Great Western Minerals Group Ltd (fka GWG)

[Pro-Life]

CORPORATE UPDATE – AS AT DECEMBER 31, 2012

Via e-Mail...

December 31, 2012 - Saskatoon, Canada: Great Western Minerals Group Ltd. ("GWMG" or the "Company", TSX:V – GWG) today issued an update on issues pertinent to the Company’s progress and status.

Preliminary Economic Assessment ("PEA"):
GWMG plans to issue a media release that contains the results of its PEA in January 2013. While the Company had targeted the issuance of the release for the 4th Quarter of 2012 it was determined that the relative complexity of the PEA, incorporating mining, chloride production, separation, metal making, alloy manufacturing and product sales, meant that additional time would be required in order to integrate all components of the analysis. In addition, during the course of work on the PEA, GWMG made the decision to undertake a revised resource estimate. This extended, yet again, the scope of work to be incorporated into the PEA.

Chief Executive Officer ("CEO") Search:
The GWMG search committee is in the final stages of the selection process for a new CEO. The search committee, with the assistance of Korn Ferry International, has been actively engaged in the evaluation of several highly qualified candidates who have the requisite skills with which to lead a complex business operation such as GWMG. The search committee anticipates it will be in a position to announce the selection of the CEO early in 2013.

Vredendal Separation Plant Basic Assessment Report:
GWMG commissioned Savannah Environmental (Pty) Ltd., of Gauteng, South Africa, to prepare a Basic Assessment Report ("BAR"), which addresses all regulatory and environmental requirements for projects located on the industrial zoned land on which GWMG plans to construct its separation plant (see GWMG news release August 30, 2012). During the development of the BAR, the Company made the decision to increase the amount of land designated for the separation plant to 19.9 hectares on the advice of its technical advisor on the project, Ganzhou Qiandong Rare Earth Group Ltd. ("GQD"). As a result of the site expansion, a road transport study was necessitated. GWMG anticipates the expanded report will be submitted to the South African Department of Environmental Affairs and Development Planning by mid-February 2013. In addition, a Land Use Planning Ordinance ("LUPO") application is underway through the Company's consultants, Planning Partners. The preliminary LUPO application for rezoning has been submitted, accompanied by information and technical studies from the draft BAR, to the Matzikama Municipality. It is anticipated the LUPO application process will be completed by the end of the 1st Quarter of 2013.

Steenkampskraal Mixed Chloride Production Plant:
GWMG's mixed chloride production plant contractor, DRA Mineral Projects (Pty) Ltd., has developed a revised "Work Breakdown Structure" and is fully engaged in the tendering process for goods and services for the construction of the mixed chloride plant at the Steenkampskraal site. GWMG is targeting the 1st Quarter of 2013 for the commencement of on-site construction work.

Director Options:
The Company announces that it has granted to newly appointed Company director, Marc LeVier, 400,000 options to acquire common shares of the Company. The options are exercisable into common shares of Great Western Minerals Group Ltd. at a price of $0.22 per share for a period of five years from the date of grant, December 21, 2012, and will vest in accordance with the Company's stock option plan.

Warrant Expiry:
The Company had previously extended the exercise term for 41,413,723 warrants originally issued on October 19, 2010 and having an exercise price of $0.45 per Warrant (see GWMG news release December 6, 2012) to January 15, 2013. GWMG announces today that it will not be making application to the TSX Venture Exchange for further extension of the expiry date.

Planned Milestones for Early 2013:
During the early stages of 2013, GWMG anticipates the execution of a number of significant milestone events as it continues to develop as a first mover in the rare earth industry outside of China and one of the most fully integrated rare earth companies in the world. These milestones include:

- Preliminary Economic Assessment: As noted, the PEA news release scheduled for January 2013, is to include confirmation of estimated capital expenditure requirements for the mine, mixed chloride facility and separation facility, estimated operating expenditures for the fully integrated business model, a new resource estimate and timelines for the next steps in the Steenkampskraal construction process. Significantly, the PEA will enable the Company to publicly discuss financial projections for the fully integrated business model.
- CEO appointment.
- An announcement that production using the new strip cast furnace has commenced on a commercial basis at the Company’s wholly owned subsidiary Less Common Metals ("LCM") in the United Kingdom.
- An announcement that LCM’s second strip cast furnace has arrived and is being commissioned for production.
- Updates on the chloride production plant at Steenkampskraal.
- Updates on the separation plant at Vredendal.
- Updates on the Company’s previously announced evaluation of the spinoff of its non-South African exploration properties.
- Additional assay results from the ongoing exploration program at GWMG's Steenkampskraal operation.

GWMG Interim President and Chief Executive Officer Robert Quinn said, "We realize the past months have been a trying time for investors. Company management is aware of the impact of slippages from previously announced time targets. We remain committed to executing our plan that will create one of the most highly integrated rare earth companies outside of China. As we continue through the process with the milestones noted in this release we believe the market will be able to see, with increasing clarity, the financial strength of the business model that has been envisaged since the formation of GWMG."

Great Western Minerals Group Ltd. is engaged in becoming an integrated rare earth producer. The Company currently produces specialty alloys which are used in the aerospace, automobile, computer and high-tech 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 iron, 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 South Africa. 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 [phone]. Email inquiries should be made to [e-mail] 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.