Hedman Resources Limited

Hedman Resources Limited

September 29, 2005 09:00 ET

Hedman Announces Critical Updates

TORONTO, ONTARIO--(CCNMatthews - Sept. 29, 2005) -

Progress Report received re: Phase Two of CRADA with U.S. Department of Energy

R & D progress identifies additional business opportunities resultant from fiberization

HEDMAN RESOURCES LIMITED (TSX VENTURE:HDM) announced today that it has received a Progress Report from the Albany Research Center ("ARC") of the United States Department of Energy ("US DOE") on its ongoing co-operative research and development partnership ("CRADA") for fiberization of Hedman's unique antigorite ore.

In a report dated September 22, 2005, prepared by William K. O'Connor, a chemical engineer at the ARC, and project manager, the following material highlights were noted:

"A total of 13 tests have been conducted to date for the Phase 2 program, with a total of 20 melting/fiberization tests conducted for both Phases 1 and 2 of the research program."

"This system (the Hedman fiberization system as designed) provides a proof-of-concept for the production of mineral wool from the Hedman ore."

"Raw materials selected as feedstock for the Hedman fiberization process need not be limited to the original Hedman antigorite ore...This could present opportunities for intellectual property at the conclusion of Phase 2 and/or during negotiations for Phase 3."

"Recycle of the shot product from the melting/fiberization process has been demonstrated."

"Both the forsterite shot and the Fe (iron) by-products could also present opportunities to be considered at the conclusion of Phase 2 or during negotiations for a Phase 3 research program."

The ARC has informed Hedman's management that Phase 2 should be concluded and Phase 3 negotiations fully underway before the end of 2005. Further, the ARC will furnish Hedman with samples of the fiberized ore from the final processing design line in approximately one month, so that Hedman can have independent laboratory tests conducted to verify the specifications and measurements established at the ARC. Those test results, coupled with the Invention Report we anticipate receiving from the ARC at the end of Phase 2, will allow Hedman to accelerate negotiations with prospective industry joint venture partners and in designing focused business models and finance budgets for the manufacture of bulk/sheet/roll fiber for wholesale distribution and/or the incorporation of its fiber into actual product lines.

"We are anxiously monitoring the progress being made at the ARC towards finalizing the Hedman fiberization system and concluding Phase 2," commented Stephen A. Edell, President and CEO. "We understand there has been a minor delay to our earlier predictions, but we would prefer that the ARC work comprehensively towards the maximum yield efficiencies of the fiber and its effective process design. Further, we are especially intrigued about the two new areas identified by the ARC in this Progress Report, namely, the possibility that the Hedman fiberization system could be supported by a wider range of feedstock (i.e. additional licensing and royalty opportunities post patent of our system) and the significant olivine and iron by-products of the Hedman process (e.g. applications in the steel industry). These further business potentials, coupled with the ARC's confirmation that the shot can be recycled effectively to increase fiber yield, are dramatic developments that more than justify the brief delay in completing Phase 2."

In a related development, Hedman announced that it has terminated the previously announced acquisition of serpentinite deposits in Keith Township in northern Ontario. Reinhard von Guttenberg of Strathcona Mineral Services, attended to an on-site inspection and sampling at the subject property in May of 2005. Thereafter, samples were subjected to various tests. Mr. Von Guttenberg reported to Hedman that all six of the random samples tested did not meet specific qualifications outlined in the acquisition agreement. As a result, Hedman served notice terminating the transaction and has received a full refund of its deposit funds from the vendors' solicitor.

"We regard the termination of the Keith acquisition as positive," stated David Berman, Chief Financial Officer. "This serves to reinforce our present understanding that our Horwood Lake antigorite deposits are truly unique and not demonstrated anywhere else in the world. Our continued monopoly on legally asbestos or chrysotile free serpentinite ore, bodes well for us in our continuing dealings with the US DOE and our emerging negotiations with prospective industry joint venture partners."

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