molybdenum tungsten project located in Deming, New Mexico. On May 30,
2007 the Company announced that it had engaged
SRK Consulting (U.S.) to provide a Scoping Study on the Victorio
Project. Subsequent to that date on August 15, 2007, an updated
independent N.I. 43-101 resource estimate was released that
incorporated the results from Galway's first 10,000 foot infill
drilling program. Then on October 25, 2007, the resource was once
again updated by SRK using a more market relevant longer term price of
$15 per pound for molybdenum.
"It is important to note that prior to October 25, 2007, everyone was
focusing on optimizing a 35 million ton resource target. However, the
latest resource estimate based on a higher molybdenum price has
considerably improved the potential for this project, with the target
resource now lying between 60 and 100 million tons. With the current
molybdenum price of $33.10 per pound and the tungsten price of $12.50
per pound, the implied metal value for Victorio demonstrates its vast
potential," states Robert Hinchcliffe, President of Galway Resources.
Mr. Hinchcliffe adds, "In early October 2007, we began our second
infill drilling program (currently drilling our fifth hole) whose
focus is on upgrading the resource, testing new areas for additional
tonnage, and to allow us to conduct more comprehensive geotechnical
studies."
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Victorio 2007 Resource Model Run with $15 Mo and $8 WO(3)
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Geologic Resource (October 2007) Contained Metal in Pounds
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$ Tons
Category Cutoff (Millions) Mo % WO3 % Molybdenum Tungsten (WO3)
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Indicated 25 67 0.10 0.10 132,000,000 134,000,000
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Inferred 25 42 0.09 0.09 74,000,000 76,000,000
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Indicated 35 41 0.12 0.12 100,000,000 98,000,000
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Inferred 35 22 0.12 0.11 51,000,000 46,000,000
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Marshall Himes, the COO of Galway Resources states, "Using a more
realistic long-term moly price and evaluating lower cost mining
methods, has allowed us to consider mining a much larger resource,
thereby reducing operating costs and improving the overall economics
of the project. This new approach has resulted in SRK having to
retrace some of the steps in their economic evaluation. We believe a
very large portion of the project will be amenable to low cost
underground bulk mining methods, and we remain bullish about the
favorable development for the Victorio project. We now believe that
this Scoping Study will be finished by SRK Consulting by the end of
January 2008."
Geological Modeling Discussion
The new resource estimates incorporated the results from the Company's
first 10,000 foot (6 core holes) drilling campaign which was completed
in the Spring of 2007. The prior estimate that was announced earlier
this year (January 29, 2007) was derived using just the data from the
165,000 feet of drilling conducted by Gulf Minerals in the early
eighties.
For all the resources estimates, the resource model was constructed
utilizing Vulcan software, and using an inverse distance weighting to
the third power grade estimation technique. The model required a
minimum of 3 and maximum of 8 composites from at least two drill holes
to assign grade to each 30' by 30' by 15' block for the Indicated
resource classification. The molybdenum and tungsten grade estimations
were limited by individual hard boundary grade shells using only
composite data from within the grade shells, by rock type.
SRK has completed independent resource estimations according to CIM
resource categories in compliance with NI 43-101 guidelines for the
Victorio project. The resource modeling parameters used are minor
modifications to the parameters used in the January 2007 initial
resource estimate, which is provided in Galway's NI 43-101 technical
report dated February 28, 2007. Bart Stryhas and Allan V. Moran of SRK
Consulting (U.S.), are "Qualified Persons" as defined by NI 43-101,
and are the Qualified Persons responsible for the resource estimates
that were announced on October 25, 2007.
Current Molybdenum and Tungsten Pricing Remain Strong
After remaining below US$10.00 per pound for the past 25 years,
molybdenum prices began to rise in January 2004. Over the past 2 years
or so, prices for molybdenum have traded around US$25.00 per pound,
and within the past months prices have moved to US$33.10 per pound.
Higher levels of global molybdenum demand are cited by experts as the
primary reasons that molybdenum prices have performed so well as of
late.
A similar story holds true for tungsten, with pricing remaining
between US$2.50 per pound and US$5.00 per pound for over 20 years.
Tungsten pricing surged in January 2005 to just over US$15.00 per
pound and has remained resilient ever since. Over the past sixteen
months tungsten prices have remained around US$12.50 per pound.
Continued steady global tungsten demand coupled with lower exports
from China are cited as two primary drivers for sustained strong
tungsten pricing.
About the Company
The company is well capitalized with over $11 million in the treasury
and is focused on developing three U.S. based exploration projects
that are favorably located and have over 300,000 feet of historical
drilling. We have established a solid technical team that has compiled
all the historical data, and has carried out 5 drilling programs on
its three U.S. based projects over the past 12 months. Management
believes that its strategic portfolio of properties offers investors
an interesting exposure to a unique blend of commodities (molybdenum,
tungsten, copper, zinc, and silver)
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