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Re: News Release - Monday, March 30, 2009
Goldquest Acquires Spanish Lead-Zinc-Silver Project
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VANCOUVER, BC, MARCH 30, 2009 -- GoldQuest Mining Corp. (the "Company")
is pleased to announce that it has acquired all of the outstanding
shares of Lundin Mining Exploration S.L. ("Lundin SL") from its parent
company Lundin Mining Corporation ("Lundin"). Lundin SL holds a 100%
interest in the Toral Lead-Zinc-Silver Project located in northwest
Spain and a second polymetallic project currently under application.
In addition, Lundin SL owns or has access to a large regional
exploration database which will also be acquired by GoldQuest.
SUMMARY
Through the acquisition of Lundin SL,
.. GoldQuest has acquired a 100% interest in the Toral Project which has
a historical resource estimate of 5.4 million tonnes grading 9 % Zinc,
6 % Lead and 45 g/t Silver which has not been calculated in accordance
with National Instrument 43-101 ("NI 43-101");
.. GoldQuest has acquired access to a large exploration database
covering northwest Spain - a region with excellent potential for
various styles of both precious and base-metal mineralization; and
.. GoldQuest has acquired a 100% interest in a second polymetallic
project currently under application.
Mr. Alistair Waddell, President & CEO of GoldQuest, commented, "The
Toral Project is an exciting low-cost acquisition in a mining and
investment friendly jurisdiction which has potential to become a
significant long-term asset for GoldQuest. There are many similarities
between Toral and the nearby Rubiales orebody including a steep,
sheet-like shape which is typically good for mining and very
coarse-grained zinc-lead sulphides with low pyrite content and good
silver credits which have the potential to make high-value
concentrates. GoldQuest plans to fast-track the Toral Project by
initially converting the historic resource calculation to be NI-43-101
compliant. Drilling by Lundin over the past 18 months will enable us
to achieve this without investing in a major drill programme. We will
also undertake low cost exploration to explore the project for further
tonnage. The Company believes the project, and indeed the district,
has significant exploration potential for Toral style and other styles
of precious and base metal mineralization and consider this an exciting
addition to our portfolio in the Dominican Republic".
TORAL PROJECT
Lundin has been granted an exclusive Investigation Permit for the Toral
Project by the Territorial Service of Industry, Commerce and Tourism of
the Autonomous Community of Castile and Le�n in Spain. The 2,850 ha
100% owned property is located approximately 400 km northwest of
Madrid, near to the regional city of Ponferrada. The Toral Project
area was originally investigated by Pe�arroya-Espa�a and associates
from 1975 to 1985 and included over 42,000 metres of
Diamond drilling.
These drill holes reportedly delineated a tabular zone of continuous,
sub-vertical, coarse-grained lead-zinc-silver sulphide mineralization
that averages 3.7 metres wide with a reported 1,100 metres strike
length and a vertical height exceeding 400 metres.
Based on the previous drilling, the historical estimate of Toral was
estimated at 5.4 million tonnes grading 9 % Zn, 6 % Pb and 45 g/t Ag.
This historical estimate, dated June 1997, was calculated by Spanish
Mining Engineer Dr. Rufino Gea Javaloy on behalf of Geominera S.A. and
Pe�arroya-Espa�a and is not NI 43-101 compliant. The zone of sulphide
mineralization is reportedly open along strike to the northwest towards
a known lead deposit as well as along strike to the southeast and down
dip. The Pe�arroya-Espa�a and the Lundin drill core is still available
including the remaining halved intercepts.
GoldQuest believes that the Toral Project has significant exploration
and development upside with the majority of historical drilling
completed in one relatively small part of the property.
SECOND POLYMETALLIC PROJECT
In addition to the acquisition of the Toral Project, GoldQuest has
acquired a second polymetallic project from Lundin located in northwest
Spain which is still under application. Further details of the project
will be announced once full title has been received from the Spanish
authorities.
REGIONAL EXPLORATION DATA
GoldQuest has gained access to a large amount of historical exploration
data covering northern Spain. The data, the majority of which is in
hard-copy format, has been collected over many years and covers a wide
variety of commodities including gold. It is the intention of the
Company to compile and incorporate the data into a digital GIS
database, the best targets of which will be followed up. Lundin
maintains a one-time Right of First Offer on projects that are
generated in a defined area of interest.
DETAILS OF THE GOLDQUEST-LUNDIN AGREEMENT
GoldQuest has agreed to issue Lundin five million shares, subject to
approval of the TSX Venture Exchange, to purchase all of the
outstanding shares of Lundin SL, the Spanish company that holds the
Toral Project and the second project currently under application and
has access to the historical exploration database.
Lundin will retain a 1.5% royalty on the Net Smelter Return (NSR) from
the Toral Project. Lundin also retains a one-time back-in right to
reacquire a fifty-one (51%) percent interest in the Toral Project once
GoldQuest provides written notice to Lundin within 10 days of the
following events occurring: delineation of an inferred resource on the
Toral Project of greater than 1 Million tonnes of lead and zinc
(contained), as demonstrated in a NI 43-101 compliant report, and
completion of not less than 5,000 meters of drilling.
To exercise the back-in right, Lundin must (1) spend an amount equal to
2.5 times the aggregate expenditures made by GoldQuest on the Toral
Project and (2) pay an amount in cash equal to 51% of the value of the
shares issued by GoldQuest under the agreement. If Lundin elects to
exercise the back-in right, the right of Lundin to receive the 1.5% NSR
will be terminated.
Upon completion of the above, a Joint Venture will be formed pursuant
to which Lundin will have 51% interest and GoldQuest will have a 49%
interest in the Toral Project. Upon formation, each party will either
fund their proportional share of the expenditures or Lundin may elect
to increase its participating interest in the Joint Venture from 51% to
65% by completing a full feasibility study on the Toral Project.
FURTHER DETAILS OF TORAL PROJECT
The Toral Project covers over 6 km of strike length of the prospective
Lower Cambrian Vegadeo Limestone formation which is regionally
mineralized along more than 40 km of its extent, and includes the
Rubiales zinc-lead-silver deposit, located about 30 km northwest of
Toral.
Rubiales reportedly contained an estimated 18.6 million tonne mineral
resource grading 7.3 % Zn, 1.3 % Pb and 13 g/t Ag and was mined by
Cominco from 1976 to 1991. Rubiales reportedly produced high-quality
zinc concentrate (life-of-mine average of 61% Zn with 95% zinc
recovery; the lead concentrate contained 70% Pb and 500 g/t Ag with an
85% lead recovery). The concentrates were transported to the
Asturianas zinc-lead smelter, located on the Asturias coast about 200
km to the west. Sulphide mineralization at Toral closely resembles the
coarse-grained sphalerite and galena mineralization at Rubiales but
Toral reportedly has higher silver grades.
The Toral Project benefits from excellent infrastructure, including
access via a major regional highway, nearby high-voltage power line and
a railway line which links to the Asturianas zinc-lead smelter via the
city of Le�n. Mining has traditionally been a significant part of the
economy of this region which is supporting the re-entry of new
exploration and mining projects. Certain exploration and mine
development expenditures are eligible for economic development grants
and interest free loans.
Lundin Mining recently completed a verification drill programme that
included the re-logging and re-assaying of historical Pe�arroya-Espa�a
drill core including the completion of seven
Diamond drill holes within
the historic resource zone.
The historical estimate quoted in this news release was prepared prior
to the implementation of NI 43-101. The historical estimate quoted
herein does not use the resource categories stipulated in Section 1.3
of NI 43-101, which are "inferred mineral resource", "indicated mineral
resource" and "measured mineral resource". Rather, the historical
resource estimate for the "Mina de Toral" calculated and reported by
Spanish Mining Engineer Dr. Rufino Gea Javaloy on behalf of Geominera
S.A. and Pe�arroya-Espa�a that refers to "5.4 million tonnes" is not a
category stipulated in National Instrument 43- 101. The Company
believes that term "resources" is used differently from the use of that
term in NI 43-101. The Company does not have, and is not aware of, any
more recent resource estimates or data which conform to the standards
laid out in NI 43-101.
The Company advises that it has not yet completed sufficient detailed
exploration work necessary to verify the relevance, reliability and
classification of the historical estimate and it has not been verified
by a Qualified Person. The Company is not treating the historical
estimate as a current NI 43-101 defined resource or reserve, and
accordingly, the historical estimate should not be relied upon.
ABOUT GOLDQUEST
GoldQuest is a Vancouver based Exploration company with projects in the
Dominican Republic and Spain. Through a combination of regional
grass-roots generative exploration and new geological models the
Company has built a portfolio of new projects.
David J. Hall, Vice Chairman and Director to the Company is the
qualified person as defined by National Instrument 43-101 and has
reviewed the content of this press release. GoldQuest is traded on the
TSX-V under the symbol GQC.V and in Frankfurt / Berlin with symbol M1W.
For further information please contact:
Alistair Waddell
President & Chief Executive Officer
Dan Maarsman
Investor Relations -- Vancouver, Canada
Tel: +1-604-632 4333
www.goldquestcorp.com
investorrelations@goldquestcorp.com
On behalf of the Board of Directors "signed" Alistair H. Waddell
Neither the TSX Venture Exchange nor its Regulation Services Provider
(as that term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this news
release.
Forward-looking statements:
This news release contains certain statements that may be deemed
"forward-looking statements". All statements in this release, other
than statements of historical fact, that address events or developments
that GoldQuest expects to occur, are forward looking statements.
Forward looking statements are statements that are not historical facts
and are generally, but not always, identified by the words "expects",
"plans", "anticipates", "believes", "intends", "estimates", "projects",
"potential" and similar expressions, or that events or conditions
"will", "would", "may", "could" or "should" occur. Although GoldQuest
believes the expectations expressed in such forward-looking statements
are based on reasonable assumptions, such statements are not guarantees
of future performance and actual results may differ materially from
those in forward looking statements. Factors that could cause the
actual results to differ materially from those in forward-looking
statements include market prices, exploitation and exploration success,
continued availability of capital and financing and general economic,
market or business conditions. Investors are cautioned that any such
statements are not guarantees of future performance and actual results
or developments may differ materially from those projected in the
forward-looking statements. Forward looking statements are based on
the beliefs, estimates and opinions of GoldQuest's management on the
date the statements are made. GoldQuest undertakes no obligation to
update these forward-looking statements in the event that management's
beliefs, estimates or opinions, or other factors, should change.
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Copyright (c) 2009 GOLDQUEST MINING CORP. (GQC) All rights reserved.
For more information visit our website at http://www.goldquestcorp.com/
or send mailto:investorrelations@goldquestcorp.com
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