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Goldsource Announces Initial Border Coal Resource

Monday, November 9, 2009 12:06 AM
A majority of the resource is above 7,300 BTU/lb AR which is similar to currently producing coal mines in Alberta; and

- Air Dried Calorific Value (Heat Value) ranges from 18,027 to 21,977 KJ/Kg (7,750 to 9,450 BTU/lb) using an average AD laboratory value of 5%, as dried by Loring.

BORDER COAL QUALITY SUMMARY (AS RECEIVED)

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Total CV/Heat CV/Heat
Ash Moist Sulphur Value Value
Sub-Basin Deposit (wt %) (wt %) (wt %) (KJ/Kg) (BTU/lb)
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Niska Niska 108 17.2 21.7 2.3 17,594 7,565
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Niska Niska 107 15.6 26.2 2.5 17,051 7,332
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Pasquia Pasquia 96 17.9 24.3 1.9 16,319 7,017
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Pasquia Pasquia 98 20.5 22.2 2.9 16,773 7,212
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Pasquia Pasquia 5 22.1 29.7 2.1 13,335 5,734
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Pasquia Pasquia 5 SE 22.1 29.7 2.1 13,335 5,734
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Pasquia Pasquia 2 16.7 29.4 1.5 15,333 6,593
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Chemong Chemong 3 11.7 33.4 1.6 15,470 6,652
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Chemong Chemong 6 16.0 30.9 1.9 15,333 6,593
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Chemong Chemong 20 17.4 32.8 2.1 14,387 6,186
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Chemong Chemong 7 20.9 17.7 3.2 17,513 7,531
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Chemong Chemong 100 22.1 24.0 2.6 14,513 6,240
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Split Leaf Split Leaf 39 18.9 28.2 1.6 14,705 6,323
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Split Leaf Split Leaf 114 20.0 31.9 2.4 13,808 5,763
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Previous disclosure of coal quality for Border reported was both As Received and Air Dried ash and moisture content. The Air Dried results for these stated coal resources should not be considered representative for potentially deliverable coal to a domestic power plant or export market. Further studies are required to determine the actual average moisture content of any coal that may be deliverable to a power plant or marketed elsewhere. The CV's reported above are based on a Total Moisture content of the coal. This moisture content could potentially be reduced while mining and processing, which would directly increase the CV and monetary value of the coal. The actual moisture content of the as mined coal may be greater than the Equilibrium Moisture value and potentially less than the As Received core moisture values. This needs to be substantiated by further test work.

Of the 470 individual coal samples analyzed from the core holes completed to date; 95 (est. 20%) have As Received ash content values of 10% or less. Tonnage volumes for this low ash coal will be evaluated as the project progresses. Lower ash content coals, with subsequent higher CV's, may be considered for an export market. Washability of coal with subsequent upgrading is also under consideration. Test work to date suggests a 10 to 15% decrease in ash content will result in a similar increase in CV. Sulfur appears to also be reduced by washing. Please refer to the news release dated April 28, 2009 for more details.

Border thermal coal quality in regards to Moisture, Ash and Calorific Values are comparable to the Alberta Plains coal deposits which currently produce most of the electric power for Alberta. The general thickness of Alberta coal seams is 0.5 to 5 metres whereas at Border, the average true thickness is approximately 25 metres. Average waste to coal ratios for Alberta coal operations are approximately 8:1 whereas at Border, some deposits have a waste to coal ratio as low as 3.3:1, making Border coal potentially more economically attractive for open pit or strip mining. A 20:1 incremental strip ratio is considered to be conceptually open pittable based on GSC Paper 88-21 and depending on the coal's monetary value.

R.J. Morris, M.Sc, P.Geo. and independent qualified person with Moose Mountain Technical Services of Elkford, British Columbia, has commented that the initial coal resources established for Border are considered attractive thermal coals with the potential to be a significant future energy source for power-hungry Saskatchewan. The recommendations of the Technical Report will be to complete a Preliminary Economic Assessment for the property to assess coal deposit mineability, washability, infrastructure requirements, permitting requirements, environmental baseline work, transport, pricing, local and export markets, preliminary capital and operating costs, on-site power plant viability and preliminary economic viability.

N. Eric Fier, CPG, P.Eng.


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