Goldsource Mines Inc. Signs Definitive Arrangement Agreement With Zero Emission Energy Plants Ltd.

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THE UNITED STATES


Goldsource Mines Inc. ("Goldsource") (TSX VENTURE:GXS)(FRANKFURT:G5M) is pleased
announce that Goldsource and Zero Emission Energy Plants Ltd. ("ZEEP") have
entered into a definitive arrangement agreement dated August 24, 2011 (the
"Arrangement Agreement") in connection with the arm's length business
combination of Goldsource and ZEEP previously announced on July 11, 2011. 


About Goldsource

Goldsource is a publicly-listed Canadian resource company engaged in the
exploration and development of Canada's newest coal field in the province of
Saskatchewan. Goldsource is responsible for recently identifying one of the
country's most promising new coal deposits in Eastern Saskatchewan and has to
date outlined more than 79 million tonnes of indicated, 33 million tonnes of
inferred and 61 million tonnes of speculative good quality, sub-bituminous
thermal coal resources. Headquartered in Vancouver, British Columbia, Goldsource
is managed by experienced mining and business professionals.


About ZEEP

ZEEP is a private Bermuda company at arm's length to Goldsource that was founded
in 2008 to commercialize and deploy certain gasification technologies (the "PWR
Technology") developed by Pratt & Whitney Rocketdyne, Inc. ("PWR"). 


Gasification is an environmentally friendly method to use petroleum coke
("petcoke"), coal or biomass to generate synthetic gas ("syngas") which, in
turn, can be efficiently converted to end products such as hydrogen, chemical
feedstocks, transportation fuels or synthetic natural gas. Carbon dioxide, and
other pollutants otherwise generated through the traditional combustion of coal
are contained in the gasification process and can be sold as valuable
by-products.


ZEEP holds a world-wide license to use the PWR Technology and intends to
commercialize the PWR Technology by building, owning and operating gasification
facilities in "energy centres" that convert coal, petcoke or biomass into a wide
variety of high quality end-products such as hydrogen, carbon monoxide, carbon
dioxide, methanol, gasoline and electricity. ZEEP also intends to acquire and
develop coal resources that can be processed in its poly-generation energy
centres. ZEEP also plans to sub-license the PWR Technology to other project
developers.


ZEEP is managed by a team of professionals with extensive experience in
gasification technologies and the acquisition and development of large energy
projects. For further information please go to www.ZEEP.com. 


The Arrangement Agreement

The Arrangement Agreement contemplates the following (collectively, the
"Transactions"): 




--  under the terms of the Arrangement Agreement, Goldsource and ZEEP will
    effect a business combination whereby ZEEP will acquire all of the
    issued and outstanding common shares ("Goldsource Shares") of Goldsource
    in exchange for 1.2727 Class A common shares ("ZEEP Shares") of ZEEP for
    each Goldsource share held, and Goldsource will become a wholly-owned
    subsidiary of ZEEP (the "Arrangement"); 
--  any warrants to acquire Goldsource Shares, if outstanding immediately
    prior to the effective time of the Arrangement, shall remain outstanding
    and exercisable for ZEEP Shares in accordance with the warrant
    adjustment provisions contained in the terms of such warrants; 
--  each stock option to acquire a Goldsource Share shall be exchanged for a
    ZEEP replacement stock option to purchase such number of ZEEP Shares
    equal to the number of Goldsource Shares that were the subject of such
    Goldsource stock option so exchanged multiplied by 1.2727. The exercise
    price, the term to expiry and vesting schedule of each ZEEP replacement
    stock option shall be the same as that of the Goldsource stock option; 
--  a new management team will be appointed led by Ronald E. Oligney as
    Chief Executive Officer and Bradley J. Thomson as Chief Financial
    Officer (the "New Management") (see biographical information below); 
--  a new board of directors will be comprised of three representatives of
    ZEEP, Ronald E. Oligney, Bruce A. Bernard and Barry A. Williamson, two
    representatives of Goldsource, J. Scott Drever and Steven B. Simpson, as
    well as two independent directors to be mutually agreed upon by ZEEP and
    Goldsource (the "New Directors") (see biographical information below); 
--  ZEEP shall have completed a financing for minimum aggregate proceeds of
    $10,000,000; and 
--  ZEEP will be continued into the Province of Alberta under the name "Zero
    Emission Energy Plants Ltd.".



Completion of the Arrangement is subject to the satisfaction of a number of
conditions under the Arrangement Agreement, including receipt of the approval of
the TSX Venture Exchange (the "Exchange") to the listing of the ZEEP shares,
approval of the Arrangement and election of the New Directors by not less than
50% of the votes cast at the ZEEP shareholder meeting, approval of the
Arrangement by not less than two-thirds of the votes cast at the Goldsource
shareholder meeting, approval by the Supreme Court of British Columbia (the
"Court"), receipt of all other required regulatory and third party approvals and
consents; and such other conditions as may be required to complete and effect
the Arrangement. 


Goldsource has also requested an exemption from the sponsorship requirements of
the Exchange. Goldsource's information circular is expected to be mailed to
Goldsource shareholders in late September and the special meeting of Goldsource
shareholders is expected to be held on or about October 18, 2011. ZEEP's
information circular is expected to be mailed to ZEEP shareholders in late
September and the special meeting of ZEEP shareholders is expected to be held on
or about October 14, 2011. The Transactions are expected to close on or about
October 20, 2011 assuming that Goldsource and ZEEP receive the requisite
approvals and all of the conditions to closing are satisfied. 


The terms of the Arrangement Agreement provide for termination of the
Arrangement Agreement and the Arrangement if the Transactions are not completed
by an outside date of October 21, 2011, unless extended by the parties. In
addition to the terms of the Arrangement Agreement discussed above, the
Arrangement Agreement contains reciprocal, non-solicitation covenants, customary
representations, warranties, covenants and conditions and provides for
reciprocal non-completion fees under certain circumstances of $250,000 or a
reimbursement of costs of up to $250,000. The complete Arrangement Agreement
will be accessible under Goldsource's profile on SEDAR at www.sedar.com. 


ZEEP Financings

As a condition to the completion of the Arrangement, ZEEP must complete a
financing for minimum aggregate proceeds of $10,000,000. ZEEP is currently
undertaking a non-brokered private placement (the "ZEEP Private Placement") of
units (the "Units") at a price of $0.55 per Unit for gross proceeds of up to
$5,000,000. Each Unit consists of one ZEEP Share and one-half of one common
share purchase warrant of ZEEP, each whole warrant entitling the holder thereof
to purchase one ZEEP Share at a price of $0.70 for a period of not more than two
years from the date of issuance of such warrant. In addition, ZEEP is expected
to commence a brokered private placement (the "ZEEP Financing") that, when added
to the gross proceeds of the ZEEP Private Placement will aggregate not more than
$15,000,000 and the terms of which will be announced upon the entering into of
the engagement agreement with an agent for such financing.


Upon completion of the ZEEP Private Placement and the ZEEP Financing, it is
expected that ZEEP will have raised the minimum aggregate proceeds of
$10,000,000, meeting the condition to the completion of the Arrangement. The net
proceeds from the ZEEP Private Placement and the ZEEP Financing will be used to
fund ZEEP's business objectives. 


New Management Team and New Board of Directors

The New Management and the New Directors bring a long and successful track
record in the resource and energy industry and have the experience and expertise
needed to finance, build and operate large-scale commercial clean energy
facilities for the on-going business of ZEEP. Upon completion of the
Transactions the following persons are expected to comprise the New Management
and the New Directors of ZEEP.


Ronald E. Oligney, Director and Chief Executive Officer 

Mr. Oligney founded, built, and served as a Director and Chairman of various
energy and environmental companies, private and public, for 20 years. Most
recently, Mr. Oligney was the Chief Executive Officer and, subsequently, the
Chairman, of Opal Energy Corp., a company listed on the Exchange. Mr. Oligney
has been an advisor to the Clinton and Bush Administrations, the State of Texas,
Fortune 500 companies, and national oil companies. He is co-author of the
international best selling book, "The Color of Oil". Mr. Oligney has a BS in
Petroleum Engineering from the University of Alaska and a MSc. in Science and
Technology Journalism from Texas A&M University. 


Barry A. Williamson, Director 

Mr. Williamson is an attorney who has extensive experience at the federal and
state government levels. Mr. Williamson has served as Vice Chairman of the
Interstate Oil and Gas Compact Commission and as Chairman of its Legal and
Regulatory Affairs Committee. He also served as a member of the Texas High Speed
Rail Authority. He was past Chairman of the Texas Alternative Fuels Council, a
member of the Texas Coastal Coordination Council and served on the Gas Committee
of the National Association of Regulatory Utility Commissioners. Most recently,
Mr. Williamson was the Chief Executive Officer of Tejas Inc. Mr. Williamson
graduated from the University of Arkansas and received his J.D. from the
University of Arkansas Law School. 


Bruce A. Bernard, Director and Executive Vice President 

Mr. Bernard was employed with Tejas Power Corporation in the late 1980s where he
developed the "Tolling-PLUS" business strategy. Mr. Bernard applied this
business strategy at Cheniere Energy, shepherding growth of the company from
US$20 million to over US$2 billion between 2001 and 2004. He acted as lead
consultant for Lodi Gas Storage, which grew from US$37 million to US$250
million. Mr. Bernard was co-founder and Chief Executive Officer of RRC Leasing,
LP and Chief Executive Officer of Bruce A. Bernard Consulting, Inc. Mr. Bernard
received a BS in Mechanical Engineering from Louisiana Tech University. 


Bradley Thomson, Chief Financial Officer 

Mr. Thomson is a Chartered Accountant with over 25 years experience in senior
finance and corporate development roles. He was an officer of a number of fast
growth businesses including TransCanada Corp., TransCanada Power LP, Metronet
Communications and the Northridge Group of Companies. He currently serves on the
Board Of Directors of CE Franklin Ltd. and previously served on boards such as
The Canadian Electrical Association, Bruce Power Inc. and CCS Income Trust. Mr.
Thomson received a Bachelor of Commerce from the University of Calgary and is a
member of the Alberta Institute of Chartered Accountants and the Canadian
Institute of Corporate Directors. 


J. Scott Drever, Director

Mr. Drever has 45 years of business experience and geological expertise. He has
dealt extensively with strategic planning, mergers & acquisitions, and
operations for international mining corporations. Mr. Drever has served as an
Executive Officer and Director of a number of public companies listed on the TSX
and the TSX Venture Exchange, including Placer Dome Ltd., Blackdome Mining
Corp., and SilverCrest Mines Inc. Since 2003, Mr. Drever has been the Chairman
and President of SilverCrest Mines Inc., a mineral exploration, development and
production company and since 1995, and has been the President of Nemesis
Enterprises Ltd., a management consulting company.


Steven B. Simpson, Director

Mr. Simpson has been a consultant of Triton Advisory Group, a Singapore based
investment firm, since 2001. Mr. Simpson has been an Australian certified
practicing accountant (CPA) since 1977. He is also a Chartered Secretary and
member of the Institute of Directors. He is a Commerce graduate from the
University of New South Wales and is a former partner of Price Waterhouse (now
PriceWaterhouseCoopers LLP) in both the Australian and Asian markets.


Mr. Simpson sits on the board of publicly-listed companies and is a member of
audit committees in Singapore for such companies. Mr. Simpson is a principal of
Triton Advisory Group, a mergers and acquisitions, fixed income trading, asset
management and corporate advisory group located in Singapore.


Philip E. Lewis, Chief Technology Officer 

Mr. Lewis has been directly involved in resource development as an owner,
manager and technical services provider for over 30 years. Mr. Lewis has served
as an executive for several private US oil and gas companies and the Chief
Operating Officer of Texas Energy Center. He developed and marketed FraPS, the
first reservoir simulator available on personal computers, and was a chief
architect of FRACPRO, the dominant hydraulic fracture design program. These
programs are in use at many major oil companies around the world. He has
provided web-based management solutions to the large drilling contractors and
producers in the Gulf of Mexico and the North Sea, an expertise that he
translated to other major capital-intensive endeavors such as Wal-Mart's
construction program. Mr. Lewis has designed and constructed a pilot-scale
fluidized bed coal combustor for characterization of Mid-Continent coals. He is
a registered professional engineer and received his MSPE from the University of
Houston, MSChE from the University of Tulsa and BSChe from the University of
Oklahoma. 


Bryce C. Tingle, Corporate Secretary 

Mr. Tingle is involved in various capacities with several early stage companies
in the finance sector. Mr. Tingle was a partner of TingleMerrett LLP from 1994
to December 2006. He was the general counsel of a private oil and gas company
from 2006 to 2008. Since 2008, Mr. Tingle has served as a consultant and
director of ZEEP as well as consulting with a variety of other public and
private companies. Mr. Tingle received his LL.B. from the University of Alberta,
a Master of Law (E-Business) from Osgood Hall Law School, York University and a
Master of Law from Duke University Law School. He is an instructor at the
University of Calgary Law School and has taught at other U.S. and Canadian law
schools. He is a member of the Securities Advisory Committee of the Alberta
Securities Commission.


It is expected that two additional independent directors will be confirmed prior
to the mailing of the respective management information circulars to each of the
Goldsource shareholders and the ZEEP shareholders. Biographies and further
details of the two additional independent directors will be provided once
available.


Proposed Capitalization 

Goldsource currently has 27,033,729 Goldsource Shares outstanding and ZEEP
currently has 87,014,237 ZEEP Shares outstanding and 18,606,879 Series I
preferred shares outstanding. Under the terms of the Arrangement Agreement, each
outstanding Goldsource Share will be exchanged for 1.2727 ZEEP Shares, resulting
in the issuance of approximately 34,405,826 ZEEP Shares to the Goldsource
shareholders. In addition, immediately prior to the completion of the
Arrangement, it is expected that all of the ZEEP Series I preferred shares will
be converted into ZEEP Shares on a 1 for 1 basis, resulting in the issuance of
18,606,879 ZEEP Shares. Assuming the completion of the ZEEP Private Placement
for gross proceeds of $2.5 million and the completion of the ZEEP Financing for
gross proceeds of $10 million, it is estimated that an aggregate of an
additional 22,727,272 ZEEP Shares will be issued. 


Based on the assumptions outlined above, it is expected that immediately upon
completion of the Transactions there will be approximately 162,754,200 ZEEP
Shares outstanding, of which approximately 18.4% will be held by former
Goldsource shareholders on an undiluted basis (and Goldsource security holders
holding 23.1% on a fully diluted basis). 


Corporate Strategy

Upon completion of the Transactions, ZEEP will have an experienced management
team and a board of directors with relevant experience to commercialize
gasification technologies and to finance, build and operate large-scale
commercial clean energy facilities. Upon completion of the Transactions, ZEEP's
business objectives will be to:




--  monetize the PWR Technology represented by the licence agreement between
    PWR and ZEEP, leveraging this position into project value and generating
    direct sublicensing revenues; 
--  build, own and operate gasification facilities and energy centers, using
    a series of project companies to minimize early dilution of
    shareholders; and 
--  lock-up and develop strategic energy resources, specifically coal, which
    can be acquired at attractive prices and then monetized using the PWR
    Technology and ZEEP's project development capabilities.



ZEEP also plans to continue the 2011 exploration program on the the coal
deposits held by Goldsource located in the Province of Saskatchewan commenced by
Goldsource in August 2011. The program's objective is to expand the Border coal
resource base by conducting drilling of up to 10 diamond drill holes to test new
coal targets and expand previously defined targets based on Goldsource's
proprietary geophysical information. 


Fairness Opinion 

The board of directors of Goldsource retained retained Ross Glanville &
Associates Ltd. and Bruce McKnight Minerals Advisor Services to provide a
fairness opinion in connection with the Transactions. Based upon and subject to
the scope of the review, analysis undertaken and various assumptions,
limitations and qualifications set forth in such fairness opinion, Ross
Glanville & Associates Ltd. and Bruce McKnight Minerals Advisor Services were of
the opinion that the ZEEP Shares to be received by the Goldsource shareholders
pursuant to the Arrangement is fair, from a financial point of view.


Boards of Directors' Recommendations

The board of directors of each of Goldsource and ZEEP has considered the
Transactions and other matters and has, based upon the fairness opinion provided
to Goldsource and on the opinion of each party's board of directors, unanimously
determined that the Arrangement is fair to their respective shareholders and is
in the best interests of Goldsource and ZEEP, respectively, and recommends that
their respective shareholders approve the Arrangement and the Transactions.
Members of the board of directors and officers of each of Goldsource and ZEEP
have agreed to enter into support agreements in which they will have agreed,
among other things, to vote in favour of the Arrangement, subject to certain
conditions. 


Trading Halt

Trading of the Goldsource Shares has been halted pending finalization of the
terms of the Arrangement and this news release describing the Transactions.
Trading of the Goldsource Shares is expected to resume upon the completion of
the ZEEP Financing which is expected to occur sometime in late September, 2011. 


The securities described herein have not been and will not be registered under
the U.S. Securities Act of 1933, as amended ("1933 Act") or any state securities
laws, and may not be offered or sold in the United States unless registered
under the 1933 Act or unless an exemption from registration is available.


Reader Advisory

Investors are cautioned that, except as disclosed in the Goldsource information
circular to be prepared in connection with the Transactions, any information
released or received with respect to the Transactions may not be accurate or
complete and should not be relied upon. Trading in the securities of Goldsource
and ZEEP should be considered highly speculative.


The proposed Transactions have not been approved by the TSX Venture Exchange and
remains subject to TSX Venture Exchange approval.


Completion of the Transactions are subject to a number of conditions, including
but not limited to, TSX Venture Exchange acceptance, shareholder approvals and
Court approval. The Transactions cannot close until the required approvals are
obtained. There can be no assurance that the Transactions will be completed as
proposed or at all. 


Except for statements of historical fact, this news release contains certain
"forward-looking information" within the meaning of applicable securities law.
Forward-looking information is frequently characterized by words such as "plan",
"expect", "project", "intend", "believe", "anticipate", "estimate", "budget",
"scheduled", "estimates", "forecast" and other similar words or variations
thereof, or statements that certain events or conditions "may", "could",
"would", "might" or "will" occur. In particular, forward-looking information in
this press release includes, but is not limited to, statements with respect to
timing and completion of the Transactions, the merits of the Arrangement,
timing, size and completion of the ZEEP Private Placement and the ZEEP
Financing, the satisfaction of the conditions precedent to the Arrangement
(including receipt of TSX Venture Exchange approval, shareholder approvals and
Court approval), the timing for calling and holding shareholders meetings of
Goldsource and ZEEP, the growth and business strategies, operational plans and
strategies and the timing thereof, development and exploration plans and
strategies and the timing and expected costs thereof, and future production
levels. Although we believe that the expectations reflected in the
forward-looking information are reasonable, there can be no assurance that such
expectations will prove to be correct. We cannot guarantee future results,
performance or achievements. Consequently, there is no representation that the
actual results achieved will be the same, in whole or in part, as those set out
in the forward-looking information.


Forward-looking information is based on the opinions and estimates of management
at the date the statements are made, and are subject to a variety of risks and
uncertainties and other factors that could cause actual events or results to
differ materially from those anticipated in the forward-looking information.
Some of the risks and other factors that could cause the results to differ
materially from those expressed in the forward-looking information include, but
are not limited to: additional funding required by ZEEP on an ongoing basis to
maintain the PWR License Agreement; utilizing and proving the PWR Technology on
a commercial scale for the first time; market competition against third parties
with greater financial and human resources; lack of exclusivity with respect to
the license of the PWR Technology; the protection of PWR's intellectual property
rights to the PWR Technology; the protection of ZEEP's intellectual property
rights; actual results of exploration activities; estimation or realization of
mineral reserves and resources; timing and amount of estimated future
production; costs of production; capital expenditures; costs and timing of the
construction of commercial gasification facilities and development of acquired
mineral deposits; requirements for additional capital; future prices of coal,
natural gas, oil and other petroleum products; possible variations in mineral
grade or recovery rates; failure of plant, equipment or processes to operate as
anticipated; accidents, labour disputes and other risks of the coal gasification
and mining industries; delays in obtaining governmental approvals, permits or
financing or in the completion of development or construction activities; title
disputes; claims limitations on insurance coverage; the timing and possible
outcome of pending litigation and the possibility of new litigation; risks
associated with international operations; risks related to joint venture
operations or other material customer or supply agreements; risks related to the
integration of acquisitions; fluctuations in the currency markets; changes in
national and local government legislation, controls, regulations and political
or economic developments in Canada, the United States or other countries in
which Goldsource or ZEEP carries on or may carry on business in the future;
operating or technical difficulties in connection with mining or development
activities; the speculative nature of the PWR gasification technology, mineral
exploration and development, including the risks of obtaining necessary licences
and permits.

In addition, there are risks and hazards associated with the business of coal
exploration, development and mining, including environmental hazards, industrial
accidents, unusual or unexpected geologic formations, pressures, cave-ins,
flooding (and the risk of inadequate insurance, or inability to obtain
insurance, to cover these risks). There are also certain risks related to the
consummation of the Arrangment and the business and operations of Goldsource
including, but not limited to, the risk that the businesses of Goldsource and
ZEEP may not be integrated successfully or that such integration may be more
difficult, time-consuming or costly than expected; the risk that the expected
combination benefits may not be fully realized or not realized within the
expected time frame; risks associated with realizing the increased earnings and
enhanced growth opportunities currently anticipated for ZEEP in the future;
risks associated with meeting key production and cost estimates by ZEEP;
construction and technological risks related to ZEEP; capital requirements and
operating risks associated with the expanded operations of ZEEP and the market
price of the ZEEP Shares. Readers are cautioned that this list of risk factors
should not be construed as exhaustive. 


The forward-looking information contained in this news release is expressly
qualified by this cautionary statement. We undertake no duty to update any of
the forward-looking information to conform such information to actual results or
to changes in our expectations except as otherwise required by applicable
securities legislation. Readers are cautioned not to place undue reliance on
forward-looking information.


This press release shall not constitute an offer to sell or the solicitation of
an offer to buy securities in the United States, nor shall there be any sale of
the securities in any jurisdiction in which such offer, solicitation or sale
would be unlawful. The securities to be offered have not been, and will not be,
registered under the U.S. Securities Act of 1933, as amended and may not be
offered or sold in the United States or to a U.S. person absent registration or
an applicable exemption from the registration requirements.