SASKATOON, May 15, 2013 /PRNewswire/ - Great Western Minerals Group Ltd.
("GWMG" or the "Company") (TSX.V: GWG / OTCQX: GWMGF), a leader in the
manufacture and supply of rare earth-based alloys and high purity
metals with a low cost, high-grade critical rare earth asset (the
"Steenkampskraal Project" or "SKK"), today provided an update on the
Company's activities and financials through March 31, 2013, as well as
its strategy and outlook.

First Quarter and Recent Highlights

• 
  Revenue for 2013 first quarter was $3.5 million, down from $4.5 million
  during the prior-year period, but an increase of $0.7 million, or 26%,
  from the sequential fourth quarter of 2012. Company revenue was
  primarily attributable to its production subsidiary Less Common Metals
  Limited ("LCM")
  



• 
  Operating loss decreased $2.2 million from the prior year primarily due
  to a $5.7 million gain on the conversion option to the Company's
  convertible debt
  



• 
  Preliminary Economic Assessment ("PEA") on SKK released during the
  quarter
  



• 
  Exploration expenditures and focus will be on SKK Project, while other
  project expenditures are being significantly curtailed
  



• 
  Company had $43.9 million in cash as of March 31, 2013
  
  

"We are making progress as we implement initiatives aimed at supporting
our strategy which is to expand our opportunity as a metal and alloy
producer by developing a secure source of rare earth elements through
our SKK project," stated Marc LeVier, President and CEO. "We are also
focused on reducing general overhead expenses, reducing exploration
expenses and funding only required activities that support our
objectives. We plan to reduce our burn rate to conserve our cash and
spend on activities that de risk our project, all with the intent of
achieving our goals."

Manufacturing Services

Mr. LeVier noted, "We expanded our manufacturing capacity at our LCM
facility located in Ellesmere Port, U.K., with the installation of our
new strip cast furnace and also began installation of our second strip
cast furnace, which we expect to complete in the second quarter of
2013. Importantly, the facility move and equipment will more than
double our previous capacity."

Manufacturing services revenue decreased by $1.0 million, or 21.7%, for
the first three months of 2013 compared with the same period in the
prior year while gross profit dropped by $0.6 million, or 35.0%. The
decrease in revenue was due to a combination of lower volume and price,
as average prices for alloys have decreased by approximately 16%
year-over-year.

For the first three months of 2013, LCM sold 55 metric tonnes of alloys
compared with 67 metric tonnes of alloys for the same period in 2012.
The decrease in volume was attributable to an overall softening in the
rare earth alloy market. The Company anticipates the volume of alloys
to increase during 2013 as certain qualification programs are currently
ongoing with key customers. Overall, the Company expects alloy sales
volumes to be greater than 2012 levels, due to the growth in the strip
cast alloys market and LCM's new strip cast furnace.

In the short-term, the growth of the Company's revenue from LCM may be
limited by its ability to obtain the necessary rare earth materials to
produce products at LCM and Great Western Technologies Inc. Once the
SKK Project has commenced production, the Company expects this
limitation to be removed.

Steenkampskraal Project (SKK)

During the quarter ended March 31, 2013, the Company expended $2.4
million on various development exploration and technical reports,
including the completion of an updated resource estimate, the
completion of the PEA, the commencement of an expanded drill program of
an estimated 65 holes (9,400 meters) of which 33 holes (4,692 meters)
were completed. The Company is awaiting assay results. The
aeromagnetic and aerogeophysics surveys were also initiated in the
first quarter. Comparatively, in the first quarter of 2012, the
Company expended $2.2 million predominantly on development drilling,
engineering evaluation work and technical studies.

At SKK, the mine rezoning from agricultural to mining has been completed
for the duration of the new order mining right. At the Vredendal site,
the location of a proposed separation facility, the environmental
impact assessment (Basic Assessment Report or BAR) has been submitted
to authorities, and is currently in a revision and review stage.

During the first quarter of 2013, the Company announced the initial
results of the PEA indicating the following:

• 
  
  $555 Million after-tax net present value applying a 10% discount rate
  and a 28% South African corporate tax rate
  



• 
  66% after-tax internal rate of return
  



• 
  2.5 year estimated project payback period, on an after-tax basis, from
  start of underground mining production.
  



• 
  11 year potential life of mine
  

The NI 43-101 compliant technical report containing the results of PEA
was filed on SEDAR website on May 1, 2013.

The Company intends to continue further exploration of the mineral
resources at the SKK Project and perform additional design work and
metallurgical testing in order to finalize the design of the Rare Earth
Chloride ("RECl") Plant. The PEA has assisted the Company in
evaluating its timing and funding requirements for the SKK Project.
Based on the timelines in the PEA, production of mixed RECl is
projected to commence within 24 months of the completion of required
project financing, at a design capacity of approximately 5,000 tonnes
per year of contained Rare Earth Oxides.

The Company is currently evaluating a variety of funding options as well
as alternatives to reduce capital outlays. This includes evaluating
toll separation alternatives to defer certain upfront capital costs and
shorten timelines. Until such time as the funding is secured, the
Company will manage its current cash position to best support the
progress of the SKK Project.

Liquidity Position

The Company's cash and cash equivalents were $43.9 million at March 31,
2013, exclusive of $7.3 million held in escrow to service bond interest
payments due in April and October of 2013. The cash position decreased
by approximately $8.2 million from December 31, 2012. The Company's
use of cash in operations for the three month period ended March 31,
2013 was $6.5 million compared with $7.4 million for the same period in
the prior year.

The Company expects capital expense requirements other than those
related to the SKK Project to begin to decrease as it completes the
investments in LCM.

General and administrative expenses increased 14.4%, or $159 thousand,
from the prior-year period, primarily attributable to increased travel
associated with the Company's extensive review of its sites and
operations. It is anticipated that these expenses will be reduced in
the near future.

Jim Davidson, VP of Finance and Chief Financial Officer stated "We are
looking at all our expenditures and will carve out or defer any
expenditures that are not on the critical path or required for
regulatory compliance in an effort to reduce our cash burn rate. We
anticipate lowering the burn rate in the second half of 2013."

Qualified Persons

Brent C. Jellicoe, B.Sc. (Hon.), P.Geo., Director of International
Exploration for GWMG, is the Qualified Person (as defined under NI
43-101) responsible for supervising the preparation of the technical
content of this news release.

Teleconference and Webcast

GWMG will host a conference call and webcast May 16, 2013 at 11:30 a.m.
ET. During the call, management will provide an update on GWMG's first
quarter results and update on strategies and outlook for 2013. A
question-and-answer session will follow.

The GWMG conference call can be accessed by calling (201) 689-8471. The
live listen-only audio webcast can be monitored on the Company's
website at www.gwmg.ca, where it will be archived afterwards.

A telephonic replay will be available from 2:30 p.m. ET the day of the
teleconference until Thursday, May 23, 2013. To listen to the archived
call, dial (858) 384-5517 and enter replay pin number 413981. A
transcript will also be posted on the Company's website, once
available.

About GWMG

Great Western Minerals Group Ltd. is leader in the manufacture and
supply of rare earth-based alloys and high purity metals with a low
cost, high-grade critical rare earth asset. Its specialty alloys are
used in the battery, magnet and aerospace industries. Produced at the
Company's wholly-owned subsidiaries, Less Common Metals Limited in
Ellesmere, U.K. and Great Western Technologies Inc. in Troy, Michigan,
these alloys contain transition metals including nickel, cobalt, iron
and other 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 controls the Steenkampskraal
monazite mine. In addition to an exploration program at
Steenkampskraal, GWMG also holds interests in four rare earth
exploration and development properties in North America.

The company routinely posts news and other information on its website at
www.gwmg.ca.

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.

Cautionary Statement


Certain information set out in this News Release constitutes
forward-looking information. Forward-looking statements (often, but
not always, identified by the use of words such as "expect", "may",
"could", "anticipate" or "will" and similar expressions) may describe
expectations, opinions or guidance that are not statements of fact and
which may be based upon information provided by third parties.
Forward-looking statements are based upon the opinions, expectations
and estimates of management of GWMG as at the date the statements are
made and are subject to a variety of known and unknown risks and
uncertainties and other factors that could cause actual events or
outcomes to differ materially from those anticipated or implied by such
forward-looking statements. Those factors include, but are not limited
to the assumptions and estimates in the preliminary economic assessment
of the Steenkampskraal project proving to be accurate over time; the
construction, commissioning and operation of the proposed monazite
processing facility and separation facility within estimated
parameters; mine refurbishment activities; reliance on third parties to
meet projected timelines and commencement of production at
Steenkampskraal; risks related to the receipt of all required approvals
including those relating to the commencement of production at the
Steenkampskraal mine, delays in obtaining permits, licenses and
operating authorities in Canada, South Africa and China, environmental
matters, water and land use risks; risks associated with the industry
in general, commodity prices and exchange rate changes, operational
risks associated with exploration, development and production
operations, delays or changes in plans, including those estimated in
the preliminary economic assessment of the Steenkampskraal project;
risks associated with the uncertainty of resource estimates; health and
safety risks; uncertainty of estimates and projections of production,
costs and expenses; risks that future Steenkampskraal and region
exploration results may not meet exploration or corporate objectives;
the adequacy of the Company's financial resources and the availability
of additional cash from operations or from financing on reasonable
terms or at all; political risks inherent in South Africa and China;
risks associated with the relationship between GWMG and/or its
subsidiaries and communities and governments in Canada and South
Africa, radioactivity and related issues, dependence on one mineral
project; loss of, and the inability to attract, key personnel; the
factors discussed in the Company's public disclosure record; and other
factors that could cause actions, events or results not to be as
anticipated. In light of the risks and uncertainties associated with
forward-looking statements, readers are cautioned not to place undue
reliance upon forward-looking information. Although GWMG believes that
the expectations reflected in the forward-looking statements set out in
this press release or incorporated herein by reference are reasonable,
it can give no assurance that such expectations will prove to have been
correct. Except as required by law, GWMG does not assume any obligation
to update forward looking statements as set out in this news release.
The forward-looking statements of GWMG contained in this News Release,
or incorporated herein by reference, are expressly qualified, in their
entirety, by this cautionary statement and the risk factors contained
in GWMG's Annual Information Form available at www.sedar.com.

SOURCE Great Western Minerals Group Ltd.