🕐04.03.10 - 18:39 Uhr
GREAT WESTERN MINERALS GROUP SIGNS EXCLUSIVITY AGREEMENT WITH RARE EARTH EXTRACTION CO. LTD.
GREAT WESTERN MINERALS GROUP SIGNS EXCLUSIVITY AGREEMENT WITH RARE EARTH
EXTRACTION CO.
LTD.
March 4, 2010 - Saskatoon Saskatchewan - Great Western Minerals Group Ltd.
("GWMG" or the "Company) and Rare Earth Extraction Co.
Ltd.
of Stellenbosch
("Rareco"), South Africa are pleased to announce that they have entered into
an exclusivity agreement (the "Agreement") that allows both companies to
continue to move forward on their plans to jointly bring the former
operating Steenkampskraal Mine back into production.
The Agreement complements the Option Agreement (the "Option") signed in
December of 2008 and discussed in GWMG's news releases dated January 13 and
September 25, 2009 and GWMG's annual information form for the year ended
December 31, 2008.
Subject to GWMG's satisfaction with the results of its
due diligence and certain other conditions, GWMG intends to consider one or
more transactions which may result in the acquisition of an equity interest
in Rareco and/or the negotiation of a supply agreement (the "Supply
Agreement").
The Agreement is also intended to assist Rareco in its efforts to obtain a
new order mining right from South Africa's Department of Mineral Resources
(the "DMR"), to assist Rareco in preparation for full site development and
to provide added certainty and flexibility with respect to GWMG's
negotiation of an appropriate transaction structure.
Under the terms of the Agreement, GWMG will pay to Rareco the sum of ZAR
75,000 (approximately C$10,275) per month for up to 12 months for certain
standstill provisions and undertakings including, but not limited to:
* Working with the DMR to expedite the conversion of the old order
mining right to a new order mining right;
* Obtaining all necessary governmental and regulatory approvals
required to operate the Steenkampskraal Mine once the new order mining right
is issued;
* Funding the rehabilitation guarantee required by the DMR in respect
of the Steenkampskraal Mine; and
* Facilitating the receipt of all necessary governmental and
regulatory approvals for GWMG's involvement in the ownership structure of
the project.
In the meantime, GWMG will be initiating, with Rareco, several activities on
the property designed to move the project forward rapidly once the new order
mining right is received.
These activities include:
* Upgrading and maintaining the mine access road;
* Setup of the existing mine office building;
* Delivering appropriate supplies and equipment to the property for
communications, health and safety and general administration;
* Establishing surface and underground survey control;
* Digitizing appropriate existing surface and underground maps and
data; and
* Collecting surface and underground samples for a full suite of
assays, QEMSCAN work, and verification of the process design.
Rareco has also made application for a sizable exploration permit
surrounding the Steenkampskraal Mine area where other rare earth occurrences
are known to exist.
The Company is pleased to report that, pursuant to the terms of the original
Option, both parties are advancing a working draft of the Supply Agreement
contemplated in the Option.
Under the terms of the Supply Agreement, GWMG
would obtain the right to purchase 100% of the rare earth products recovered
from the mining and processing of the Steenkampskraal ore.
GWMG may
exercise its rights under the Option by delivering the draft Supply
Agreement within 90 days of the issuance of the new order mining right.
A
portion of the rare earth production from the Steenkampskraal Mine would be
used to supply both of GWMG's manufacturing facilities at Less Common Metals
Limited and Great Western Technologies Inc.
with their entire rare earth
requirements when manufacturing operations are at full capacity.
Trevor Blench, Chairman of Rareco says, "It has been a long hard road to
bring Steenkampskraal this close to production, and we are pleased to be
working with the people at Great Western Minerals Group to do so.
The fact
that they may be utilizing a significant portion of the rare earth
production, in their own manufacturing plants to produce value-added
products for their existing customers, gives us considerable comfort on the
mine revenue side.
The preparatory activities currently being discussed and
implemented will help ensure a quick start to construction once the new
order mining right is received."
Jim Engdahl, President and CEO of Great Western Minerals Group says, "We are
excited about strengthening our relationship with Rareco and we believe that
this agreement will provide an even more solid foundation, allowing us to
move forward more aggressively toward our mutual goal of returning the
Steenkampskraal Mine to production expeditiously." Engdahl adds, "While in
South Africa, we toured the property with a Member of Parliament from the
governing African National Congress, who shares our excitement about the
much needed job opportunities that the Steenkampskraal Mine would provide to
a depressed area of South Africa and we are proud to be working with Rareco
in contributing to the economic and social well-being of the people there."
GWMG also announced that distribution under its short form prospectus dated
January 20, 2010 with respect to 591,592 common shares issuable upon the
exercise of outstanding broker warrants ended on March 3, 2010.
Jim Engdahl
President and CEO
Great Western Minerals Group Ltd.
is a Canadian-based developer of Rare
Earth Element assets, with four active rare earth exploration and
development properties in North America with an option on a former-producing
property in South Africa.
In addition, as part of the Company's strategy to
pursue a vertically-integrated business model, the Company's wholly-owned
subsidiaries of Less Common Metals Limited located in Birkenhead, UK, and
Great Western Technologies Inc., located in Troy, Michigan, produce a
variety of specialty alloys for use in the battery, magnet and aerospace
industries.
These "designer" alloys include those containing aluminum,
nickel, cobalt and the rare earth elements.
For further information, please contact Ron Malashewski, Manager of Investor
Relations at (306) 659-4500.
Email inquiries should be made to
and the company website is located at www.gwmg.ca.
Inquiries by direct mail
should be addressed to Great Western Minerals Group Ltd., 226 Cardinal
Crescent, Saskatoon, SK S7L 6H8.
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 Great Western Minerals
Group 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 entering into of a definitive agreement, receipt of all
required approvals and risks, uncertainties and other factors that are
beyond the control of GWMG, 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 estimates, health
and safety risks and the uncertainty of estimates and projections of
production, costs and expenses.
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.
The forward-looking statements of GWMG contained in this
press release, or incorporated herein by reference, are expressly qualified,
in their entirety, by this cautionary statement and the risk factors
contained in GWMG's current annual information form.
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.