FORT FRANCES, ONTARIO-(May 27, 2008) -
Q-Gold Resources Ltd. (TSX VENTURE:QAU)(FRANKFURT:QX9) announced
today that in an "arm's length" transaction with private parties,
it has obtained an option to conduct due diligence on three Arizona base
metals properties. All three are governed by the U.S. General Mining Act of
1872, amended.
The properties are described as follows:
RAY PROSPECT
Located in the Mineral Creek Mining District (Globe/ Miami area of
Southeastern Arizona) of Pinal County, which hosts a string of large copper
porphyry deposits extending from Superior to Hayden, Arizona, the optioned
property consists of six Federal patents comprising 103 acres on the
western slopes of 6,000 foot Scott Mountain in the Dripping Springs Range
along the eastern edge of the Ray Ore Body. The Ray copper porphyry deposit
has been mined since the 1890's and by mass mining (open pit) methods by
Asarco since 1948. It is currently
being mined at a rate of 250,000 tons per day or ore, and produced 232..9
million pounds of copper in 2006 (most recently reported annual
production), making it Arizona's second largest producing copper mine.
As the optioned patents were held by private ranching interests beginning
in 1897 until acquired by the vendors, the ground, although prospective,
has not been mined.
TROY PROSPECT
Also located in the Dripping Springs Mountain Range of the Mineral Creek
Mining District (Gila County), the Troy prospect consists of eight Federal
Patents comprising 148 contiguous acres located approximately 4 miles
southeast of the Ray Mine. This property is also a copper porphyry
prospect, which has only incurred small-miner, near-surface operations
since its discovery in 1900. Based on surface sampling, geochemical and
geophysical surveys, and the extensive presence of faulting, breccias and
weathered copper sulfide minerals (gossans) on surface, the Troy deposit is
a prime exploration target for an underlying copper and possibly copper/
molybdenum porphyry accumulation. Molybdenum is a byproduct in many of
Arizona's copper mines.
THE PINAFORE MINE
Located in Western Arizona near Bagdad in the Eureka Mining District of
Yavapai County, this property consists of one Federal Patent and nine
contiguous U.S. Department of the Interior, Bureau of Land Management
Mining claims totaling 206 acres. The Pinafore Mine is a volcanogenic
massive sulfide (VMS) polymetallic deposit containing copper and zinc
located on the western fold of a limb on the Bagdad open pit copper and
molybdenum mine, Arizona's third largest producing copper mine. During
World War II, about 5,000 tons were mined from a 245 foot shaft and several
hundred feet of drifts.. Drilling in 1992 by Arizona Exploration Inc.
(American Barrick, Placer Dome and Homestake) delineated two promising VMS
deposits at depth (800 feet) in the Pinafore. A restricted land position at
the time precluded their further interest. A subsequent geophysical survey
indicated the presence of a synclinal trend to the southwest which may host
additional VMS prospects on ground included in Q-Gold's option.
Pursuant the terms of its agreement with the vendors, Q-Gold's due
diligence option can be converted into a Purchase Option Agreement, on or
before September 1, 2008, to acquire a 100% interest in the properties
under the following terms:
(1) Option Term: 5 years
(2) Upon Execution: US$ 66,000 cash payment
(3) Semi-Annual Payments: US$ 25,000 cash
(4) To Purchase 100% Interest: US$ 1,500,000 Cash plus issuance of Q-Gold
common shares equal to US$ 1,500,000 in value.
The Purchase Option Agreement is subject to the approval of the TSX Venture
Exchange.
Arizona Copper Production
Arizona leads the U.S. in copper production and is in the top five U.S.
producers of molybdenum and silver. The value of Arizona copper production
in 2007 exceeded US$ 5.5 billion. The ten largest Arizona copper mines
produced a total of 1.57 billion pounds of copper in 2006, including the #2
producer, the Ray Mine (Asarco) with 232.9 million pounds and the #3
producer, the Bagdad Mine (Freeport McMoran) with 165.4 million pounds of
copper. (Source: "Arizona's Metallic Resources Trends and
Opportunities - 2008" Arizona Department of Mines and Mineral
Resources, Open File Report 08-26, February 2008, p. 1, Author: Nyal J.
Niemuth)
President's Remarks
President and CEO, Bruce Carruthers said, "Q-Gold is indeed fortunate
to be able to obtain options, on a very reasonable basis, on two un-mined
tracts which are prospective for copper and molybdenum in the heart of
Arizona's southeastern porphyry copper belt. These have been in private
hands since the late 1800's. The other optioned property, the Pinafore
Mine, in the Western Arizona VMS belt, presents an already
drill-identified, polymetallic deposit that has expansion potential onto
lands also included in the option package.
Labor and political disruptions to Asian and South American copper
supplies, rising Asian demands and depleting warehouse stocks of copper
provide a positive outlook for Arizona copper production and prices in the
next few years. Our due diligence efforts on the new properties are
currently in progress," Mr. Carruthers concluded.
Richard C. Beard, P.Eng., Consulting Geologist, a Qualified Person as
defined by NI 43-101, has reviewed and approved the above technical
disclosure.
MINE CENTRE, ONTARIO UPDATE
At Mine Centre, Q-Gold is in the process of acquiring the necessary permits
to dewater the Foley Gold Mine. The Company has received copies from its
environmental engineering consultants, Trow Associates Inc.
("Trow"), of applications for both a Permit to Take Water and a
Sewage Works Certificate of Approval, required by the Ontario Ministry of
Environment. The applications include Trow's results from mine water
toxicity tests, a hydrogeological report, drilling and monitoring of test
water wells, a topographic survey of the Foley minesite and preparation of
preliminary engineering designs of two-stage settling ponds followed by a
polishing pond to insure the water's purity.
Upon receipt of the permits, Q-Gold will construct the ponds and resume
rehabilitation and dewatering of the Foley Mine north shaft to the 400 foot
level. This will permit access and advanced gold exploration activities in
the mine.
About Q-Gold Resources Ltd.
Q-Gold is a Canadian-based mineral exploration company currently exploring
for precious and base metals and platinum group elements on its extensive
Ontario holdings in the historic Gold Camp at Mine Centre of 32,585 acres,
including 5 historic gold mines, 7,634 exploratory acres in the Rainy River
Greenstone Belt and six historic gold and silver mines near Crown King,
Arizona.
For all future Q-Gold investor relations needs, investors are asked to
visit the Q-Gold IR Hub at http://www.agoracom.com/IR/Q-Gold
where they can post questions and receive answers within the same day, or
simply review questions and answers posted by other investors.
Alternatively, investors are able to email all questions and correspondence
to QAU@agoracom.com where they can
also request addition to the investor email list to receive all future
press releases and updates in real time..
The statements made in this Press Release may contain forward-looking
statements that may involve a number of risks and uncertainties. Actual
events or results could differ materially form the Company's expectations
and projections.
The TSX Venture Exchange has not reviewed this press release and neither
approved nor disapproved the information contained in this press release.
For more information, please contact
Corporate Inquiries
Q-Gold Resources Ltd.
J. Bruce Carruthers II, President
1-888-779-0166
Website: http://www.qgoldresources.com
or
Investor Relations
AGORACOM Investor Relations
Email: QAU@agoracom.com
Website: http://www.agoracom.com/IR/Q-Gold