SASKATOON, SASKATCHEWAN--(Marketwire - June 15, 2009) - Great Western Minerals Group Ltd. (TSX VENTURE:GWG)(PINK SHEETS:GWMGF) ("GWMG" or the "Company") announced today that GWMG and Molycorp Minerals, LLC ("Molycorp") have terminated discussions with regard to the letter of intent (the "Letter of Intent") pursuant to which GWMG and Molycorp were discussing the possible acquisition of a controlling interest in GMWG pursuant to a share issuance, merger, amalgamation, or other form of business combination (the "Proposed Transaction") as disclosed in the Company's news release of April 20, 2009.
The structure of the Proposed Transaction, as disclosed on April 20, was to include a mutually beneficial business combination that would substantially maintain GWMG's "mine-to-market" business model. Subsequent revisions to the Proposed Transaction structure, as disclosed in May 4, would have focused on the purchase GWMG's manufacturing assets, including those of Great Western Technologies Inc. and Less Common Metals Limited, and a joint-venture participation in two of GWMG's exploration projects.
Management of GWMG and the Special Committee consisting of independent members of the board of directors of GWMG (the "Board") advised the Board that GWMG and Molycorp could not reach agreeable terms with respect to the revised focus of the Proposed Transaction. As negotiations progressed, management and the Board determined that the structure proposed by Molycorp would not accomplish the original goals of the Proposed Transaction. Management and the Board continue to believe that shareholder value will be best achieved by not selling GWMG's core assets and continuing to pursue GWMG's mine to market strategy and management is continuing discussions with third parties that have indicated an interest in strategic relationships with GWMG.
As such, the Board determined that GWMG could not move forward with negotiation of a definitive agreement relating to the Proposed Transaction and both GWMG and Molycorp have allowed the Letter of Intent to expire in accordance with its terms.
Jim Engdahl, President and CEO of Great Western Minerals Group said "After careful consideration, we did not feel that the direction in which we were heading with Molycorp was in the best interests of our shareholders or that we would be able to come to arrangements that would preserve our unique mine-to-market strategy. In light of the recent and sudden focus on the rare earth sector by the investment markets and in view of the additional interest we have received during the last several months, we will continue to pursue discussions with other potential strategic partners who share our vision as a vertically integrated developer of rare earth properties and products".
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