineral resource are known, estimated or interpreted from specific geological evidence and knowledge. Mineral resources are sub-divided, in order of increasing geological confidence, into inferred, indicated and measured categories.

Inferred Mineral Resources - An inferred mineral resource is that part of a mineral resource for which quantity and grade or quality can be estimated on the basis of geological evidence, limited sampling and reasonably assumed but not verified geological and grade continuity. The estimate is based on limited information and sampling gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes.

Indicated Mineral Resource - 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. The estimate is based on detailed and reliable exploration and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough for geological and grade continuity to be reasonably assumed.

Measured Mineral Resources - A measured mineral resource is that part of a mineral resource for which quantity, grade or quality, densities, shape and physical characteristics are so well established that they can be estimated with confidence sufficient to allow the appropriate application of technical and economic parameters, to support production planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration, sampling and testing information gathered through appropriate techniques from location such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough to confirm both geological and grade continuity.

Mineral resources, which are not mineral reserves, do not have demonstrated economic viability.

Stripping/Strip Ratio - The dimensionless ratio of waste to ore in an open pit. Usually expressed as tonnes/tonnes, but sometimes as bench cubic metres (bcm)/tonnes or bcm/bcm.

Tonne - Equal to 1,000 kilograms.

Underground - A mine where the minerals are explored or mined entirely from tunnels, shafts or drifts.

REVIEW BY QUALIFIED PERSON, QUALITY CONTROL AND REPORTS

The 2007 resource estimate was prepared by Greystar staff and the outside geostatistician under the oversight of Henrik Thalenhorst, P. Geo. of Strathcona, an independent qualified person as defined by National Instrument 43-101. The standard of reporting is NI 43-101 compliant and a technical report detailing the resource estimate will be filed on SEDAR within 45 days.

The results of this press release have been reviewed and verified by Frederick Felder, P.Geo., a qualified person 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 outlines 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.

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, 2007 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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