Tungsten

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Galway drills 15 feet of 0.87% WO3 at Indian Springs

2006-11-28 13:39 ET - News Release

Mr. Robert Hinchcliffe reports

GALWAY ANNOUNCES MORE ENCOURAGING DRILL RESULTS FROM INDIAN SPRINGS

Galway Resources Ltd. is releasing encouraging drilling results from the Indian Springs tungsten project. The company recently completed its 20-hole 6,000-foot reverse-circulation program, and just more recently finished a five-hole 2,000-foot core program. Results for the first 10 holes were reported in Stockwatch news Aug. 29, 2006, and on Sept. 26, 2006. Receipt of the results for the last five reverse-circulation holes and four core rig holes is still pending.

"These intercepts indicate good potential for expanding the Indian Springs resource at depth. Combining the results of the two recently completed drilling campaigns with the historical drill data will allow Galway to move forward with the National Instrument 43-101-compliant resource estimate to be completed by SRK Consulting in January. That will keep us on track to produce a scoping study in March, 2007," cites Marshall Himes, the chief operating officer of Galway Resources.

Highlights of the current drill results

Analytical results have been received for an additional five holes from the Indian Springs project and are shown in the table below. Of particular interest are:


new areas of mineralization -- holes ISR06-112 and ISR06-113 that intersected 280 feet and 100 feet of mineralization in deeper portions of the deposit that have received little previous drilling. Results are pending for a core hole that has since been drilled near ISR06-113; and
high-grade intercepts -- hole 112 also encountered some very high-grade ore-grade intercepts in excess of 0.80 per cent tungsten oxide (WO3).

Current tungsten pricing

After trading between $45 to $75 per short ton unit (as reported by Metal Bulletin and the United States Geological Service) during the 1980s and 1990s, the significant decrease in exports from China served as the impetus for prices to rise sharply at the end of 2004. Since October of 2005, tungsten prices have remained above $250 per short ton unit, with current pricing above $260 per short ton unit. Note, one short ton unit is equal to 20 pounds of WO3, which puts current tungsten prices at $13.00 per pound.

 
          
 Hole ID                      From       To    Interval         WO3% 
                                                  (feet)  fusion/XRF 
      
 ISR06-111                      65        80        15          0.20 
 460 feet TD                   175       205        30          0.19 
 Twins J-2 (open rotary) 
 Twins IS-8 (core)             295       435       140          0.16 
 including                     370       375         5          1.38 
 ISR06-112                     115       140        25          0.25 
 620 feet TD                   150       175        25          0.16 
 Tests deeper open 
 portion of deposit            315       595       280          0.23 
 including                     315       330        15          0.87 
 and                           385       395        10          0.85 
 ISR06-113                     280       380       100          0.17 
 380 feet TD 
 Tests deeper open 
 portion of deposit 
 ISC06-115 (core)               30        45        15          0.30 
 363 feet TD                   101       145        44          0.25 
 Twins ISRC-1 (RC) 
 Twins UCW-83 
 (open percussion)             260       290        30          0.18 
 ISR06-116                     140       210        70          0.19 
 260 feet TD 
 Expands south end 
  
 

The near-surface mineralization at Indian Springs tends to dip shallowly to the east. The holes reported here cut the shallow mineralized zones nearly perpendicularly and represent approximately true thickness intercepts. The geometry of the deeper zones is not understood as well, but the holes were not drilled down dip or parallel to the trend of mineralization and the intercepts are thought to represent substantial zones of disseminated mineralization.

The Indian Springs tungsten property, located in northeastern Nevada (25 miles north of Montello), is an advanced-stage exploration property that has been inactive since the early 1980s due to low tungsten prices. The open-pittable project represents an opportunity for Galway Resources to bring a historical advanced tungsten property to the scoping-study (expected March, 2007) level in less than one year of acquisition by spending less than $1-million (U.S.).

The project had undergone extensive exploration drilling and metallurgical testing during the period of 1968 through 1986, including the activities of three major mining companies -- Placer Amex, Union Carbide and Utah International -- for a total estimated expenditure of from $3-million (U.S.) to $5-million (U.S.). A historical tungsten resource was defined based upon 336 drill holes, representing over 82,000 feet of drilling and thousands of feet of trenching, geologic mapping and sampling, along with metallurgical testing. The drill-defined tungsten mineralization has exploration potential along strike to the northeast and southwest.

The most current reserve, carried out by Utah International in 1984 (internal company documentation), stated a reserve of 8.85 million tons at 0.257 per cent WO3 at a 0.17-per-cent cut-off and a strip ratio of 4.8. Additionally, using a lower cut-off grade on the same orebody, Utah International also reported a reserve of 21.94 million tons at 0.179 per cent WO3, at a 0.10-per-cent cut-off grade and a strip ratio of 1.3. These historical reserve numbers should not be relied upon as they have not been classified according to Canadian Institute of Mining resource/reserve categories. There is insufficient documentation to categorize the historical reserves and therefore to reconcile them with current National Instrument 43-101 resource/reserve categories. While current NI 43-101-compliant resources and/or reserves are not established for Indian Springs, Galway considers the project data to be substantial and relevant. Indications are that resource estimation is achievable using the large amount of existing historical drill data. Plans are in place for SRK Consulting U.S. to produce an NI 43-101 resource estimate around January, 2007.

Quality assurance/quality control (QA/QC)

The company has implemented a program of quality assurance and quality control to ensure collection and analysis of all drill samples are conducted in accordance with the best possible practices. Samples are stored in a secured area in Montello prior to transfer to lab personnel for shipping to the Chemex sample preparation facility in Elko, Nev. Other QA/QC procedures include the insertion of blanks and control samples every 100 feet, and reassaying duplicate pulps of 5 per cent of all samples and 10 per cent of samples assaying greater than 0.1 per cent WO3. All duplicate samples are reassayed at both Chemex and at a certified independent laboratory (SGS). WO3 is assayed at the Chemex Vancouver laboratory by two methods: (1) lithium borate fusion with an XRF finish; and (2) pressed pellet XRF.

The results of the company's current drilling program have been reviewed, verified (including sampling, analytical and test data) and compiled by the company's geological staff (which includes a qualified person, Bob Morrell, CPG, the company's vice-president of project development, for the purpose of National Instrument 43-101 standards of disclosure for mineral projects, of the Canadian Securities Administrators).

Mr. Morrell is Galway's qualified person responsible for the activities at Indians Springs and has reviewed the technical content of this news release. Galway is following best practices guidelines in documenting, reporting and conducting exploration activities at Indian Springs.