Western Prospector Group Ltd.
TSX VENTURE : WNP

Western Prospector Group Ltd.

April 10, 2006 13:12 ET

Western Prospector Files Defence in Lawsuit for Protection of its Mongolian Interests

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - April 10, 2006) - On April 7, 2006, Western Prospector Group Ltd. ("Western Prospector") (TSX VENTURE:WNP) filed its Statement of Defence to the Statement of Claim issued in connection with the lawsuit commenced on March 2, 2006 by Maximum Ventures Inc. ("Maximum") and described in Western Prospector's news release of March 3, 2006.

"Western Prospector's Statement of Defence categorically denies and refutes the allegations in Maximum's Statement of Claim in a manner which clearly establishes that Western Prospector is the legal and beneficial owner of a 100% interest in all of the Mongolian properties in dispute," commented John Brock, President and CEO of Western Prospector. "We have no doubt that all of Western Prospector's ownership rights will be confirmed and, accordingly, the lawsuit, as it relates to us, will be dismissed, with costs, especially given the fundamentally unfair way in which Maximum, and its business associate, Anthony Beruschi, have conducted the matter."

The highlights of the Statement of Defence and Western Prospector's position regarding the lawsuit and other matters related to the litigation include the following:

- Western Prospector provides fundamental and independent support for its position that Western Prospector owns 100% of the Mongolian properties, in dispute, and that the allegations made by Maximum against Western Prospector are without foundation or merit.

- Western Prospector relies on prior written representations made by Maximum contained in executed agreements entered into by Maximum with the defendant Brant. Maximum directly acknowledged to Brant, in writing, that Brant had the full right to sell the Mongolian properties identified in Schedule "A" to the Statement of Claim to any third party without providing Maximum any notice, right of first refusal or other advice and without liability to Maximum.

- In acquiring Mongolian properties from the vendor Brant, Western Prospector conducted detailed due diligence of all available documentation, including Mongolian government title registration documents and previous agreements between Brant and Maximum. The documentation affirmed and was consistent with Brant's representations and warranties that Brant was the legal and beneficial owner of the Mongolian properties and that Brant had the right to transact business with Western Prospector, there being no record of any interest held by either Maximum or Anthony Beruschi ("Beruschi").

- In the Statement of Claim, Maximum alleges that commencing in 2002, Maximum entered into four agreements and that Beruschi entered into two partnership agreements, all with Brant or the de Graaf defendants. None of the alleged agreements with Maximum were publicly disclosed by Maximum as required by law, yet importantly, all of the alleged agreements are inconsistent with the public filings which were made on behalf of Maximum, by its law firm Beruschi & Company. Further, nothing contained in Maximum's public filings is inconsistent with Western Prospector's position regarding ownership.

- During the two year period commencing with Western Prospector's public announcement in March 2004 of its agreement with Brant to acquire Mongolian properties and ending when the Statement of Claim was filed on March 2, 2006, neither Maximum nor Beruschi notified Western Prospector of the alleged agreements with Brant, or with the de Graaf defendants, or challenged Western Prospector's ownership of any Mongolian properties.

- In the Statement of Claim, Maximum alleges an assignment from Beruschi of any rights Beruschi had to sue the defendants. According to Maximum's news release of March 2, 2006, Beruschi received as consideration for the assignment, 30% of Maximum's interest, if any, in the disputed properties, carried to feasibility study, exclusive uranium marketing rights and a 2% net smelter royalty. Beruschi asserts no rights to any of Western Prospector's Mongolian properties, other than through Maximum, and no independent lawsuit by Beruschi is advanced in the Statement of Claim.

John Brock said, "Maximum and Beruschi failed to contact us and knowingly stood by while Western Prospector proceeded with property acquisitions under its Mongolian OEX Project, successfully completed public financings of more than $50 million and incurred exploration expenditures of approximately $9.5 million, all of which were publicly announced, in advance, by Western Prospector. Maximum and Beruschi are, as a result of such fundamentally unfair conduct, prevented by legal and equitable principles, including the doctrine of "estoppel", from now claiming any interest in Western Prospector's Mongolian properties. Accordingly, we fully expect confirmation of our ownership of 100% of the Mongolian properties and dismissal of the lawsuit as it relates to Western Prospector. We further expect costs to be awarded against Maximum, not only because of the conduct of Maximum and Beruschi, but because Maximum's allegations are not supported by the facts or in law."

Brock further stated, "The manner and timing of publication by Maximum and Beruschi of the particulars of the lawsuit were calculated to cause Western Prospector public embarrassment, attendant loss of market capitalization and credibility with our shareholders, as well as with the investment community generally. Under these circumstances, Western Prospector has requested in its Statement of Defence that the Supreme Court of British Columbia consider Maximum's conduct of this matter deserving of rebuke."

Western Prospector's Statement of Defence and Maximum's Statement of Claim filed with the Supreme Court of British Columbia are available for viewing on Western Prospector's website: www.westernprospector.com. The other defendants involved in the litigation, including the de Graaf defendants and Brant, have advised Western Prospector that they will be filing a Statement of Defence in due course.

John S. Brock, President & CEO

This release includes certain statements that may be deemed "forward-looking statements". All statements in this release, other than statements of historical facts, that relate to Western Prospector's expectations regarding the outcome of the litigation and events or developments that Western Prospector expects to occur, are forward-looking statements. Such statements are identified in this release by the use of words such as "will" and "expected" as well as the use of the future or conditional tense. Although Western Prospector believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements. Factors that could cause actual results to differ materially from those in forward-looking statements include risks associated with litigation and other risk factors generally set forth in Western Prospector's public filings. Investors are cautioned that any such statements are not guarantees of future performance and actual results or developments may differ materially from those projected in the forward-looking statements. Western Prospector does not assume any obligation to update or revise its forward-looking statements, whether as a result of new information, future events or otherwise.


The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

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