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Glamis Doubles Gold Reserves at Penasquito Project

Posted on: Wednesday, 21 June 2006, 09:00 CDT

Glamis Gold Ltd. (TSX: GLG)(NYSE: GLG) today updated reserve and resource estimates for its Penasquito project in Zacatecas, Mexico. The revised estimates are based on new interpretations and assays from over 67,000 meters of drilling received since the completion of the original project feasibility study in November 2005.

Highlights

- Proven and probable gold reserves at Penasquito have increased 102% to 9.98 million ounces, and proven and probable silver reserves have increased 86% to 575 million ounces.

- Measured and indicated gold resources, inclusive of proven and probable reserves, now total 12.8 million ounces. Measured and indicated silver resources have increased to 822 million ounces.

- Inferred resources include an additional 14.3 million ounces of gold and 882 million ounces of silver. These increases demonstrate the outstanding potential for further growth at Penasquito, both from conversion of portions of the large mineral resource to reserves as well as the extension of open-ended mineralization in the Penasco and Chile Colorado deposits.

- An updated feasibility study based on a doubling of mill throughput to 100,000 tonnes per day is expected to be completed in August 2006.

"With this update, Company-wide gold reserves have nearly tripled in 2006, to over 15.7 million ounces and gold leverage has more than doubled, with gold reserves per share increasing by 117 percent," said Kevin McArthur, President and CEO. "Over the same period, silver reserves have increased more than ten-fold to 617 million ounces, providing enhanced silver market participation for our shareholders. Our team is now fully engaged at the site and we are excited to begin work on the ground - to transform the potential of this project into shareholder value."

Proven and Probable Reserves

To calculate updated reserves, the Company incorporated all new drilling data into a revised block model, followed by reserves modeling. Open pit limits were determined using a floating cone optimization routine, with cost parameters and metals recovery rates updated since the prior feasibility study. Metals prices utilized in the pit design were: $450 per ounce gold, $7.00 per ounce silver, $0.30 per pound lead and $0.60 per pound zinc. The resulting pit shapes were smoothed with the addition of haulage ramps, yielding proven and probable reserves as follows:

 Penasquito Proven & Probable Reserves Summary Data June 21, 2006                                    Feasibility      Update                                  November 2005   June 2006   % Change                                  -------------   ---------   -------- Ore tonnes (millions)  Oxide (heap leach)                       77.3        87.1        13%  Sulfide (flotation)                     257.8       476.9        85%  --------------------------------------------------------------------  Total ore tonnes (millions)             335.1       564.0        68% Oxide ore grade  Gold (grams per tonne)                   0.29        0.28        -3%  Silver (grams per tonne)                 24.0        23.8        -1% Sulfide ore grade  Gold (grams per tonne)                   0.51        0.60        18%  Silver (grams per tonne)                 30.2        33.2        10%  Lead (%)                                 0.31        0.35        13%  Zinc (%)                                 0.69        0.76        10% Contained Metals  Gold (troy ounces - millions)            4.93        9.98       102%  Silver (troy ounces - millions)           310         575        86%  Lead (tonnes - millions)                 0.79        1.67       111%  Zinc (tonnes - millions)                 1.78        3.62       103% Stripping Ratio  (tonnes waste:oxide ore plus   sulfide ore)                            1.94        2.76        42% 

Complete reserve and resource data tables and accompanying notes for Penasquito are included below. The tables, notes and project diagrams are also available on the Company's website at www.glamis.com.

Updated Feasibility Study

The new reserves provide the basis for a revised feasibility study that is expected to be completed in August 2006. Glamis is analyzing a doubling of mill capacity to 100,000 tonnes per day from 50,000 tonnes per day as contemplated in the prior feasibility study. This plan would call for construction of an initial 50,000 tonne per day milling and flotation circuit followed by the addition of a second circuit of the same size following start-up.

Under the 2006 Penasquito supplemental capital budget of $52 million, Glamis is advancing design and engineering studies, continuing exploration drilling and placing orders for major equipment. The Company's current timeline calls for completion of permitting by mid-2007, initial production from heap leaching of oxide ore by late 2008, and completion of the mill and flotation circuit by late 2009.

Mineral Resources

The Penasquito property consists of two primary deposits: Penasco to the north and Chile Colorado to the south. The mineral resources inventory has increased significantly, and continued drilling to convert these resources is expected to provide the basis for future reserve growth. The current mineral resources are summarized in the following table:

 Penasquito Mineral Resources Summary Data June 21, 2006                                    Feasibility      Update                                  November 2005   June 2006   % Change                                  -------------   ---------   -------- Measured & Indicated Resource  (inclusive of proven and   probable reserves)   Tonnes (millions)                      671.3       872.5        30%   Contained Metals    Gold (troy ounces - millions)           8.7        12.8        47%    Silver (troy ounces - millions)         614         822        34%    Lead (tonnes - millions)                1.8         2.4        33%    Zinc (tonnes - millions)                4.1         5.3        29% Inferred Resource   Tonnes (millions)                      246.7     2,577.0       945%   Contained Metals    Gold (troy ounces - millions)           2.8        14.3       411%    Silver (troy ounces - millions)         192         882       359%    Lead (tonnes - millions)                0.6         2.4       300%    Zinc (tonnes - millions)                1.4         7.1       407% 

Exploration

Exploration drilling at Penasquito is currently underway, concentrating on three key areas:

Conversion of In-Pit Resources. Within the two open pits, 75 million tonnes of mineralization contained in the inferred resource category are currently classified as waste rock for the purposes of the economic analysis. In-fill drilling is expected to increase confidence in these areas and should result in a conversion of a portion of the resource into reserves and a corresponding reduction in the stripping ratio.

Extension of Mineralized Zones. The known mineralization remains open, both at the southern end of the Penasco deposit and the northern end of the Chile Colorado deposit, toward the Azul target. Step-out drilling will continue in an effort to extend the deposits and ultimately join the currently separate open pits.

Underground Opportunity. In the Penasco deposit, intersections of high grade mineralization have been identified beneath the designed pit. A portion of the drilling program in 2006 will test deeper targets to investigate the possibility of future bulk underground mining.

A budget of $6.3 million has been approved for continued exploration drilling in the second half of 2006. Currently, five diamond drill rigs are active on the property, including the condemnation drilling program. The goal is to drill an additional 30,000 to 40,000 meters in the mineralized areas in the second half of 2006.

"These dramatic increases in reserves and resources over such a short time period demonstrate Penasquito's growth potential," added McArthur "As the scope and magnitude of this world class deposit continues to emerge, so too does its growing importance to Glamis over the long term. We currently envision a twenty-year mine in an excellent mining jurisdiction, providing Glamis the road map for continued growth in gold production. As an added benefit, Penasquito positions the Company to become a significant producer of base metals and is expected to elevate Glamis into the ranks of the world's leading silver producers."

Glamis Gold Ltd. is a premier intermediate gold producer with low cost mines and development projects in Nevada, Mexico and Central America. Plans call for growth to over 700,000 ounces of gold by 2007. The company remains 100 percent unhedged. For more information about Glamis and its operations, visit the Company on the Internet at www.glamis.com.

Safe Harbor Statement under the United States Private Securities Litigation Reform Act of 1995: Except for the statements of historical fact contained herein, the information presented constitutes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements, include, but are not limited to those with respect to, the price of gold, the estimation of mineral reserves and resources, the realization of mineral reserves estimates, the timing and amount of estimated future production, costs of production, capital expenditures, costs and timing of the development of new deposits, success of exploration activities, Glamis' hedging practices, permitting time lines, currency fluctuations, requirements for additional capital, government regulation of mining operations, environmental risks, unanticipated reclamation expenses, title disputes or claims limitations on insurance coverage and the timing and possible outcome of pending litigation. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects", or "does not expect", "is expected", "budget", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variation of such words and phrases or statements that certain actions, events or results, "may", "could", "would", "might" or "will" be taken, occur or be achieved.

Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Glamis to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the actual results of current exploration activities, actual results of current reclamation activities, conclusions of economic evaluations, changes in project parameters as plans continue to be refined, future prices of gold, possible variations in ore grade or recovery rates, failure of plant, equipment or processes to operate as anticipated, accidents, labor disputes and other risks of the mining industry, delays in obtaining governmental approvals or financing or in the completion of development or construction activities, as well as those factors discussed under Item 5 in the section entitled "Risk Factors" in the Company's Annual Information Form. Although Glamis has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements contained herein.

email requests for investor packets to: info@glamis.com

email questions/correspondence to: jeffw@glamis.com

 Penasquito Project Reserves --------------------------------------------------------------------                         Ore    Gold              Silver Proven Category      Tonnes   Grade        Gold   Grade       Silver                   (Millions)   (gpt)     Ounces    (gpt)      Ounces -------------------------------------------------------------------- Penasco  Pit Oxide             51.6    0.28     471,000    25.4   42,136,000 Penasco  Pit Sulfide          221.2    0.67   4,733,000    32.2  228,967,000 Chile Colorado  Pit Oxide             16.7    0.22     120,000    20.3   10,878,000 Chile Colorado  Pit Sulfide           46.7    0.29     442,000    50.9   76,372,000 -------------------------------------------------------------------- -------------------------------------------------------------------- Combined Pits  Oxide Proven  Reserves              68.2    0.27     591,000    24.2   53,014,000 Combined Pits  Sulfide Proven  Reserves             267.9    0.60   5,175,000    35.4  305,339,000 -------------------------------------------------------------------- -------------------------------------------------------------------- Combined Pits  Proven Reserves      336.2    0.53   5,766,000    33.2  358,353,000 --------------------------------------------------------------------                         Ore    Gold              Silver Probable Category    Tonnes   Grade        Gold   Grade       Silver                   (Millions)   (gpt)     Ounces    (gpt)      Ounces -------------------------------------------------------------------- Penasco  Pit Oxide             16.6    0.35     186,000    23.4   12,465,000 Penasco  Pit Sulfide          207.3    0.60   3,999,000    30.2  201,405,000 Chile Colorado  Pit Oxide              2.2    0.22      16,000    14.7    1,060,000 Chile Colorado  Pit Sulfide            1.7    0.25      14,000    28.9    1,578,000 -------------------------------------------------------------------- -------------------------------------------------------------------- Combined Pits  Oxide Probable  Reserves              18.8    0.33     202,000    22.4   13,525,000 Combined Pits  Sulfide Probable  Reserves             209.0    0.60   4,013,000    30.2  202,983,000 -------------------------------------------------------------------- -------------------------------------------------------------------- Combined Pits  Probable Reserves    227.8    0.58   4,215,000    29.6  216,508,000 -------------------------------------------------------------------- Proven +                Ore    Gold              Silver Probable Totals      Tonnes   Grade        Gold   Grade       Silver                   (Millions)   (gpt)     Ounces    (gpt)      Ounces -------------------------------------------------------------------- Penasco  Pit Oxide             68.2    0.30     657,000    24.9   54,601,000 Penasco  Pit Sulfide          428.5    0.63   8,732,000    31.2  430,372,000 Chile Colorado  Pit Oxide             18.9    0.22     136,000    19.6   11,938,000 Chile Colorado  Pit Sulfide           48.4    0.29     456,000    50.1   77,950,000 -------------------------------------------------------------------- -------------------------------------------------------------------- Combined Pits  Oxide P+ P  Reserves              87.1    0.28     793,000    23.8   66,539,000 Combined Pits  Sulfide P+ P  Reserves             476.9    0.60   9,188,000    33.2  508,322,000 -------------------------------------------------------------------- -------------------------------------------------------------------- Combined Pits  P+ P Reserves        564.0    0.55   9,981,000    31.7  574,861,000 --------------------------------------------------------------------                                   Lead       Lead    Zinc       Zinc Proven Category                  Grade     Tonnes   Grade     Tonnes                                     (%) (Millions)     (%) (Millions) -------------------------------------------------------------------- Penasco Pit Oxide Penasco Pit Sulfide               0.35        0.8    0.77        1.7 Chile Colorado Pit Oxide Chile Colorado Pit Sulfide        0.56        0.3    0.97        0.5 -------------------------------------------------------------------- -------------------------------------------------------------------- Combined Pits Oxide Proven  Reserves Combined Pits Sulfide Proven  Reserves                         0.38        1.0    0.81        2.2 Combined Pits Proven Reserves --------------------------------------------------------------------                                   Lead       Lead    Zinc       Zinc Probable Category                Grade     Tonnes   Grade     Tonnes                                     (%) (Millions)     (%) (Millions) -------------------------------------------------------------------- Penasco Pit Oxide Penasco Pit Sulfide               0.31        0.6    0.70        1.5 Chile Colorado Pit Oxide Chile Colorado Pit Sulfide        0.34        0.0    0.65        0.0 -------------------------------------------------------------------- -------------------------------------------------------------------- Combined Pits Oxide Probable  Reserves Combined Pits Sulfide Probable  Reserves                         0.31        0.6    0.70        1.5 Combined Pits Probable Reserves --------------------------------------------------------------------                                   Lead       Lead    Zinc       Zinc Proven + Probable Totals         Grade     Tonnes   Grade     Tonnes                                     (%) (Millions)     (%) (Millions) -------------------------------------------------------------------- Penasco Pit Oxide Penasco Pit Sulfide               0.33        1.4    0.74        3.2 Chile Colorado Pit Oxide Chile Colorado Pit Sulfide        0.55        0.3    0.96        0.5 -------------------------------------------------------------------- -------------------------------------------------------------------- Combined Pits Oxide P+ P  Reserves Combined Pits Sulfide P+ P  Reserves                         0.35        1.7    0.76        3.6 Combined Pits P+ P Reserves Penasquito Project Mineral Resources --------------------------------------------------------------------                                Gold              Silver Measured Category    Tonnes   Grade        Gold   Grade       Silver                   (Millions)   (gpt)     Ounces    (gpt)      Ounces -------------------------------------------------------------------- Penasco  Oxide Resource        53.9    0.28     480,000    24.9   43,101,000 Penasco  Sulfide Resource     242.6    0.65   5,095,000    31.1  242,693,000 Chile Colorado  Oxide Resource        30.4    0.18     176,000    17.3   16,950,000 Chile Colorado  Sulfide Resource     139.6    0.28   1,258,000    35.6  159,592,000 -------------------------------------------------------------------- -------------------------------------------------------------------- Combined Oxide  Measured Resources    84.3    0.24     656,000    22.2   60,051,000 Combined Sulfide  Measured Resources   382.3    0.52   6,353,000    32.7  402,285,000 -------------------------------------------------------------------- -------------------------------------------------------------------- Combined Measured  Resources            466.6    0.47   7,009,000    30.8  462,336,000 --------------------------------------------------------------------                                Gold              Silver Indicated Category   Tonnes   Grade        Gold   Grade       Silver                   (Millions)   (gpt)     Ounces    (gpt)      Ounces -------------------------------------------------------------------- Penasco  Oxide Resource        20.8    0.31     208,000    21.8   14,569,000 Penasco  Sulfide Resource     263.3    0.58   4,941,000    29.2  246,957,000 Chile Colorado  Oxide Resource        19.1    0.14      89,000    17.5   10,776,000 Chile Colorado  Sulfide Resource     102.7    0.16     517,000    26.4   87,233,000 -------------------------------------------------------------------- -------------------------------------------------------------------- Combined Oxide  Indicated Resources   39.9    0.23     297,000    19.7   25,345,000 Combined Sulfide  Indicated Resources  366.0    0.46   5,458,000    28.4  334,190,000 -------------------------------------------------------------------- -------------------------------------------------------------------- Combined Indicated  Resources            405.9    0.44   5,755,000    27.5  359,535,000 --------------------------------------------------------------------                                Gold              Silver Inferred Category    Tonnes   Grade        Gold   Grade       Silver                   (Millions)   (gpt)     Ounces    (gpt)      Ounces -------------------------------------------------------------------- Penasco  Oxide Resource        22.9    0.14     101,000    10.7    7,900,000 Penasco Sulfide  Resource           1,041.7    0.28   9,365,000    14.5  485,522,000 Chile Colorado  Oxide Resource       149.1    0.06     287,000     5.0   23,793,000 Chile Colorado  Sulfide Resource   1,362.9    0.10   4,514,000     8.3  364,539,000 -------------------------------------------------------------------- -------------------------------------------------------------------- Combined Oxide  Inferred Resources   172.0    0.07     388,000     5.7   31,693,000 Combined Sulfide  Inferred Resources 2,404.6    0.18  13,879,000    11.0  850,061,000 -------------------------------------------------------------------- -------------------------------------------------------------------- Combined Inferred  Resources          2,576.6    0.17  14,267,000    10.6  881,754,000 --------------------------------------------------------------------                                   Lead       Lead    Zinc       Zinc Measured Category                Grade     Tonnes   Grade     Tonnes                                     (%) (Millions)     (%) (Millions) -------------------------------------------------------------------- Penasco Oxide Resource Penasco Sulfide Resource          0.33        0.8    0.74        1.8 Chile Colorado Oxide Resource Chile Colorado Sulfide Resource   0.37        0.5    0.80        1.1 -------------------------------------------------------------------- -------------------------------------------------------------------- Combined Oxide Measured  Resources Combined Sulfide Measured  Resources                        0.34        1.3    0.76        2.9 Combined Measured Resources --------------------------------------------------------------------                                   Lead       Lead    Zinc       Zinc Indicated Category               Grade     Tonnes   Grade     Tonnes                                     (%) (Millions)     (%) (Millions) -------------------------------------------------------------------- Penasco Oxide Resource Penasco Sulfide Resource          0.29        0.8    0.67        1.8 Chile Colorado Oxide Resource Chile Colorado Sulfide Resource   0.32        0.3    0.64        0.7 -------------------------------------------------------------------- -------------------------------------------------------------------- Combined Oxide Indicated  Resources Combined Sulfide Indicated  Resources                        0.30        1.1    0.66        2.4 Combined Indicated Resources --------------------------------------------------------------------                                   Lead       Lead    Zinc       Zinc Inferred Category                Grade     Tonnes   Grade     Tonnes                                     (%) (Millions)     (%) (Millions) -------------------------------------------------------------------- Penasco Oxide Resource Penasco Sulfide Resource          0.13        1.4    0.38        4.0 Chile Colorado Oxide Resource Chile Colorado Sulfide Resource   0.08        1.0    0.23        3.1 -------------------------------------------------------------------- -------------------------------------------------------------------- Combined Oxide Inferred  Resources Combined Sulfide Inferred  Resources                        0.10        2.4    0.29        7.1 Combined Inferred Resources 

Notes:

1) The terms Mineral Resource and Reserves as used herein conform to the definitions contained in the National Instrument 43-101 which adopts those published by the Canadian Institute of Mining, Metallurgy, & Petroleum (CIM). These resource and reserves estimates have been prepared under the supervision of James S. Voorhees, Executive Vice President and Chief Operating Officer of Glamis Gold Ltd., who is a Qualified Person as defined in National Instrument 43-101.

2) Reserves have been calculated using assumed long-term metals prices as follows: Gold - $450 per ounce; Silver - $7.00 per ounce; Zinc - $0.60 per pound and Lead - $0.30 per pound. Mineral Resources have been calculated using assumed long-term metals prices as follows: Gold - $650 per ounce; Silver - $10.00 per ounce; Zinc - $0.86 per pound and Lead - $0.43 per pound.

3) Measured plus Indicated (M&I) Resources are defined as being inside an optimized floating cone geometry that was developed using the Mineral Resource metal prices set forth above and all classifications of material. This defines a resource that has the potential of being mined by open pit methods and is not the total block model contained mineralization. In the Penasco deposit, Measured Resources are defined as any block within the reasonably foreseeable open pit that is within 35 meters of two or more drill holes. In the Penasco deposit, Indicated Resources are defined as any block within the reasonably foreseeable open pit not defined as Measured that is within 70 meters of two or more drill holes. In the Chile Colorado deposit, Measured Resources are defined as any block within the reasonably foreseeable open pit that has five or more holes within 135 meters of the block with the closest hole no more than 50 meters distance. In the Chile Colorado deposit, Indicated Resources are defined as any block within the reasonably foreseeable open pit not defined as Measured that has two or more holes within 135 meters of the block with the closest hole no more than 70 meters distance.

4) The M&I Resources have been calculated using NSR (Net Smelter Return) cutoff grades and assuming the long-term Mineral Resource metals prices set forth above. For oxide M&I resources, an NSR cutoff grade of $1.30 was applied. For sulfide M&I Resources, an NSR cutoff grade of $3.60 was applied.

5) In the Penasco deposit, Inferred Resources are defined as any block within the computer model not defined as Measured or Indicated that is located within a manually defined mineralized grade domain. The grade domain was developed using geologic interpretation of drill hole assays, lithology and alteration data. In the Chile Colorado deposit, Inferred Resources are defined as any block within the computer model not defined as Measured or Indicated that is located within 135 meters of a drill hole.

6) The Inferred Resources have been stated using NSR cutoff grades and assuming the long-term Mineral Resource metals prices set forth above. For oxide Inferred Resources, an NSR cutoff grade of $0.70 was applied and for sulfide Inferred Resources, an NSR cutoff grade of $1.60 was applied, with both cutoff grades being based on reserve metal prices.

7) Reserves are a subset of Measured and Indicated Resources.

 Contacts: Glamis Gold Ltd. Jeff Wilhoit Director, Investor Relations (775) 827-4600 ext. 3104 jeffw@glamis.comwww.glamis.com

SOURCE: Glamis Gold Ltd.

Source: MARKET WIRE

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