TORONTO, Aug. 19 /PRNewswire-FirstCall/ - Galway Resources Ltd. (GWY:
TSX-V) is pleased to announce new resource estimates for the Victorio
project, which is a molybdenum tungsten project located in southern New
Mexico. The new resource estimate incorporated the results of the recently
completed 12-hole, 25,000 foot, phase 2, infill drilling program. The
purpose of the infill drilling program is to upgrade the resource with the
intended next step being a pre-feasibility study following the positive
results of the recent Scoping Study.
"We are very pleased with the new upgraded resource with a high
percentage now falling in the measured category. A component of our next
drilling program will be to further expand the higher grade core while also
expanding the larger system which is believed to be amenable to the
low-cost block caving mining method," cites Robert Hinchcliffe, President
and CEO of Galway Resources.
Highlights of new resource estimates include:
- Resources upgraded to Measured Category: The new resource estimates
now have roughly 25% in the Measured Category (versus 0% in the prior
estimate), and an additional 25% of the resources fall in the
Indicated Category.
- Block Caving potential appears more robust: The contained metal for
molybdenum and tungsten increased by over 22% at the $25 per ton
cutoff.
- Deposit remains open in 3 directions: The deposit remains open at
different cutoffs to significantly increase tonnages with additional
drilling.
- Prevailing $34 molybdenum price and $13 per pound tungsten price are
much higher than the estimated resources calculated using a
$15 molybdenum and $8 tungsten price.
New Victorio Resource Estimate using $15/lb molybdenum and $8/lb Tungsten
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Cutoff/ Mo Tungsten Contained Metal (pounds)
Category Ton Tons % % Molybdenum Tungsten
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Measured $25 37,737,913 0.10 0.08 71,702,035 61,890,177
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Indicated $25 39,499,463 0.08 0.09 64,779,119 72,679,012
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M+I $25 77,237,376 0.09 0.09 136,481,154 134,569,189
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Inferred $25 77,222,232 0.07 0.09 114,288,903 143,633,352
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Measured $35 20,275,366 0.12 0.11 47,444,356 42,983,776
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Indicated $35 19,125,184 0.10 0.12 39,397,879 45,517,938
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M+I $35 39,400,550 0.11 0.11 86,842,235 88,501,714
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Inferred $35 34,728,550 0.10 0.11 66,678,816 78,486,523
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Galway Resources recently retained John Tumazos, Very Independent
Opinions to commercialize the Victorio project. John Tumazos indicated, "We
estimate at $15 per pound molybdenum and $8 per pound tungsten that the
Victorio Project offers robust returns. Using the U.S. Securities and
Exchange Commission's (the "S.E.C.") suggested 3-year rolling average
molybdenum price and then conservatively discounting the price by a further
25%, leaves us with a molybdenum price of US$22.50 under the block caving
scenario yielding an NPV in excess of US$700 million. Additionally, there
is plenty of expansion potential for a deposit containing metals with a
strong outlook on the pricing side, plus add in the great infrastructure
and one realizes that all the ingredients are prevalent for an interesting
project."
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New Resource Estimate Comparison with Contained Metal
Prior Estimates in Pounds
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New Previous Change
$ Model Model in
Cutoff Tons Tons Tons Mo
value/ (Mill- (Mill- (Mill- Equiv Mo Equiv Change
Category ton ions) ions) ions) % lbs in lbs
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Measured +
Indicated 25 77 67 10 0.134 206,000,000 3,000,000
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Inferred 25 77 42 35 0.124 191,000,000 77,000,000
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Measured +
Indicated 35 39 40 -1 0.170 133,000,000 -20,000,000
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Inferred 35 35 22 13 0.156 109,000,000 34,000,000
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Note: For molybdenum equivalent calculation $15 per molybdenum price and
$8 per pound tungsten price was used assuming also that metallurgical
recoveries and net smelter returns are 100%.
Geological Modeling Discussion
The new geologic resource was calculated in compliance with NI 43-101
guidelines by Dr. H. Peter Knudsen, PhD. Dean of the School of Mines and
Engineering, Montana Tech of the University of Montana. Dr. Knudsen is a
"Qualified Person" as defined by NI 43-101, and is the Qualified Person
responsible for the new resource estimations contained in this news
release, and has reviewed the content of this press release.
The database used by Dr. Knudsen was updated to include Galway's
recently drilled holes, and totals 109 holes, 217,024 feet of drilling. The
same estimation procedure that SRK used for their geologic resource
estimate, inverse distance to the third power, was used for these
calculations. The SRK resource estimates were reported in Galway's press
release dated October 25, 2007.
Galway project personnel constructed new N-S and E-W sections and a new
limiting polygon was developed from the sections, plan maps and 3-D images
of the drill hole data. Dr. Knudsen calculated new 3-D shapes for each rock
type, and a new geologic model, using parameters similar to SRK. As in
previous studies a block size of 30' by 30' by 15' was used. The model was
made using SURPAC Vision and transferred into VULCAN.
The resources are classified into Measured, Indicated and Inferred
according to CIM guidelines. Standard geostatistical calculations show that
a drilling grid of 200 ft. will give estimates that have a +/- 25% relative
error bound. Thus, a portion of the resource could be upgraded into the
Measured category.
About the Company
The Company is focused on developing and commercializing the Victorio
project, and exploring for gold and coal in Colombia. The Victorio project
has 165,000 feet of historical drilling and Galway has drilled an
additional 40,000 feet. The Company has retained John Tumazos, of Very
Independent Research, to investigate strategic alternatives to advance this
project. Management believes that Galway's strategic portfolio of
properties offers investors an interesting exposure to a unique blend of
commodities (molybdenum, gold, tungsten, metallurgical and thermal coal) in
varying stages of development.
The TSX Venture Exchange does not accept responsibility for the accuracy
of this news release.
Forward Looking Statements:
Some statements in this news release contain forward-looking
information. These statements include, but are not limited to, statements
with respect to future exploration, development and production activities,
future studies and reports, and future expenditures. These statements
address future events and conditions and, as such, involve known and
unknown risks, uncertainties and other factors which may cause the actual
results, performance or achievements to be materially different from any
future results, performance or achievements expressed or implied by the
statements. Such factors include, among others, the use of proceeds, the
timing and success of future exploration, development and production
activities the timing and completion of future reports and studies, and the
timing and amount of expenditures.
SOURCE Galway Resources Ltd.
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CONTACT:
Galway Resources Ltd., Robert Hinchcliffe,
President and Director, 1-800-475-2412, http://www.galwayresources.com
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