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Re: News Release - Friday, January 15, 2010
GoldQuest Announces Closing of Acquisition of Spanish
Lead-Zinc-Silver Project
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VANCOUVER, BC, JANUARY 15, 2009 - GoldQuest Mining Corp. ("GoldQuest")
is pleased to announce that it has completed the acquisition of all of
the issued and outstanding shares of Lundin Mining Exploration S.L.
("Lundin SL") from Lundin Mining Corporation ("Lundin"), as previously
described in a news release issued March 30, 2009, on amended terms.
Through its acquisition of Lundin SL, GoldQuest has acquired:
.. A 100% interest in the Toral project, located in northwest Spain,
which has a historical resource estimate of 5.4 million tonnes
grading 9% zinc, 6% lead and 45 grams per tonne (g/t) silver (not
calculated in accordance with National Instrument 43-101);
.. A 100% interest in a second polymetallic project currently under
application; and
.. Access to a large exploration database covering northwest Spain - a
region with excellent potential for various styles of both precious
and base-metal mineralization.
Summary of the Agreement
GoldQuest will not pay any upfront consideration for the assets but
will compensate Lundin Mining AB with a one-time payment of CDN$5
million dollars payable upon commencement of commercial production from
the Toral property. The five million shares of GoldQuest referenced in
the March 30, 2009 news release are no longer issuable under the terms
of the amended agreement. The agreement includes a royalty to Lundin
of 1.5 percent on the net smelter return from the Toral project and a
one-time "back-in" right under which Lundin may reacquire a 51%
interest in the Toral project, as described below. In the event Lundin
exercises its "back-in" right, the $5 million purchase price and the
net smelter return royalty will not be payable.
Under the agreement, Lundin may exercise its one-time "back-in" right
to reacquire a 51% interest in the Toral project after the following
events have occurred: i) delineation of an inferred resource on the
Toral Property of greater than one million tonnes of contained lead and
zinc, and ii) completion of not less than 5,000 metres of drilling on
the Toral property. To exercise the "back-in" right, Lundin must pay
to GoldQuest (or have spent on the project) an amount equal to 2.5
times the total expenditures made by GoldQuest on the project.
Following payment or expenditure in full by Lundin, a joint venture
will be formed pursuant to which Lundin will hold a 51% interest and
GoldQuest will hold a 49% interest in the Toral project. Lundin will
then have the right to increase its interest in the joint venture from
51% to 65% by advancing the project and completing a full feasibility
study for the Toral property.
Toral Project
GoldQuest, through its wholly owned subsidiary Lundin SL, 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 hectare 100% owned
property is located approximately 400 km northwest of Madrid, near the
regional city of Ponferrada. The Toral Project area was originally
investigated by Pe�arroya-Espa�a and associates from 1975 to 1985 which
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. With the majority of historical
drilling completed in one relatively small part of the property,
GoldQuest believes that the Toral Project has significant exploration
and development upside.
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.
The Toral Project benefits from excellent infrastructure, including
access via a major regional highway, a nearby high-voltage power line
and a rail 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.
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 is also host to
the Rubiales zinc-lead-silver deposit, located about 30 km northwest of
Toral, which was mined by Cominco from 1976 to 1991.
In 2006, one of the losing bidders in the tender process that awarded
the Toral Investigation Permit to Lundin instituted an administrative
appeal of that award, against the Territorial Service of Industry,
Commerce and Tourism of the Autonomous Community of Castile and Le�n in
Spain. The appeal is ongoing, and although GoldQuest has sought advice
from Spanish counsel, and believes that a favourable outcome is likely,
if the appeal ultimately prevails the award of the Permit to Lundin may
be subject to further adjudication or may be revoked. The Territorial
Service of Industry, Commerce and Tourism of the Autonomous Community
of Castile and Le�n in Spain who awarded the Investigation Permit to
Lundin consider the property title to be in good standing. Under the
terms of the acquisition agreement with Lundin, GoldQuest retains the
option to abandon the Toral property prior to making the payment to
Lundin, in the event that this matter is not resolved to the
satisfaction of GoldQuest.
Alistair Waddell, president and chief executive officer of GoldQuest,
commented, "We are delighted to have concluded the acquisition of the
Lundin assets with no upfront cost to GoldQuest. We have completed
considerable due diligence on the status of the Permit and have weighed
all of the risks against the potential of the project. We look forward
to advancing the Toral project and the exploration programme in Spain."
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 this second
project will be announced after 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
GoldQuest to compile and incorporate the data into a digital GIS
database to prioritize new exploration targets which will be followed
up. The acquisition agreement grants Lundin a one-time right of first
offer on projects established in a defined area of interest, if
GoldQuest decides to sell or dispose of a project.
The historical estimate quoted in this news release was prepared prior
to the implementation of National Instrument 43-101, and the historical
estimate does not use the resource categories stipulated in Section 1.3
of National Instrument 43-101, which are "inferred mineral resource",
"indicated mineral resource" and "measured mineral resource", and
should not be relied upon. 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 and GoldQuest believes that term "resources"
is used differently from the use of that term in National Instrument
43-101. GoldQuest does not have, and is not aware of, any more recent
resource estimates or data which conform to the standards contained in
National Instrument 43-101. GoldQuest advises that it has not yet
completed sufficient detailed exploration work necessary to verify the
relevance, reliability and classification of the historical estimate as
current mineral resources or mineral reserves, and the historical
estimate has not been verified by a Qualified Person.
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. Mr. Alistair H.
Waddell, an employee, President and Chief Executive Officer of
GoldQuest is the qualified person as defined by National Instrument
43-101 who has supervised the preparation of the information used in
this news 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
<em.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
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.
View News Release in PDF Form:
http://www.goldquestcorp.com/i/pdf/2010-01-15_NR.pdf
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Copyright (c) 2010 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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