Galway Resources - Gold Mine - Colombia Gold

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California GALCA Victorio Carboluis Vetas

California

Galway has secured a significant land position consisting of 560 hectares (1,386 acres) of concessions in the California gold district of northeastern Colombia, one of the world's most exciting gold trends. The properties are located adjacent to and along strike with Ventana's La Bodega/La Mascota project, and 3 km from Greystar's Angostura project. Greystar Resources' Angostura gold deposit contains a National Instrument 43-101 ("NI 43-101") compliant measured and indicated resource of 11.5 million ounces of gold (plus 3.5 million ounces of inferred resources).

Drilling began on Galway's California project in December 2009, and there are currently 3 drills operating. The Company has released assay results from the first 25 drill holes from the first phase of diamond drill exploration. There is significant mineralization present across 850 meters of strike length. Seven of the first 25 drill holes have significant intercepts of approximately 1 oz per tonne gold or more, the thickest of which was 89 meters containing 3.2 g/t Au, while the highest grade was 109 g/t Au over 1.5 meters.

Some highlights from Galway's drill program include:

22.4 g/t Au and 164 g/t Ag over 4.5 m from GWY-01
including 32.8 g/t Au and 246 g/t Ag over 3m
11.7 g/t Au over 1.5m and 3.4 g/t Au over 3.3m from GWY-01
2.9 g/t Au over 31m, including 29.1 g/t Au over 1.5m from GWY-02
3.6 g/t Au over 10.5m from GWY-03
4.4 g/t Au over 6.0m including 1.5m of 15.5 g/t Au from GWY-06
30.0 g/t Au over 3.0m from GWY-07
3.2 g/t Au over 89m from, including 50 g/t Au over 3m GWY-10
109.5 g/t Au over 1.5m from GWY-19
9.9 g/t Au and 145.3 g/t Ag over 11.0m, including 30.4 g/t Au and 441.6 g/t Ag over 3.3m from GWY-22
7.6 g/t Au over 7.2m, including 14.3 g/t Au and 164.0 g/t Ag and 2.7% zinc over 3.0m from GWY-23
24.6 g/t Au and 254.5 g/t Ag over 3.0m, including 47.1 g/t Au and 430.0 g/t Ag over 1.5m from GWY-25

For a complete list of drill results released to date please refer to Table 1.

Galway has also announced analytical results of the Phase I outcrop sampling program. Galway's gold team has taken a total of 1,500 samples and historic data has been compiled.

High-grade gold/silver mineralization, up to 6 meters of 63 grams/tonne Au and 451 grams/tonne Ag, have been sampled. The Company is pleased to report the following sample results from the areas known as El Dorado, Machuca and Pie de Gallo.

El Dorado: An underground mine, located SW of the historic Pie de Gallo open pit, Galway sampling has returned 40.7 g./t Au and 752 g/t Ag in a 135 square meter area of silicified, brecciated quartz vein stockwork from 27 samples with an average channel sample width of 2 meters.. The mineralization is hosted in highly sheared, strongly silicified gneiss and intrusive porphyry. Veining is generally running east-west and northwest-southeast, dipping to the north. Mineralization remains open in all directions.

Machuca: Galway's 43 underground chip samples have returned an average of 3.85 g/t gold over 87m of tunnel, along a single grey siliceous vein with an approximate average true width of 0.4m. Included in these samples are 28m of 5.12 g/t Au including 2m of 34.92 g/t Au. Values across the zones range from 0.38 to 5.95 g/t Au in 27 samples. Host rocks for the mineralization are highly sheared and altered, strongly silicified gneiss and intrusive.

Pie De Gallo: A 300 meter-long open pit, that was mined in ancient times, by the Spaniards, and was the location of Anaconda Mining Company's exploration efforts in 1946-47. Galway's surface chip sampling has returned 14.2 g/t Au over 2.0m, included in a 33.5m SW-NE continuous line of samples that gave 2.84 g/t of gold and 11.74 g/t of silver. Historic sampling by Anaconda identified several areas of high grade gold mineralization including chip assays such as 15.55 g/t Au over 6.0m plus 8.23 g/t Au over 9.0m, (perpendicular to mineralization that also returned 20.37 g/t Au over 16.0m along it). The mineralization is hosted in dark grey siliceous veins up to 4.0m true width on surface hosted in a highly sheared and silicified intrusive and gneiss. Anaconda drilled six, shallow core holes under the pit in 1946-1947. Their assay data is unreliable due to a very low 20% core recovery.

Small-scale artisanal mining has gone on for hundreds of years within the boundaries of the newly-acquired concessions, and in the surrounding California gold district.

The 300 meter-long Pie De Gallo open pit, mined in ancient times, and which Galway now controls, also contains significant copper mineralization associated with gold.

California - An Emerging Gold Trend With Good Infrastructure
Drilling programs are currently being carried out by Greystar Resources (TSX-GSL) and by Ventana Gold (TSX-VEN). Galway's management believes that its properties have the potential to contain a gold and silver deposit similar in nature to Ventana's adjacent La Bodega deposit. The La Bodega project is located immediately adjacent to the east and northeast of Galway's concessions. Three kilometers to the northeast of Galway's concessions, along the same structural trend, is Greystar's Angostura deposit.

Location and Gold History
The district is located in the northern part of the Colombian State of Santander, in the municipality of California, 50 kilometers northeast of the city of Bucaramanga. The area has access by paved and gravel roads and available electricity. Gold mining in the district started in pre-colonial times with native Colombians, and continued through Spanish rule with the mining of high-grade veins and placers.

Historic data collected by Galway, including 500 geochemical samples, along with detailed mapping from Anaconda and Minercol (a government agency), strongly suggest a continuation of the Ventana-Greystar mineral trend to the southwest onto Galway's concessions.

In 1946-47, the Anaconda Mining Company examined a portion of the district for copper and gold, but left the area and the country when the Colombian civil war erupted. As part of this evaluation, Anaconda drilled 7 small diameter core holes on ground now controlled by Galway, but with only 20% core recovery. Anaconda also extensively sampled many of the small underground workings in the area, taking a total of 646 samples. Results of this work indicate gold and silver mineralization along structures ranging in grade up to 277 grams per tonne of gold and 579.4 grams per tonne of silver. 122 historical assays from various sources are greater than 0.5 g/t.

Geological Discussion
Mineralization at Galway's California area principally occurs as a series of north-northwest dipping parallel vein zones, breccias and mineralized faults. These mineralized structures are hosted within altered and variably silicified gneiss and intrusive rocks. The alteration, and nature of the mineralization, as described below, is similar throughout the area. The major controlling structure in the region is the La Baja fault which follows the river valley through the Angostura, La Bodega, and Galway areas. The structural setting is comparable to that described by Ventana Gold Corp.

Alteration and mineralization in the area is suggestive of a high sulfidation mineralizing system. Gold and silver mineralization is associated with structures which are silicified and contain pyrite in stockworks, stringers and breccias. These structures have in places been reactivated or sheared by the regional NE trending La Baja fault that cuts through the district. Structural intersections within the area have the potential to contain high grade shoots similar to those present elsewhere in the district. Gold mineralization at Galway's California properties is hosted within the same wide, northeast-trending fault zones as Ventana Gold Corp's neighboring La Bodega gold deposit and Greystar Resources' Angostura gold deposit.

California Deal Terms
Galway has acquired concessions in the California-Vetas gold district covering 561 hectares in California and 541 hectares in Vetas with combined payments of US$2.6 million and 2.5 million shares of Galway Resources. For California the terms extend over a three year period for 80% of the property, plus a pro rata payment of between 0.5% to 2%, payable in both cash and stock, of measured and indicated gold resource is also payable at the time of the exercise of the option.