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Great Western Minerals Group Signs Letter of Intent to Supply Rare Earth Alloys to U.S. Based Electron Energy Corporation

SASKATOON, SASKATCHEWAN--(Marketwire - 01/31/11) - Great Western Minerals Group Ltd. ("GWMG" or the "Company") (TSX-V:GWG - News) (Pinksheets:GWMGF - News) announces that it has signed a non-binding Letter of Intent ("LOI") with Electron Energy Corporation ("EEC") of Landisville, Pennsylvania to supply samarium metal, gadolinium metal and samarium-cobalt alloys used by EEC to manufacture magnets and magnet systems.EEC is a fully integrated U.S. designer and manufacturer of Rare Earth magnets and assemblies. Founded in 1970 and with approximately 120 employees today, EEC is positioned as a significant American rare earth magnet producer.GWMG President and Chief Executive Officer Jim Engdahl said, "The ability of GWMG to enter into this LOI is based on our Company's plans to put the formerly producing Steenkampskraal mine back into production. The interest of EEC in entering into this agreement with our Company is a concrete example of the importance of certainty of supply in today's Rare Earths market."Michael H. Walmer, President of Electron Energy Corporation, stated, "As a supplier to our own customers it is essential that we secure long term supplies of raw materials. As a customer of a company such as Great Western Minerals Group, it is equally important that we express our intent, as we have done through this LOI, so that GWMG can adequately plan its own capacity."The Letter of Intent focuses primarily on samarium metal, gadolinium metal, samarium cobalt alloys produced by co-reduction and samarium cobalt alloys produced by vacuum induction melting.Jim Engdahl, President and CEOGreat Western Minerals Group Ltd. is an integrated Rare Earths processor. 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 Birkenhead, U.K. and Great Western Technologies Inc. in Troy, Michigan, these alloys contain aluminium, nickel, cobalt and Rare Earth Elements. As part of the Company's vertical integration strategy, GWMG has signed an Off-take Agreement for 100% of the Rare Earth Elements produced at the former producing Steenkampskraal mine in South Africa and holds 70.2% ownership in Rare Earth Extraction Co. Limited, the owner of the Steenkampskraal mine. GWMG also holds interests in seven Rare Earth exploration and development properties in North America.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, entering into a binding agreement with EEC, satisfaction of the conditions precedent with respect to GWMG's offtake agreement, receipt of all required approvals (including those relating to the commencement of production at the Steenkampskraal mine) and risks, uncertainties and other factors that are beyond the control of GWMG, 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, risks associated with the uncertainty of reserve or resource estimates, health and safety risks and the uncertainty of estimates and projections of production, costs and expenses. 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. 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 current annual information form available at www.sedar.com.CUSIP: 39141Y 10 3Neither 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.