Gossan and Owner of High Efficiency Magnesium Production Process Fail to Conclude Definitive Agreement

Gossan Resources Limited (TSX VENTURE:GSS)(FRANKFURT:GSR)(Frankfurt/Freiverkehr
& Xetra:WKN 904435) holds a large, NI 43-101, high-purity, magnesium-rich
dolomite deposit near Inwood Manitoba. The Inwood Magnesium Project has been
advanced over the past several years based on the expectation for higher
magnesium prices and the development of more efficient magnesium extraction
processes.


On March 7, 2007, Gossan entered into a Memorandum of Understanding to
collaborate on the development of a new high efficiency magnesium production
process being developed by Douglas J. Zuliani with an option to acquire a 100%
interest in the worldwide rights to the technology. In September 2007, Gossan
announced the successful completion of thermodynamic modeling of the Zuliani
Process by Dr. Arthur Pelton of Thermfact utilizing the world leading FactSage
system. Thereafter, three phases of progressive bench scale testing were
conducted at Process Research Ortech with favourable results announced in May
2009, September 2009, and April 2010. However it was not possible to conduct
further testing to advance the process due to the scarce availability of a
specialized furnace. Over the past three years, Gossan has held numerous
negotiations with Dr. Zuliani concerning the possible purchase of the technology
and retention of Dr. Zuliani as a consultant, as well as, a revenue sharing
model. During this period, the Company was not able to complete its due
diligence to its satisfaction nor reach a final agreement that was in the
interest of the Company. On March 1, 2013, the Company was advised by Dr.
Zuliani that he would not accept Gossan's latest offer pertaining to the ongoing
development and commercialization of the Zuliani Process for the primary
production of magnesium metal and the original agreement (the 2007 Memorandum of
Understanding) had expired. Dr. Zuliani advised that he remains open to
consideration of another offer.


At the current time considerable uncertainty has developed regarding the outlook
and future of the magnesium market. In January 2013, the USGS reported that
magnesium production declined in 2012 from 771 to 750 thousand metric tonnes.
China produces about 85% of the world's magnesium. As of January 1, 2013, China
dropped its 10% export duty on magnesium ingot which has resulted in a softening
of magnesium prices. Industry commentators had expected that if the export duty
was eliminated to satisfy a WTO ruling, it would be effectively and
simultaneously replaced by other WTO-acceptable taxes. To date China has not
introduced any new taxes affecting the magnesium industry which as a result has
clouded the outlook for magnesium prices. However on February 19, 2013, it was
reported that the Tax Policy Division of the Chinese Ministry of Finance will in
the future introduce a levy on carbon dioxide emissions for collection by local
taxation authorities. The implications of this future potential tax, if
introduced, are unknown.


The USGS also reported a significant shift in magnesium production within China
in order to significantly reduce production costs by utilizing re-cycled waste
residual gas from coking operations as a fuel source rather than coal. As coal
is a major input cost, the effect on Chinese production costs could be
significant and when coupled with the elimination of the 10% export duty would
materially erode the expected direct costs savings of magnesium production in
Canada using the Zuliani Process in comparison to direct cost of Chinese
magnesium ingot landed in western markets. The viability of utilizing the
Zuliani Process in emerging markets is harder to assess. 


Gossan Resources Limited is engaged in mineral exploration and development in
Manitoba and northwestern Ontario. It has a well-diversified portfolio of
properties hosting gold, platinum group and base metals, as well as the
specialty and minor metals, vanadium, titanium, tantalum, lithium and chromium.
The Company also has a large deposit of magnesium-rich dolomite and a silica
frac sand deposit. The company trades on the TSX Venture and the
Frankfurt/Freiverkehr & Xetra Exchanges and has 33,170,400 common shares
outstanding.


For further information, please bookmark www.gossan.ca.

FOR FURTHER INFORMATION PLEASE CONTACT: 
Gossan Resources Limited
Douglas Reeson
Chairman & CEO
[phone]
[e-mail]
www.gossan.ca