GREAT WESTERN MINERALS GROUP AND GANZHOU QIANDONG RARE EARTH GROUP SIGN RARE EARTH SEPARATION AGREEMENT
January 10, 2012 - Saskatoon, Canada: Great Western Minerals Group Ltd. ("GWMG" or the "Company", TSX:V — GWG) is pleased to announce that the joint venture agreement ("Agreement") with Ganzhou Qiandong Rare Earth Group Ltd. ("GQD") of China for the construction of a rare earth separation plant in South Africa has been completed and signed.
Pursuant to the Agreement, the newly created joint venture company, Great Western GQD Rare Earth Materials Proprietary Limited ("GWGQD") will immediately finalize the preliminary work already underway on the process design and environmental components of the separation plant and move toward construction of the facility.
A wholly owned subsidiary of GWMG will own mixed rare earth chlorides, which GWGQD will process under a tolling agreement. The Agreement provides that GWGQD will separate mixed rare earths into products usable by GWMG's wholly owned subsidiary, Less Common Metals Limited ("LCM"), and third party customers.
Under the terms of the Agreement, GQD receives 25% of the shares of GWGQD for its contribution to design and construction of the facility, and $7.5 Million of GWMG shares to be paid over three years contingent on the facility being fully commissioned and operating effectively, and fees and/or dividends for providing long term management support for the operation of the separation facility.
The separation plant will be constructed in close proximity to GWMG's Steenkampskraal operation where the previously operating mine is being refurbished and readied in anticipation of rare earth mining.
GQD is a highly respected processor of Rare Earth oxides and metals with over twenty years of operational experience in China during which time it has been a significant supplier of metals and oxides to LCM.
GWMG President and Chief Executive Officer Jim Engdahl said, "This agreement represents one of the single most significant milestones in the history of GWMG. We are exceptionally pleased to have concluded such an important agreement between our Company and GQD for the construction and operation of a rare earth separation plant. Our agreement with GQD, with its two decades of rare earth processing experience, means that we have successfully engaged a rare earth industry leader as a joint venture partner to execute the separation component of our Company's plan to be the most fully integrated rare earth processing company outside of China."
Mr. Bin Gong, Chief Executive Officer of GQD said, "The signing of this joint venture agreement between GQD and GWMG represents a landmark development in the rare earth industry. This agreement sets the foundation for our two companies to proceed to full development of a separation facility within our joint venture. While it may have taken us longer than expected to get to this point, the complexities of such a groundbreaking agreement should not be underestimated. However, we are now in a position to allow the joint venture to proceed with all haste. Everybody at GQD looks forward to a long and rewarding relationship with GWMG."
Great Western Minerals Group Ltd. is an integrated Rare Earths 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 aluminium, 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 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 email@example.com 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 construction, commissioning and operation of the separation facility, refurbishment activities and reliance on third parties to meet projected timelines, the results of the exploration program at Steenkampskraal, a resource estimate and commencement of production at Steenkampskraal, satisfaction of the conditions precedent with respect to GWMG's offtake agreement, receipt of all required approvals (including those relating to the commencement of production at the Steenkampskraal mine) 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 or resource 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 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 current annual information form available at www.sedar.com.