Great Western Minerals Group Signs Agreement to Purchase 100% of Rare Earths Production From Steenkampskraal Mine

SASKATOON, SASKATCHEWAN -- (Marketwire) -- 08/10/10 -- Great Western Minerals Group Ltd. ('GWMG') or the ('Company'), (TSX VENTURE: GWG) (OTCQX: GWMGF) (PINK SHEETS: GWMGF) is very pleased to announce that it has signed an off-take agreement (the 'Agreement') with Rare Earth Extraction Co. Limited ('RareCo') of Stellenbosch, South Africa.

Under the terms of the Agreement, RareCo has agreed to sell and deliver, and GWMG has agreed to purchase, 100% (one hundred percent) of the Rare Earth Products produced by RareCo and its subsidiaries (the 'RareCo Group') from ore mined at RareCo's Steenkampskraal Mine.

In addition, GWMG can purchase 100% of Rare Earths mined or obtained by the RareCo Group from any other source of Rare Earth products that is owned, controlled and/or acquired by the RareCo Group, subject to the terms and conditions set out in the Agreement.

'This is an exceptionally important step forward for Great Western Minerals Group,' stated GWMG President and CEO Jim Engdahl. 'The Agreement propels our company toward becoming the first fully integrated Rare Earths producer outside of China, just as our corporate strategy envisages. With the Agreement in place, and as we meet its terms and conditions, GWMG will be positioned to supply its own Rare Earth chloride for further separation and use in its own processing, providing downstream margins. Moreover, the Agreement creates the potential for GWMG to expand production beyond its own processing requirements.'

'Supply certainty of Rare Earths is becoming a highly valuable commodity,' added Jim Engdahl. 'The ability for GWMG to purchase 100% of the output of the Steenkampskraal mine at market prices, as established through independent published reports as agreed by the parties, under this 10-year, renewable agreement moves our company well down the path toward the level of supply certainty valued by the market.'

Conditions of the Agreement include: (i) GWMG completing a feasibility study (the 'BFS') by December 31, 2011, and providing financing in relation to the results of the BFS within two months of its completion, or (ii) GWMG providing certain financing specified in the Agreement by December 31, 2010 (the 'Financing'). In each case, GWMG must commence certain pre-production activities specified by local regulation with regard to the project and mine site by June 2, 2011. The Financing may take the form of a loan to RareCo, an equity investment in RareCo or a combination thereof, in each case on such terms as RareCo and GWMG may agree.

Either party may terminate the Agreement if the conditions precedent are not completed within three months of the date of completion of the BFS. After satisfaction of the conditions precedent, the term of the Agreement will be determined by the nature of the Financing. If the Financing takes the form of a loan to RareCo or its subsidiaries, the Agreement will expire on the date that all amounts payable to GWMG under the loan have been repaid in full. If the Financing takes the form of an equity investment in RareCo or its subsidiaries, the Agreement will expire on the date that is 10 (ten) years after the date of the first shipment of Rare Earth Products pursuant to the Agreement, or 10 (ten) years after the expiry of RareCo's mining right with respect to the Steenkampskraal mine, whichever is earlier. On expiry of the Agreement, GWMG will acquire a right to negotiate a renewal of the Agreement. If the parties are unable to negotiate a renewal, GWMG has been granted a right of first refusal with respect to any agreements made by RareCo for the sale of Rare Earth Products.

Jim Engdahl, President and CEO

Great 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, UK 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 entered into the Agreement and holds interests in seven Rare Earth exploration and development properties in North America.

Cautionary Statement

Readers are cautioned that the obligations of GWMG and RareCo pursuant to the Agreement are subject to the satisfaction of the conditions contained in the Agreement, including those described in this press release, and that significant conditions are beyond the control of the Company. There can be no assurance that the results of the BFS will correspond with GWMG's current projections and economic assumptions, or that the results of the BFS will be sufficient to warrant further work on the project or lead to a production decision. There can also be no assurance that the required financing will be available on commercially reasonable terms, or at all.

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 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 3

Neither 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.

Contacts:

Great Western Minerals Group Ltd.

Dwight Percy

Manager of Investor Relations

(306) 659-4500
info@gwmg.ca
www.gwmg.ca


Great Western Minerals Group Ltd.

226 Cardinal Crescent

Saskatoon, SK S7L 6H8