SOURCE: General Metals Corporation

October 18, 2010 10:27 ET

Open Letter to Shareholders and Investment Community by General Metals Corporation President Paul Wang

RENO, NV--(Marketwire - October 18, 2010) -  General Metals Corporation (the "Company") (OTCBB: GNMT) (FRANKFURT: GMQ), president, Paul Wang provides this open letter to our shareholders and investment community.

Dear Shareholders and Friends:

It is my honor to be appointed by the Board of Directors to serve as President of General Metals Corporation. The Company has positioned itself well to grow in the near future with the prospects of near term production coupled with very strong metal prices for both gold and silver. As an emerging, low cost, near term gold-silver producer in one of America's most productive gold districts, and with substantial potential for organic growth, the Company is in the enviable position of having an extremely well positioned mineral property with a significant existing resources, and which has potential to more than double by further exploring the ground we already hold. Few Companies can boast near term production and long term future growth potential all from the same property.

The Company is entering into a unique period of a strong run up in gold demand and pricing. It has been reported that gold-mining companies are accelerating new projects and scouring the globe with renewed vigor, seeking to take advantage of soaring prices.

Let us review some reasons why General Metals is now positioned to take advantage of the current world economic situation with its mining operations in an active gold mining area.

Our company is the proud owner of the "Independence Mine Project," comprised of 14 whole and fractional mining claims encompassing 240 acres of the Independence Mine, and 480 acres for heap leaching, tailing ponds, milling, mineral processing and storage situated in the Battle Mountain Mining District, Lander Country, Nevada. The Independence Mine has a history of producing gold and silver and is contiguous to active gold mining operations.

At our annual meeting in May 2010, we presented a draft of the completed Canadian National Instrument 43-101 report that we have since submitted to the Toronto Ventures Exchange. Although his report is not SEC Industry Guide 7 compliant it indicated that the shallow open pit minable deposits contains 210,400 gold and 3,990,500 silver ounces in the Measured and Indicated Category and 66,000 gold and 395,800 silver ounces in the Inferred Category.

For discussion of our Deep mining reserves please see our recently filed recent 10-Q.

At the London PM fix on October 11, 2010 of $1,351.50 per ounce for gold and $23.32 per ounce for silver, a deposit containing 230,000 ounces of gold equivalents would have a gross worth of more than $310,700,000.

In the last fiscal year ending April 30, 2010, we have:

  1. Completed 12,895 feet of drilling in 44 drill holes. This drilling program augmented our previous drilling in order to:
    1. upgrade all the Hill Zone gold-silver mineralization into measured and indicated categories,
    2. provide sufficient drill density to identify higher grade zones within the Hill Zone mineralization, and
    3. provide sufficient detail to facilitate pit design and detailed mine planning.
  1. Concluded the independent Quality Assurance - Quality Control (QA - QC) assessment on the drilling and assaying completed prior to April 30, 2009; thereby confirming that the reported results were accurate.
  1. Re-assayed previously drilled Noranda Exploration pulps from their 1984 - 1987 diamond core drilling program, and the Great Basin Gold Corp. 1998 drilling program, and completed the QA/QC on these re-assays for the major mineralized drill intercepts in the Independence Gold Skarn in the Independence Deep Target. The results correlate exceptionally well with original drill data and were consistently (an average four percent (4%)) higher than the original assays. 

    Through analysis and modeling of the Noranda and Great Basin Gold drilling in the Independence Gold Skarn system, we identified a target more than half a mile wide and three quarters of a mile long which contains three highly prospective structural / stratigraphic zones with an inferred resource containing approximately 970,000 ounces of gold.
  1. Completed the baseline environmental surveys recently including flora, fauna and bat studies. 
  1. Analyzed two bulk samples of surface oxide mineralization collected under the supervision of personnel from McClelland Laboratories Inc. (McClelland) of Sparks, Nevada for metallurgical testing including column leach tests at the Independence. Both the Hill Zone and Independence South Zone samples indicate excellent solution access regardless of size. Due to the exceptional recovery in the coarse fractions of the bottle rolls, we completed large diameter column leach tests at 2 and 6 inch sizes from the Independence Hill Zone which yielded greater than 90% gold extraction after a 140 day leach cycle. These test results suggest profitably on the high end of project economics.

  2. Received, a grant of water rights for portions of Sections 28 and 33 (T31N, R43E), in Lander County, NV, the proposed center of the Independence Mine's mining area. In addition, we were formally awarded water rights on the Company's 480 acre processing site which will be immediately available upon completion of a well.

These are just a few of the accomplishments in 2009 which will lead the company into gold and silver production. Our permitting has progressed, and drilling will continue to add valuable ounces to the resource, with the goal of term production.

Moving into 2011, we will continue to build upon the success we saw in 2010. We intend to move toward production with a likely date of 2011-2012 through:

1. proving up additional resources from the completed drilling program.
2. finalizing all metallurgical testing to provide the information necessary to receive approval in our plan of operations.
3. completing a pre-feasibility report.
4. developing the mine plan.
5. designing the heap leach and processing facilities.
6. commissioning an independent economic feasibility report.
7. confirming and documenting key strategic partnerships and alliances.

We are very grateful to our loyal investors who have stood by us through this difficult market, and it is our intent to make the Independence Mine Project into a profitable operation.

The company is currently working on a "Fast Ramp Up Production" or " Fast Track" program whereby we expect to shorten the lead time to production of gold and silver. All the details are not worked out but we will look to contract mining to accelerate the development of a open pit high grade ore target and the construction the first phase of a four phase expandable heap leach operation. We believe our current water permits are adequate for all expected production requirements including mine site dust suppression and leaching activities for all phases of the envisioned operation.

We are also encouraging the development of a following of stock mining analysts to evaluate our progress for potential international institutional investors.

I express my appreciation to General Metal's previous management and shareholders for their significant contributions to bringing the Independence Mining Project forward.

Paul Wang

President

Further details regarding the Independence mineralization, drilling efforts, both historical and current, together with current permitting activity are available on the Company's website www.generalmetalscorporation.com.

About General Metals Corporation: General Metals Corporation is an aggressive junior minerals exploration and development company, based in Reno, Nevada. The Company is actively exploring and developing its 100% controlled Independence property strategically located in the prolific and highly prospective Battle Mountain Mining District of Nevada.

Notice Regarding Forward-Looking Statements

This news release contains "forward-looking statements," as that term is defined in Section 27A of the United States Securities Act of 1933 and Section 21E of the Securities exchange Act of 1934. Statements in this press release which are not purely historical are forward-looking statements and include any statements regarding beliefs, plans, expectations or intentions regarding the future. Such forward-looking statements include, among other things, that the proceeds from the recent private placement will allow the Company to proceed with permitting at its Independence Mine in Nevada or any shallow mining production later this year, that any estimated ounces of gold or silver are contained in the mineralized material in the "Shallow Target," and is proposed to be mined and loaded onto a cyanide heap leach pad, or any future financings that the Company may enter into.

Actual results could differ from those projected in any forward-looking statements due to numerous factors. Such factors include, among others, the inherent uncertainties associated with mineral exploration. We are not in control of metals prices and these could vary to make development uneconomic. These forward-looking statements are made as of the date of this news release, and we assume no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those projected in the forward-looking statements. Although we believe that the beliefs, plans, expectations and intentions contained in this press release are reasonable, there can be no assurance that such beliefs, plans, expectations or intentions will prove to be accurate. Investors should consult all of the information set forth herein and should also refer to the risk factors disclosure outlined in our annual report on Form 10-KSB for the most recent fiscal year, our quarterly reports on Form 10-QSB and other periodic reports filed from time-to-time with the Securities and Exchange Commission.

Contact Information

  • Contact:
    Wayne Meyerson
    Investor Relations
    General Metals Corporation
    615 Sierra Rose Dr. Suite 1
    Reno, NV 89511
    wayne@gnmtlive.com
    775.583.4636 office