Corporate Update – As at
October 31, 2012
“GWMG Expands Scope of PEA, Retains Q4 2012 Release
Target”
Great Western Minerals Group Ltd. (”GWMG” or the
“Company”) Corporate Holdings:
·
1 Former producing mine: Steenkampskraal mine in South
Africa: Under development.
·
1 Rare earth mixed chloride plant at Steenkampskraal:
Under development.
·
1 Rare earth solvent extraction separation plant near
Steenkampskraal: Under development.
·
2 Rare earth alloy manufacturing plants: Less Common
Metals Limited (“LCM”) in Birkenhead, U.K. and Great Western
Technologies Inc. (“GWTI”) in Troy, Michigan: In
operation.
·
5 Rare earth exploration projects: 1 at
Steenkampskraal, 4 in North America.
Preliminary
Economic Assessment:
In line
with previous guidance, GWMG remains committed to release a
Preliminary Economic Assessment (“PEA”) during the 4th
Quarter of 2012. The purpose of the PEA is to further develop and
communicate operational and financial projections for the Company’s
complete corporate structure based on independent analysis of the
mining of rare earth-bearing monazite, extraction to mixed
chloride, separation of oxides, and metal and alloy
production.
Subsequent
to that announcement, the Company has instructed its PEA
consultants, Snowden Mining Industry Consultants (Pty) Ltd.
("Snowden") of Johannesburg, South Africa, to extend the original
scope of the PEA work to include a new resource estimate for the
area of mineralization identified by the Company’s Steenkampskraal
exploration activities in recent months.
The Company anticipates this initiative could result in additional
National Instrument 43-101-compliant Inferred and Indicated
resource tonnages. The Company will then add this to the
provisional mine plan to determine to what extent it could extend
the potential life of mine.
The Company
expects that even with the expanded scope of work under the PEA,
its 4th Quarter 2012 release target will be
achieved.
Steenkampskraal
Exploration:
On September 18,
2012, GWMG reported on assays
varying from 0.02 to 45.81 weight percent ("wt.%") Total Rare Earth Oxides ("TREO") with an
average of 17.74 wt.% TREO from underground channel, resource drill
hole and exploration drill hole assays.
Within
the drill program that was reported, covering 83 drill holes, true
thickness varied from 0.02 metres to 6.67 metres and averaged 0.92
metres.
As of October 18, 2012, GWMG has now completed 106 drill holes over
a total of 12,634.29 metres. Assay results will continue to be
released once analyzed. Shipments of samples to SGS Laboratories of
Johannesburg, South Africa are ongoing and as a result the Company
expects that the Steenkampskraal drill program will continue to
produce assay results subsequent to the cut-off point for inclusion
in the updated resource estimate that is included in the upcoming
PEA.
Steenkampskraal
Surface Refurbishment:
GWMG has recently
completed additional work on surface facilities at Steenkampskraal
as it prepares for administration and mining activity at the
Steenkampskraal site. These include:
· An updated survey
has been conducted by the Radiation Protection Officer and his team
in preparation for zoning for the start of construction of the
mixed chloride plant.
· The offices near
the Steenkampskraal entrance gate are now fully
functional.
· The scrap yard has
been cleared up with scrap sorted into various
classifications.
· The surface soil
around the old slimes residues has been remodeled to prevent
potential radiation migration.
· The old building
ruins that had been in place since mining activities in the 1960’s
have been cleared.
· The regular
watering of roads in, and to, the Steenkampskraal site, using water
from the reverse osmosis water treatment plant, has led to
significantly reduced levels of dust generation.
· The wash down area
for vehicles, the new gate house and weigh bridge are now
installed.
Steenkampskraal
Underground Refurbishment:
GWMG has also
completed several underground refurbishment steps as it prepares
for mining activity at the Steenkampskraal site. These
include:
· A new ventilation
system with a set of three fans is being installed near the top of
the decline for purposes of pulling air underground through the
mine. Ingress of fresh air will be through the decline as well as
through the vertical secondary exit shaft.
· The new ropes,
winder and head gear will undergo commissioning trials early in
2013.
Mixed Chloride
Plant:
As noted in
GWMG’s Corporate Update of August 30, 2012, the position of the
mixed chloride plant at the Steenkampskraal site has been finalized
after sterilization drilling at the first two locations found
significant monazite mineralization beneath them. The geotechnical
work as well as the radioactivity survey at the area of the site
that has been chosen for the planned 5,000 tonnes per annum mixed
chloride plant is now complete.
Evaluation
of long-lead items and time-critical project components is
underway. In addition, design work has begun for the
installation of tanks, pumps, dispensing, pipework and
blending equipment that will be needed to accept deliveries of
commercial chemicals at the mixed chloride plant. The Company has
selected DRA Group of South Africa as the contractor on the current
work program.
Solvent
Extraction Separation Plant:
The
preliminary layouts for the solvent extraction separation plant
have been completed in China. GWMG will now continue to develop
those plans according to South African construction and operations
standards.
The solvent
extraction separation plant project is being overseen by GWMG
Vice-President Metallurgy Baodong Zhao, Technical Consultant Xinbin
Rui, Rare Earth Extraction Co. Ltd. (“Rareco”) Technical Manager
Witker Zimba, GWMG Vice-President Operations Richard Hogan and
Rareco Operations General Manager Vic Fitzmaurice.
Corporate:
The CEO
recruitment process continues to work toward the appointment of the
Company’s new Chief Executive Officer within the previously stated
target of 2012. The Search Committee, consisting of Interim CEO
Robert Quinn, and independent Directors Bill McKnight, George
Ireland and Ian McNaughton, reports that high quality candidates
who are attracted to a unique, multi-faceted, high growth
opportunity have displayed a very strong interest in the position.
The Search Committee is working with Korn/Ferry International, a
global executive recruitment agency which has conducted in excess
of 10,000 senior-level searches worldwide, in the selection phase
of the process.
Baodong Zhao has been
appointed Vice-President, Metallurgy. Dr. Zhao is responsible for
oversight of the implementation of critical technological
applications of metallurgy in all aspects of GWMG’s business
development and expansion planning. Dr. Zhao holds a Bachelors and
a Masters Degree in Physical Chemistry in Metallurgical Processes
from the University of Science and Technology in Beijing and a Ph.
D. in Chemistry from Queen’s University.
Great Western Minerals Group Summary:
Great Western Minerals Group Ltd. is an integrated rare earth
processor. Its specialty alloys are used in the battery, magnet and
aerospace industries. Produced at the Company’s wholly owned
subsidiaries Less Common Metals Limited in Birkenhead, U.K. and
Great Western Technologies Inc. in Troy, Michigan, these alloys
contain aluminum, nickel, cobalt and
rare earth elements. As part of the Company’s vertical integration
strategy, GWMG also holds 100% equity ownership in Rare Earth
Extraction Co. Limited, which owns a 74% equity interest in the
Steenkampskraal Mine in South Africa. In addition to an exploration
program at Steenkampskraal, GWMG also holds interests in four
active rare earth exploration and development properties in North
America.
For further information, please contact Dwight Percy, Manager of
Investor Relations at (306) 659-4516. Email inquiries should be
made to info@gwmg.ca and the company website is located at
www.gwmg.ca. Inquiries by direct mail should be addressed to Great
Western Minerals Group Ltd., 219 Robin Crescent, Saskatoon, SK S7L
6M8.
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.
Certain information set out in this News Release constitutes
forward-looking information. Forward-looking statements (often, but
not always, identified by the use of words such as "expect", "may",
"could", "anticipate" or "will" and similar expressions) may
describe expectations, opinions or guidance that are not statements
of fact and which may be based upon information provided by third
parties. Forward-looking statements are based upon the opinions,
expectations and estimates of management of GWMG as at the date the
statements are made and are subject to a variety of known and
unknown risks and uncertainties and other factors that could cause
actual events or outcomes to differ materially from those
anticipated or implied by such forward-looking statements. Those
factors include, but are not limited to, the successful and timely
completion of its preliminary economic assessment at Hoidas Lake;
the successful and timely completion of its preliminary economic
assessment and its results, the construction, commissioning and
operation of the proposed monazite processing facility and solvent
extraction separation facility, mine refurbishment activities,
reliance on third parties to meet projected timelines and
commencement of production at Steenkampskraal; risks related to the
receipt of all required approvals including those relating to the
commencement of production at the Steenkampskraal mine, delays in
obtaining permits, licenses and operating authorities in Canada,
South Africa and China, environmental matters, water and land use
risks; risks associated with the industry in general, commodity
prices and exchange rate changes, operational risks associated with
exploration, development and production operations, delays or
changes in plans; risks associated with the uncertainty of reserve
or resource estimates; health and safety risks; uncertainty of
estimates and projections of production, costs and expenses; risks
that future Hoidas Lake or Steenkampskraal and region exploration
results may not meet exploration or corporate objectives; the
adequacy of the Company’s financial resources and the availability
of additional cash from operations or from financing on reasonable
terms or at all; political risks inherent in South Africa and
China; risks associated with the relationship between GWMG and/or
its subsidiaries and communities and governments in Canada and
South Africa, radioactivity and related issues, dependence on one
mineral project; loss of, and the inability to attract, key
personnel; the factors discussed in the Company’s public disclosure
record; and other factors that could cause actions, events or
results not to be as anticipated. In light of the risks and
uncertainties associated with forward-looking statements, readers
are cautioned not to place undue reliance upon forward-looking
information. Although GWMG believes that the expectations reflected
in the forward-looking statements set out in this press release or
incorporated herein by reference are reasonable, it can give no
assurance that such expectations will prove to have been correct.
Except as required by law, GWMG does not assume
any obligation to update forward looking statements as set out in
this news release. The forward-looking statements of GWMG
contained in this News Release, or incorporated herein by
reference, are expressly qualified, in their entirety, by this
cautionary statement and the risk factors contained in GWMG's
annual information form available at www.sedar.com.
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