Mongolian Resource Play

[Tackler]

Gulfside Minerals to acquire Monster coal property

2007-06-21 14:42 MT - News Release

Mr. Robert Card reports

GULFSIDE ACQUIRES 'MONSTER' COAL PROPERTY

Gulfside Minerals Ltd. has signed a letter of intent with a private Mongolian company leading to the acquisition of the Monster coal property located in southwestern Mongolia. The Monster property, so named because of the presence of massive coal seams up to 100 metres thick, is located about 430 kilometres southwest of the capital Ulan Bator and within 200 km of the Chinese border. The property is 82 km to the railway and six km from a 35-kilowatt electric power line.

The history of the property dates back to 1963 with the first surveys conducted under the direction of Russian geologists. More work was done in 1986 to 1987 by the Russians when a large amount of coal was noted. In 2006, the present owner caused a number of holes to be drilled to test the coal-bearing layers. The depth of the drill holes were between 74 m and 240 m and intersected four coal seams with the total thickness of coal of between 41.5 m and 94.9 m. Additional holes show even thicker coal seams with the largest intersection of 129.3 metres. The potential reserves will be more fully integrated into the picture during a planned coal scoping study and a National Instrument 43-101 reserve study report. The property is estimated to contain up to 550 million tonnes of coal in the Mongolian C category and a much larger potential reserve of 2.5 billion tonnes in the possible and probable category. The area of the C category reserves is about 6.5 million square metres and 29 million square metres cover the possible/probable area of the deposit. Coal from this area sells for $20 to $40 per tonne. A qualified person has not done sufficient work to classify the historical estimate as current mineral resources, the issuer is not treating the historical estimate as current mineral resources and the historical estimate should not be relied upon.

The company will be conducting additional drilling over the summer to determine reserves for a qualifying NI 43-101 report.

The coal deposit has a strike length in a southeasterly direction of 16 to 18 km and a width of six to eight km. It occupies a large area of Erdenetsogt hollow and Gobi-Gashuun dry land, which covers most of the territory of Altanshiree Soum. The coal deposit is ideal for the planning of a very high capacity open pit mine with coal quality and production capacity suitable for shipping to China by truck and train in very large amounts. The location lends itself as the fuel source for a large power generating operation. Another consideration is for coal to liquids production such as diesel and gasoline and research into the "holy grail" of the coal industry which is the in situ gasification of coal with the resulting gas being used in numerous applications.

The company has an agreement to acquire a 50-per-cent interest in a private company set up to hold the lease with an option to acquire an additional 16-per-cent interest within one year for a total of 66 per cent. A sliding scale royalty of 3 to 5 per cent is payable on production. The company will be the operator of the project. More details will be available after review of the transaction by the TSX Venture Exchange. Dr. Marc Bustin, PhD, PEng, is the company's NI 43-101 qualified person on this project and has reviewed this news release.

Project generation

The company is in the process of filing for additional leases with substantial previous exploration results which complement the presently owned Erdenet and Khentii projects.