Galway re-negotiates Carboluis agreement

    TORONTO, June 25 /CNW/ - Galway Resources Ltd. (GWY: TSX-V) is pleased to
announce that the Company has successfully re-negotiated the deal terms with
Rio Tinto for the Carboluis coal project located in Santander, Colombia. The
total land package for the concessions represents roughly 50% of the San Luis
coal basin, comprising 7,500 hectares. Nineteen historic drill holes, along
with extensive surface sampling, have shown strong potential for the basin and
the concession package.
    "The new deal terms are more attractive and provide us with greater
flexibility to bring in a joint venture partner to advance the project. Also,
by pushing off the payments by one year, it enables Galway to potentially fund
the next step of development internally, as market and funding conditions
improve for coal exploration," cites Robert Hinchcliffe, President and CEO of
Galway Resources.

    The highlights of the modified deal terms with Rio Tinto include:
    -   The $122,000 payment due in the present quarter of 2009 has been
        postponed for one year, all future payments have been pushed off one
        year as well.
    -   Payment terms per ton for coal discovered are now payable with a 2%
        royalty on production for the life of the project. The prior
        arrangement was based on $1.25/ton for any economical coal found paid
        over the first 5 years of commercial production.

    About the San Luis project

    The company implemented a drilling campaign with some success in the 4th
quarter of 2008 and the 1st quarter of 2009. Management believes that a more
aggressive drilling program is needed to determine the economic potential of
the coal contained in the concessions. The Company is seeking out a joint
venture partner to fund the next level of development, which would be an
aggressive drilling program. The basin is recognized as having high grade coal
containing a mixture of thermal and metallurgical coal. The project has
favorable infrastructure with road access and available electricity. There is
one producing mine in the San Luis basin, directly adjacent to Galway's land

    Prodeco Joint Venture/GALCA update

    Drilling should begin on the GALCA coal project in late July or early
August, during which the region has the most favorable weather conditions. As
announced, a joint venture has been formed with Xstrata's Colombian
subsidiary, Prodeco, (the third largest Colombia coal producer, with 10
million tons of annual production), whereby Prodeco has agreed to fund the
first $7.5 million in expenditures in order to earn a 60% stake in the
project. In order to attain 100% ownership, Prodeco has agreed to pay $.80/ton
up to $80 million for any economical coal found in the area. This area has the
potential to be an entirely new coal basin in Colombia.

    Annual General Meeting Update

    All motions were approved at the Annual General Meeting which was held on
Monday, June 22, 2009. Included in the motions outlined in the Information
Circular, was the appointment of Mr. Jose Oro to replace Mr. Leigh Freeman as
a Director of the Company. The Company would like to thank Mr. Freeman for all
his contributions as a Director, and wish him the very best in all future

    About the Company

    Galway Resources has engaged John Tumazos, of Very Independent Opinion,
to help commercialize the flagship Victorio molybdenum project located in
southwest New Mexico. Management is cognizant of the tough market conditions
and is thus maintaining a balance of adding value to shareholders while
conserving capital. Discussions are underway with a potentially interested
party to form an alliance for the second stage of drilling at the Carboluis
project in the San Luis coal basin. A drilling program will be underway at our
GALCA project over the summer, funded by Prodeco.

    Neither the 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.

    Forward Looking Statements:

    Some statements in this news release contain forward-looking information.
These statements include, but are not limited to, statements with respect to
the completion of transactions, the possibility of coal deposits, future
exploration, development and production activities, future expenditures and
forecast Colombian coal production. These statements address future events and
conditions and, as such, involve known and unknown risks, uncertainties and
other factors which may cause the actual results, performance or achievements
to be materially different from any future results, performance or
achievements expressed or implied by the statements. Such factors include,
without limitation, the timing and success of contemplated transactions and
exploration, development and production activities, the realization of coal
deposits, the timing and amount of expenditures and actual realized Colombian
Coal production. See the "risk factors" set out in Galway's management's
discussion and analysis files on the SEDAR website.

For further information:

For further information: Galway Resources Ltd., Robert Hinchcliffe,
President and Director, 1-800-475-2412,

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