GULFSIDE MINERALS LTD. (TSX VENTURE: GMG) ("Gulfside" or the
"Company") is issuing the following news release to update our
disclosure relating to the Erdenetsogt Coal Property in Mongolia.
Gulfside was required to file a National Instrument (NI) 43-101
Technical Report not later than 45 days from the date of their news
release in support of the disclosure of a mineral estimate at the
property, disclosed in a news release of October 31, 2007. This
mineral estimate was not NI 43-101 compliant at the time of
disclosure.
- Gulfside did not file a NI 43-101 Compliant Technical Report
to support disclosure of the mineral estimate on a mineral property
within the required 45 days.
- In response, the BCSC issued a Cease Trade Order to remain in
effect until the Company files a compliant report.
- Gulfside has now received and is filing a NI 43-101 Compliant
Technical Report for the Erdenetsogt Property, prepared by Norwest
Corporation ("Norwest") of Salt Lake City, Utah.
Furthermore, in the news release of October 31, 2007, Gulfside
did not discuss the quality of the resource estimate or specify the
assurance category of the estimate as required by NI 43-101
standards for disclosure for mineral projects.
Robert M. Card, President of Gulfside is pleased to announce
that the Company has received the NI 43-101 Technical Report for
the Erdenetsogt Project from Norwest. The Norwest Report has
addressed these disclosure issues, as follows.
CURRENT RESOURCES: The lignite coal resource in the "measured"
category totals 434 million tonnes while 751 million tonnes are
classified as "indicated". Combined, a total of 1,185 million
tonnes are classified in the "measured" plus "indicated"
categories. These resources are of the "Surface" deposit type and
are estimated to have a cumulative in-place waste volume (m3) to
coal tonnage ratio of 0.6:1. The coal occurrence can be divided
into eight distinct seams, or benches of a seam, separated by rock
interburden. The combined coal thickness of the eight benches
averages 79 meters throughout the resource area. Structural
modification of the deposit has been minimal.
The resource estimates are based on exploration data and
information collected by a Mongolian company that formerly owned
the coal property. Drilling in 2006 and 2007 consisted of 36
boreholes totaling 5,689 meters, with Norwest personnel on-site for
the completion of eight of the holes drilled in 2007.
Based on the geologic data available and geologic interpretation
at the time the resource estimate was prepared (March 31, 2008),
Norwest states that the estimate is considered reasonable. The firm
cautions that there is no guarantee all or part of the estimated
resources will be recoverable.
COAL QUALITY: Coal resources at Erdenetsogt are classified as
Lignite A, based on ASTM standards. Typical in-place coal quality
(air-dried basis) of the lignite resource is presented in the
following table.
Average Minimum Maximum
---------------------------------
Inherent Moisture % 23.05 15.63 29.29
Ash % 17.35 12.74 22.24
Sulfur % 1.70 1.35 2.31
Calorific Value (kCal/kg) 4,003 3,453 4,560
Norwest has recommended additional exploration focused on infill
drilling to better understand bench correlations and the continuity
and geometry of "in-bench" partings for mine-planning purposes.
Norwest also cautions that pre-feasibility level planning and
economics cannot be conducted without hydrologic and additional
geotechnical data, and therefore has recommended a drilling program
of 10 geotechnical/coal quality core holes and three hydrological
pump-test locations.
Erdenetsogt Property
Location: The Erdenetsogt Property is located in the Dornogobi
region of southeastern Mongolia, about 430 kilometers from
Ulaanbaatar, and 200 kilometers from the border with China. The
coal license covers 13,574 hectares situated within a
Cretaceous-age basin where coal occurrences were first discovered
in the 1960's by Russian-Mongolian mapping teams. The property is
six kilometers from a 35KW electric power line and 82 kilometers
from the Trans-Mongolian Railroad.
Ownership: The coal license is owned by ECM Co. LLC ("ECM"), a
Mongolian company. ECM is 100% owned by a British Virgin Island
holding company, Mangreat Group Ltd. ("Mangreat"), which in turn is
a wholly owned subsidiary of Guardstand Nominees (HK) Limited
("Guardstand"), headquartered in Hong Kong.
- Gulfside stated in a news release dated March 14, 2008, that
its intent was to acquire a 100% interest in the private company
holding the Erdenetsogt Coal Property over a period of 15
months.
- Gulfside clarified in a news release dated April 30, 2008 that
it has entered into a share purchase agreement ("SPA") dated March
7, 2008, with Guardstand to acquire a 49% interest in Mangreat,
which holds 100% of the coal license through ECM, its wholly owned
Mongolian subsidiary. The staged transaction, valued at about
US$16.5 million, will give Gulfside full operating rights and an
indirect 49% interest in the Mongolian subsidiary and the coal
license. The Company also had a letter of understanding allowing
the Company to acquire the remaining 51% in the interest in the
coal license, under certain conditions, up until January 31,
2009.
- Gulfside announced in a news release dated September 25, 2008
that Guardstand is currently in breach of its obligations under the
SPA and the Company has been unable to complete the agreement. The
SPA provides that any dispute arising out of or relating to the SPA
shall be settled by arbitration. The Company has retained a law
firm in London England as their counsel and they have initiated
arbitration proceedings.
- Gulfside has also initiated civil proceeding in Mongolia to
assert its rights to the property. This civil action is against
Monrospromugoli LLC ("MRPU") regarding a June 7, 2007 Cooperative
Agreement executed by Gulfside and MRPU with regards to the
Erdenetsogt coal license. According to the terms of the Cooperative
Agreement, MRPU was required to form a new joint venture company
and transfer the title to the Erdenetsogt coal license to that
joint venture company upon payment of certain sums of money by
Gulfside to MRPU. On February 18, 2009 the Bayangol District Court
in Mongolia found MRPU violated the terms of the Cooperative
Agreement by failing to properly transfer five percent of the
shares of the joint venture company, ECM. The court ordered MRPU to
transfer five percent of the shares of ECM to Gulfside.
Subsequently MRPU has appealed this order and Gulfside is preparing
for this appeal.
Qualified Person: Lawrence D. Henchel, P.G., Manager of Geologic
Services, Norwest Corporation, an independent Qualified Person as
defined by NI 43-101, is responsible for the mineral resource
estimates and other information summarized from the Technical
Report.
On behalf of the Board of Directors
Gulfside Minerals Ltd.
Robert L. Card, President
This news release was prepared by management of GMG which takes
full responsibility for its contents.
All statements, other than statements of historical fact, in
this news release are forward-looking statements that involve
various risks and uncertainties, including, without limitation,
statements regarding the potential extent of mineralization and
reserves, exploration results and future plans and objectives of
Gulfside Minerals Ltd. These risks and uncertainties include, but
are not restricted to, the amount of geological data available, the
uncertain reliability of drilling results and geophysical and
geological data and the interpretation thereof, and the need for
adequate financing for future exploration and development efforts.
There can be no assurance that such statements will prove to be
accurate. Actual results and future events could differ materially
from those anticipated in such statements. These and all subsequent
written and oral forward-looking statements are based on the
estimates and opinions of management on the dates they are made and
are expressly qualified in their entirety by this notice. The
Company assumes no obligation to update forward-looking statements
should circumstances or management's estimates or opinions
change.
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Contacts: Gulfside Minerals Ltd. Robert L. Card Investor Contact
604-687-7828 604- 687-7848 (FAX) Robertcard@shaw.ca
www.gulfsideminerals.com
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