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 April 23, 2008
Galway Resources Files Scoping Study For Victorio Molybdenum-Tungsten Project

 
Toronto, ON: April 23, 2008 -- Galway Resources Ltd. (GWY: TSX -- V) is pleased to announce that the National Instrument 43-101 Preliminary Assessment (or "Scoping Study") for its 100% owned Victorio molybdenum-tungsten project (the "Project"), located 20 miles west of Deming, New Mexico, has been filed on SEDAR (www.sedar.com) and is also available at www.galwayresources.com.

"We are pleased with the results of the Victorio Scoping Study. We believe that there is room for improvement in the economics of the project, particularly regarding the engineering. Management is currently focused on exploring strategic alliances in order to creatively advance the Victorio project", says Rob Hinchcliffe, President and CEO of Galway Resources.

As previously reported in the February 27, 2008 press release, the highlights of the Scoping Study completed by SRK Consulting U.S. Inc., which contemplated two different mining scenarios using an average life of mine price of $15/lb molybdenum and $8/lb tungsten price include:

Block Caving Scenario: This scenario is a larger project that considers producing an average of 9.4 million pounds of molybdenum and 9.0 million pounds of tungsten annually for 17 years. The preliminary economics suggest an NPV (discount rate of 6%) of over US$270 million, a pre-tax (unlevered) IRR of 15%, and a required investment in the order of US$442 million.

Selective Mining Scenario: This is a smaller scale project that offers higher returns with a pre-tax (unlevered) IRR of 26%, and a NPV of US$95 million. Under this scenario only a portion of the target resource is extracted, with an average of 6.2 million pounds of molybdenum and 5 million pounds of tungsten annually for 10 years. The capital required is in the order of US$242 million, the mining methods are a combination of long hole stoping with paste backfill and room-and-pillar mining.

The Scoping Study includes a recommended work program to advance the project to the permitting and pre-feasibility stages. The recommendations include:
  • To better understand the engineering of the deposit, more specifically to further optimize the economics of the project by perhaps combining the two different mining scenarios outlined in the Scoping Study.
  • Conducting additional in-fill drilling with the goal of :
    • Converting Inferred resources to Indicated resources
    • Further defining the edge of the deposit with the objective of adding incremental tonnage
  • Conducting a specific drilling program to define the deposit's geotechnical characteristics with a goal of determining:
    • Confirmation of the block-caveability characteristics of the deposit
    • Inputs to a structural model for purposes of mine planning
  • Re-examining the mining options and associated operating and capital costs
  • Conducting a comprehensive metallurgical program to define optimal processing parameters, conceptual process flow sheets, and capital and operating costs
  • Initiating baseline environmental studies, as part of a program aimed at completing an Environmental Impact Study
  • Initiating a strategy to begin permitting the envisioned underground mining operation
As a result of the favorable findings of the Scoping Study, Galway is now proceeding with the next phase of development work necessary to complete a Pre-feasibility study. A 12 hole in-fill core drilling program is currently underway at Victorio to provide additional data with the goals of upgrading the resource classification, collecting new data for geotechnical evaluation, and collecting additional sample material for metallurgical and geotechnical testing. In addition, Galway is presently identifying and retaining suitable, qualified experts to complete the various aspects of a Pre-feasibility Study and expects to appoint a lead consulting firm shortly.

VICTORIO SCOPING STUDY SUMMARY

 

Selective Scenario

Block Caving Scenario

Net Present Value at 6%

US$95 million

US$270 million

Internal Rate of Return (IRR)

26%

15%

Payback

3.2 years

6.3 years

Cash Cost Per Pound Moly *

US$6.03 per pound

US$8.67 per pound

 

 

 

Annual Ore Production

2.6 million tons

8.2 million tons

Daily Production Rate

8,500 tons

25,000 tons

Mine Life

10 years

17 years

Mineral Resource

28.5 million tons

139 million tons

 

 

 

Average Grade --molybdenum

0.13%

0.07%

Average Grade -tungsten (WO3)

0.12%

0.07%

Moly Production Per Year

6.2 million pounds

9.4 million pounds

Tungsten Production Per Year

5.0 million pounds

9.0 million pounds

 

 

 

Metallurgical Recovery

 

 

Molybdenum

85%

85%

Tungsten

75%

75%

Molybdenum Payfor

90%

90%

 

 

 

Mining Cost Per Ton (LoM ave.)

$17.60

$4.60

Processing Cost Per Ton

$9.84

$8.44

G&A Per Ton

$1.50

$0.75

 Total Cost Per Ton

$28.94 

 $13.79

 

 

 

Capital

 

 

Mine, Equipment & Development

$130 million

$213 million

Processing

$66 million

$144 million

Tailings

$25 million

$51 million

Infrastructure

$7 million

$11 million

Other

$14 million

$23 million

Total Capital Cost

$242 million

$442 million

*Galway Calculated Value

Mineral resources that are not mineral reserves do not have demonstrated economic viability. The preliminary assessment includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the preliminary assessment will be realized.

About the Company
The company is focused on developing two U.S. based exploration projects that are favorably located and have over 250,000 feet of historical drilling, in addition to the 50,000 feet of drilling carried out by Galway over the past 18 months. The Company also has an exploration initiative underway in Colombia that is focused on coal and gold. Management believes that its strategic portfolio of properties offers investors an interesting exposure to a unique blend of commodities (molybdenum, gold, tungsten, metallurgical and thermal coal).

Professional consultants within SRK Consulting (U.S.) are "Qualified Persons" as defined by NI 43-101, and are the Qualified Persons responsible for the Victorio resource estimates and the preliminary assessment (scoping study) described in this news release. SRK has reviewed the content of this press release.

Pete Hahn of St. George, Utah, Galway Resources' Chief Geologist, is the Qualified Person within Galway responsible for Galway's exploration data that are the basis for this Preliminary Assessment.

For further information contact:

Galway Resources Ltd.
Robert Hinchcliffe
President and Director
1-800-475-2412
www.galwayresources.com
 
 

You can view the Next News Releases item: Wed May 7, 2008, Galway Resources Infill Drilling Intercepts 75 Feet Of High Grade Molybdenum & Tungsten At Victorio

You can view the Previous News Releases item: Wed Feb 27, 2008, Galway Resources Reports Positive Scoping Study Results For The Victorio Project

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