Mr. Marc LeVier reports

GREAT WESTERN MINERALS GROUP REPORTS YEAR-END 2013 RESULTS AND PROVIDES PROJECT UPDATE

Great Western Minerals Group Ltd. (GWMG) has released its fourth quarter and full-year financial results through Dec. 31, 2013, and has provided an update on the company's activities.

Highlights and results

Strong top-line performance

Fourth quarter revenue increased more than 86 per cent to $5.2-million over the prior year period on strong alloy sales as a result of increased manufacturing capacity and enhanced capabilities. For the full year 2013 period, revenue increased 10.8 per cent to $17.4-million. Company revenue was primarily attributable to its production subsidiary Less Common Metals Ltd. (LCM).

SKK feasibility study progressing well

The company plans to take a few extra weeks to perform value engineering to optimize capital expenditure requirements for the SKK project. It expects to report results of the study by May 1, 2014.

Advanced corporate-wide objectives and strategy

Monthly cash outlays were significantly reduced with aggressive expense management and a continued focus on core assets, which was further supported with the executed joint venture agreement on the Hoidas Lake project and the planned closing of Great Western Technologies Inc. (GWTI).

Marc LeVier, company president and chief executive officer, commented: "Two thousand thirteen and the start of this year can be described as a period of measurable change and progress. We have reduced costs and focused our efforts and resources on the work that will support our mine to metals strategy. Our efforts have put the work process in proper sequence to advance the project and provide for long-term success."

Mr. LeVier added: "We are starting to see the benefits of our capacity and capability enhancements at LCM with increased customer orders. At SKK, we laid out an aggressive plan to get us on the path toward production and have been successful in advancing our objectives. We completed a new NI 43-101-compliant technical report and upgraded mineral resource estimate, optimized the metallurgical process, completed a successful mini-pilot plant test, and the SKK feasibility study is in the final stages of review efforts. We believe we have the right-sized operation and right-sized business model to succeed."

Manufacturing services

Manufacturing services revenue was $5.2-million in the fourth quarter of 2013, an 86.2-per-cent, or $2.4-million, increase from the same period in the prior year as higher volumes more than offset declining alloy prices. A slowdown in sales near the end of 2012, as customers prepared for price decreases, also contributed to the year-over-year change. In the recent quarter, the company sold 85 metric tonnes of alloys compared with 37 metric tonnes of alloys for the same period in 2012. The increase was primarily due to the company being able to sell bulk quantities of strip-cast alloys following full qualification with key customers in 2013. Fourth quarter gross margin improved to $800,000, or 15.9 per cent of sales, from $300,000, or 10.8 per cent of sales, in the fourth quarter of 2012. The increase was due to the leverage on higher volume and specialty alloy sales during the period which have historically been at higher margins.

For the full year 2013 period, the company had revenue of $17.4-million, an increase of 10.8 per cent over the 2012 period, which reflects 284 metric tonnes of alloys sold compared with 198 metric tonnes in 2012. The company's gross margin remained relatively constant at $4.4-million in 2013 compared with $4.3-million in 2012, though as a percentage of revenue, gross margin declined to 25.6 per cent from 27.1 per cent in the prior-year period. The margin contraction was due to lower alloy prices.

The manufacturing services segment generated a loss of $2.9-million in 2013 compared with a loss of $1.9-million in 2012. The change was mostly attributable to an increase in depreciation and amortization of $700,000 as a result of the new LCM facility and furnaces that were put into production, and an impairment of property, plant and equipment of $200,000 related to redundant assets at LCM.

Alloy volumes are anticipated to increase over the prior years now that the new furnaces at LCM are fully commissioned and customers expand their orders, although growth will continue to be limited by the company's ability to obtain the necessary rare earth materials at competitive pricing. Once the SKK project has commenced production, the company expects this limitation will be removed.

The company will be discontinuing the operations of its GWTI business unit located in Troy, Mich., and will attempt to liquidate the assets in the coming months.

Mr. LeVier added: "The board and management team have been conducting an extensive review to identify inefficiencies in our operations in order to lower our overhead and capital outlays. GWTI has struggled with losses and, given our strong position with LCM, the board felt this action was prudent and an important step that will eliminate redundancy and better streamline the organization for improved efficiencies."

The GWMG board of directors approved the closing and redundant asset liquidation on March 20, 2014.

Steenkampskraal project

The company expended $7.6-million in 2013 on various technical studies, mine site exploration and evaluation investigations, the October, 2013, resource estimate, finalization of the PEA, the final phase of infill drilling and underground sample collection for higher density resource data, development of a robust structural geology model, metallurgical test works, and commencement of the SKK feasibility study. Comparatively, in 2012, GWMG expended $10.8-million predominantly on exploratory drilling and various technical studies.

During the year, GWMG also initiated exploration activities on an approximately 55,000-hectare prospecting right surrounding the SKK project. Work included geologic mapping, 10 channel sample lines crossing monazite veins in historic trenches for a total of 126 rock samples and 49 quality control samples, ground radiometric surveys, and a combined airborne high-resolution magnetic and radiometric geophysical survey of the area. Geophysical and geological interpretation of the radiometric survey data along with preliminary evaluation of assay results have identified several anomalies that may be related to REE (rare earth element) mineralization.

The October, 2013, resource estimate, which is one of the foundations for the SKK feasibility study, increased the measured and indicated mineral resources to 86,900 tonnes of total rare earth oxides including yttrium oxide (16,600 tonnes of measured and 70,300 tonnes of indicated) and upgraded a significant amount of the December, 2012, resource estimate from the indicated and inferred categories to the measured and indicated categories.

The company is currently evaluating a variety of financing options as well as alternatives to reduce capital outlays. This includes evaluating toll separation alternatives to defer certain upfront capital costs and shorten timelines. Until such time as the financing is secured, the company will manage its current cash position to best support key lines of progress at the SKK project.

Liquidity

The company's cash and cash equivalent position at Dec. 31, 2013, was $23.6-million compared with $28.3-million at Sept. 30, 2013. The company continues to take a prudent approach to expense management and has significantly reduced its monthly cash outlays following various operational efficiency initiatives. During the first half of 2013, GWMG averaged cash outlays of approximately $3.0-million per month. This significantly improved to $1.8-million during the second half of 2013.

The company believes that its current capital level will allow it to perform certain compliance work, undertake necessary engineering and technical studies to complete the SKK feasibility study and make its scheduled interest payments for 2014.

Qualified persons

Victor-Mark Fitzmaurice, PrEng, MEngineering (mining), managing director of Rare Earth Extraction Co. Ltd. and Steenkampskraal Monazite Mine (Pty.) Ltd., and Brent C. Jellicoe, BSc (honours), PGeo, chief geologist for Steenkampskraal Monazite Mine (Pty.) Ltd., are the qualified persons (as defined in NI 43-101) responsible for supervising the preparation of the technical content of this news release.

Teleconference and webcast

The company will host a conference call and webcast to review its results, key market initiatives and business strategy on Friday, March 21, 2014, at 11 a.m. ET. A question-and-answer session will follow.

The conference call can be accessed by calling 201-689-8471. The live listen-only audio webcast can be monitored on the company's website, where it will be archived afterwards, along with a transcript once available.

A telephonic replay will be available from 2 p.m. ET the day of the teleconference until Friday, March 28, 2014. To listen to the archived call, dial 858-384-5517 and enter replay pin No. 13577672.

           CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
                      For the three months ended      For the years ended
                               Dec. 31,                   Dec. 31,
                          2013          2012          2013          2012
                                       Recast                      Recast

Sales                   $5,193,526    $2,789,613   $17,385,056   $15,687,298
Cost of sales            4,366,563     2,487,218    12,941,697    11,435,785
                      ------------  ------------  ------------  ------------
Gross margin               826,963       302,395     4,443,359     4,251,513
                      ------------  ------------  ------------  ------------
Operating expenses
General and
administration             150,327     1,258,745     3,776,047     4,109,182
Wages and benefits       1,694,610     4,186,612     7,428,157     9,071,977
Stock-based
compensation              (107,695)     (426,806)      633,529     2,109,921
Professional fees          202,898       689,539     1,885,563     2,640,732
Investor relations          51,922       189,584       227,049       369,706
Occupancy                1,020,873     1,427,530     2,642,684     2,876,508
Depreciation and
amortization               640,251       142,855     1,750,362       875,137
Exploration and
evaluation               1,541,859     3,173,050     7,720,713    12,364,859
Property research                -       124,498             -       154,647
Impairment of
property, plant
and equipment               83,203     1,204,702       236,690     6,469,890
Exchange loss            1,481,306       269,949     1,982,704        21,458
                      ------------  ------------  ------------  ------------
                         6,759,554    12,240,258    28,283,498    41,064,017
Other
Interest expense
and finance costs       (3,671,249)   (3,076,497)  (12,866,488)  (10,359,682)
Interest income            (34,223)      116,635       104,040       262,061
Gain on conversion
option                     130,114    15,561,981     7,047,954    26,528,477
Other income
(expense)                   11,638        (7,913)       33,636       147,036
                      ------------  ------------  ------------  ------------
(Loss) income before
income taxes            (9,496,311)      656,343   (29,520,997)  (20,234,612)
Income tax recovery
(expense)                   (4,199)      802,976       110,956       715,929
                      ------------  ------------  ------------  ------------

Net income (loss)      $(9,500,510)   $1,459,319  $(29,410,041) $(19,518,683)

Other comprehensive
income (loss)
Items that may be
reclassified to
profit and loss
Translation
adjustment                 970,388      (478,201)   (1,172,623)   (2,114,079)
                      ------------  ------------  ------------  ------------
Other comprehensive
income (loss)              970,388      (478,201)   (1,172,623)   (2,114,079)
                      ------------  ------------  ------------  ------------
Total comprehensive
income (loss)          $(8,530,122)     $981,118  $(30,582,664) $(21,632,762)
                      ============  ============  ============  ============
Basic and fully
diluted income
(loss) per share           $(0.023)       $0.003       $(0.070)      $(0.047)
                      ============  ============  ============  ============

We seek Safe Harbor.