Galway Resources releases new resource estimates for the Victorio project

    TORONTO, Aug. 19 /CNW/ - Galway Resources Ltd. (GWY: TSX-V) is pleased to
announce new resource estimates for the Victorio project, which is a
molybdenum tungsten project located in southern New Mexico. The new resource
estimate incorporated the results of the recently completed 12-hole, 25,000
foot, phase 2, infill drilling program. The purpose of the infill drilling
program is to upgrade the resource with the intended next step being a
pre-feasibility study following the positive results of the recent Scoping
    "We are very pleased with the new upgraded resource with a high
percentage now falling in the measured category. A component of our next
drilling program will be to further expand the higher grade core while also
expanding the larger system which is believed to be amenable to the low-cost
block caving mining method," cites Robert Hinchcliffe, President and CEO of
Galway Resources.

    Highlights of new resource estimates include:

    -   Resources upgraded to Measured Category: The new resource estimates
        now have roughly 25% in the Measured Category (versus 0% in the prior
        estimate), and an additional 25% of the resources fall in the
        Indicated Category.

    -   Block Caving potential appears more robust: The contained metal for
        molybdenum and tungsten increased by over 22% at the $25 per ton

    -   Deposit remains open in 3 directions: The deposit remains open at
        different cutoffs to significantly increase tonnages with additional

    -   Prevailing $34 molybdenum price and $13 per pound tungsten price are
        much higher than the estimated resources calculated using a
        $15 molybdenum and $8 tungsten price.

    New Victorio Resource Estimate using $15/lb molybdenum and $8/lb Tungsten

              Cutoff/               Mo   Tungsten   Contained Metal (pounds)
    Category    Ton      Tons        %       %      Molybdenum     Tungsten
    Measured    $25   37,737,913   0.10    0.08     71,702,035    61,890,177
    Indicated   $25   39,499,463   0.08    0.09     64,779,119    72,679,012
      M+I       $25   77,237,376   0.09    0.09    136,481,154   134,569,189
    Inferred    $25   77,222,232   0.07    0.09    114,288,903   143,633,352
    Measured    $35   20,275,366   0.12    0.11     47,444,356    42,983,776
    Indicated   $35   19,125,184   0.10    0.12     39,397,879    45,517,938
      M+I       $35   39,400,550   0.11    0.11     86,842,235    88,501,714
    Inferred    $35   34,728,550   0.10    0.11     66,678,816    78,486,523

    Galway Resources recently retained John Tumazos, Very Independent
Opinions to commercialize the Victorio project. John Tumazos indicated, "We
estimate at $15 per pound molybdenum and $8 per pound tungsten that the
Victorio Project offers robust returns. Using the U.S. Securities and Exchange
Commission's (the "S.E.C.") suggested 3-year rolling average molybdenum price
and then conservatively discounting the price by a further 25%, leaves us with
a molybdenum price of US$22.50 under the block caving scenario yielding an NPV
in excess of US$700 million. Additionally, there is plenty of expansion
potential for a deposit containing metals with a strong outlook on the pricing
side, plus add in the great infrastructure and one realizes that all the
ingredients are prevalent for an interesting project."

    New Resource Estimate Comparison with               Contained Metal
     Prior Estimates                                       in Pounds
                       New  Previous  Change
                 $    Model   Model     in
              Cutoff   Tons    Tons    Tons     Mo
               value/ (Mill-  (Mill-  (Mill-  Equiv   Mo Equiv      Change
    Category    ton    ions)   ions)   ions)    %        lbs        in lbs
    Measured +
     Indicated   25     77      67      10    0.134  206,000,000   3,000,000
    Inferred     25     77      42      35    0.124  191,000,000  77,000,000
    Measured +
     Indicated   35     39      40      -1    0.170  133,000,000 -20,000,000
    Inferred     35     35      22      13    0.156  109,000,000  34,000,000
    Note: For molybdenum equivalent calculation $15 per molybdenum price and
    $8 per pound tungsten price was used assuming also that metallurgical
    recoveries and net smelter returns are 100%.

    Geological Modeling Discussion

    The new geologic resource was calculated in compliance with NI 43-101
guidelines by Dr. H. Peter Knudsen, PhD. Dean of the School of Mines and
Engineering, Montana Tech of the University of Montana. Dr. Knudsen is a
"Qualified Person" as defined by NI 43-101, and is the Qualified Person
responsible for the new resource estimations contained in this news release,
and has reviewed the content of this press release.
    The database used by Dr. Knudsen was updated to include Galway's recently
drilled holes, and totals 109 holes, 217,024 feet of drilling. The same
estimation procedure that SRK used for their geologic resource estimate,
inverse distance to the third power, was used for these calculations. The SRK
resource estimates were reported in Galway's press release dated October 25,
    Galway project personnel constructed new N-S and E-W sections and a new
limiting polygon was developed from the sections, plan maps and 3-D images of
the drill hole data. Dr. Knudsen calculated new 3-D shapes for each rock type,
and a new geologic model, using parameters similar to SRK. As in previous
studies a block size of 30' by 30' by 15' was used. The model was made using
SURPAC Vision and transferred into VULCAN.
    The resources are classified into Measured, Indicated and Inferred
according to CIM guidelines. Standard geostatistical calculations show that a
drilling grid of 200 ft. will give estimates that have a +/- 25% relative
error bound. Thus, a portion of the resource could be upgraded into the
Measured category.

    About the Company

    The Company is focused on developing and commercializing the Victorio
project, and exploring for gold and coal in Colombia. The Victorio project has
165,000 feet of historical drilling and Galway has drilled an additional
40,000 feet. The Company has retained John Tumazos, of Very Independent
Research, to investigate strategic alternatives to advance this project.
Management believes that Galway's strategic portfolio of properties offers
investors an interesting exposure to a unique blend of commodities
(molybdenum, gold, tungsten, metallurgical and thermal coal) in varying stages
of development.

    The TSX Venture Exchange does not accept responsibility for the accuracy
    of this news 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
future exploration, development and production activities, future studies and
reports, and future expenditures. 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,
among others, the use of proceeds, the timing and success of future
exploration, development and production activities the timing and completion
of future reports and studies, and the timing and amount of expenditures.

For further information:

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

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