Reports Positive Results for Border Coal Initial Washability Tests

Discovering Canada’s Coal resources

Intersected 23 metres of Black Coal - Border property 50km north of the town of Hudson Bay, SK

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Reports Positive Results for Border Coal Initial Washability Tests

posted on Apr 28, 2009 02:51PM

April 28, 2009

Goldsource Reports Positive Results for Border Coal Initial Washability Tests

VANCOUVER, BRITISH COLUMBIA--(Marketwire - April 28, 2009) - Goldsource Mines Inc. ("Goldsource" or the "Company") (TSX VENTURE:GXS) is pleased to report positive initial washability test results for the Border Coal Project ("Border"), located near Hudson Bay, Saskatchewan, Canada. The washability test work was completed by Loring Labs of Calgary, Alberta on several representative composites of drill core samples from the Pasquia 02, Pasquia 05, Chemong 03 and Chemong 06 Areas (see attached map: http://media3.marketwire.com/docs/gx... ).

J. Scott Drever, President stated; "These preliminary washability results are certainly impressive in that they demonstrate that the coal at Border can be significantly upgraded with respect to its ash and sulphur content and calorific (heat) values. The tests are also important in that they indicate that much of the material that has been categorized as carbonaceous mudstone may, in fact, contain significant quantities of good quality coal which could provide a significant contribution to any potential resource base and the overall economics of the project."

Coal washability tests are carried out to examine the cleaning characteristics of individual coals. These studies closely follow ASTM test methods for determining coal washability characteristics by a variety of methods to determine the practicality of producing a final product with a lower ash and sulphur content and a higher BTU or calorific value. Analyses can be carried out over a range of washing medium densities from 1.3 to 2.25 specific gravity and variety of sizes from coarse sizes to fine coal separation. Washability test data provides information on the types and amounts of impurities, determines the potential for recovery and quality of washed, clean coal and assists in determining optimum operating parameters for plant circuit design.

The Border composite samples from drill core were selected to test the beneficiating characteristics of intervals of better quality, lower ash coal (less than 25%) as well as intervals of carbonaceous materials that exhibited higher ash content. The samples were washed at specific gravities ranging from 1.4 to 1.7. A summary of results is presented in the following table.

---------------------------------------------------------------------
                      Recov-   Moisture %       Ash %       Sulphur %
                      ery %      (ad)(i)       (ad)(i)       (ad)(i)
                      -----------------------------------------------
           Hole        Wash-  Orig-  Wash-  Orig-  Wash-  Orig-  Wash-
Area       Number        ed   inal     ed   inal     ed   inal     ed
---------------------------------------------------------------------
Pasquia 02 BD08-02     86.3    6.1    3.9   19.2   16.3    1.3    1.1
           BD08-02     73.9    5.3    3.2   25.1   18.2    1.5    1.0
---------------------------------------------------------------------
Pasquia 05 BD08-05     52.6    7.4    3.6   37.9   34.4    3.0    2.5
---------------------------------------------------------------------
Chemong 03 BD08-03A    76.6   15.1    5.1   14.7   10.4    2.5    1.5
           BD08-03A    69.5   13.6    3.8   13.2   10.5    1.6    1.6
           BD08-03A    71.2   15.6    5.8   18.7   11.3    2.8    2.3
---------------------------------------------------------------------
Chemong 06 BD08-06A    34.5    4.1    3.7   49.1   20.7    0.6    2.3
           BD08-06A    84.7   10.5    5.0   17.1   13.9    2.1    1.7
           BD08-06A    91.3   10.4    4.3   15.0   12.6    2.9    2.4
           BD08-06A    80.3    6.4    4.3   24.2   20.0    2.5    2.8
---------------------------------------------------------------------
---------------------------------------------------------------------
           Average     72.1    9.4    4.3   23.4   16.8    2.1    1.9


-----------------------------------------------------
                    Calorific Value          Upgraded
                       KJ/Kg (ad)(i)  BTU/lb       CV
                    ------------------------   change
           Hole        Orig-   Wash-    Wash-      of
Area       Number      inal      ed       ed        %
-----------------------------------------------------
Pasquia 02 BD08-02    20643   21148    9,092     2.4%
           BD08-02    17991   19333    8,311     7.5%
-----------------------------------------------------
Pasquia 05 BD08-05    15825   18395    7,908    16.2%
-----------------------------------------------------
Chemong 03 BD08-03A   20370   23562   10,129    15.7%
           BD08-03A   20861   23450   10,081    12.4%
           BD08-03A   18823   23610   10,150    25.4%
-----------------------------------------------------
Chemong 06 BD08-06A   12779   22333    9,601    74.8%
           BD08-06A   20589   22554    9,696     9.5%
           BD08-06A   22201   24336   10,462     9.6%
           BD08-06A   20114   21616    9,293     7.5%
-----------------------------------------------------
-----------------------------------------------------
           Average    19020   22034    9,472    15.8%

(i) ad equals air dried

A composite from hole BD08-06A which had a high ash content of 49.1% and was considered to be a carbonaceous mudstone showed an impressive increase in calorific value after washing from 12,779 (5,500 BTU/lb ad) to 22,333 kj/kg (9,600 BTU/lb ad). While the majority of the coal discovered so far at Border is good quality, thermal coal, there is a significant amount of high ash (greater than 30%), carbonaceous coaly material that potentially could be washed and upgraded to add to any overall potential coal resources. Noteworthy is the comparison of the "as received" coal moistures of 24.8% to 37.9% (press release dated November 11, 2008) to the moisture content of the "air dried" values of 5.3% to 15.6% and the washed product of 3.2% to 5.8% moisture in the above table. This considerable reduction in moisture makes a significant positive impact on the calorific values of the coal. Preliminary indications suggest that there is high "surface" moisture content and relatively low "inherent" moisture in the coal which allows for substantial beneficiating of the coal through washing and air drying. Additional washability testing and review is planned to further determine the applicability of this process to the coal at Border.

Generally, these initial results from last summer's drilling show that the coal at Border can be potentially upgraded to a higher quality product for the receiving markets with an increase in calorific value and decrease in ash and sulphur content. Also, preliminary results show that high ash content, carbonaceous coaly mudstones may potentially be washed to create a marketable product, which could have a significant positive impact on project economics. Further detailed test work is planned on the coal zone intervals recovered during this winter's program and the results will be released once they are received and compiled.

N. Eric Fier, CPG, P.Eng. and Qualified Person for this news release has reviewed and approved its contents.

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