Silver Quest Executes Formal Joint Venture Agreement on Davidson Property, BC
VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 03/29/11 -- Silver Quest Resources (TSX VENTURE: SQI) ('Silver Quest' or 'the Company') is pleased to announce the execution of a formal joint venture agreement with Richfield Ventures Corp. (TSX VENTURE: RVC) ('Richfield') on the Company's Davidson Property. The Davidson Property is located within the northern portion of Richfield's Blackwater Gold Project, 100 km southwest of Vanderhoof in central British Columbia. For property map and location, please visit www.silverquest.ca.
Under the terms of the joint venture, Silver Quest holds a 25% participating interest, Richfield holds a 75% participating interest and will act as operator. Direct expenditures on the Davidson Property are shared on this pro-rata basis. Should dilution, by non-participation, reduce Silver Quest's interest in the joint venture to less than 10%, such interest will automatically convert to a 1.0% net smelter return royalty payable on production from the Davidson Property.
The joint venture parties have approved an initial 2011 work program of $8.6 million for the Davidson Property, of which Silver Quest's contribution will be approximately $1.8 million. This will include approximately 20,000 metres of diamond drilling and Silver Quest's share of various studies related to the development of the overall Blackwater Gold Project. Certain work expenditures, such as engineering, metallurgical test work, environmental baseline studies, etc. for the benefit of the overall project, will initially be shared 12.5% by Silver Quest and 87.5% by Richfield.
Richfield's initial NI43-101 resource calculation for entire Blackwater Gold Project contains an estimated Indicated Resource at a cut-off grade of 0.40 grams per tonne (g/t) gold of 53.46 million tonnes at an average grade of 1.06 g/t gold containing 1.83 million ounces gold. A further 75.45 million tonnes at an average grade of 0.96 g/t gold containing 2.34 million ounces gold is estimated in the Inferred category (see RVC news release dated March 2, 2011).
At a cut-off grade of 0.40 g/t gold, the Davidson Property is estimated to contain 331,000 tonnes at an average grade of 0.92 g/t gold, for 10,000 ounces of gold in the Indicated category and 46.27 million tonnes at an average grade of 0.92 g/t gold, for 1.36 million ounces of gold in the Inferred category. The table below summarizes the parties' respective interests in the Davidson Property resource estimate:
Davidson Property Resource Estimate (0.4 g/t Gold Cut-off grade)
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Indicated Inferred
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Tonnes Gold Contained Tonnes Gold Contained
000's g/t Gold ounces 000's g/t Gold ounces
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Richfield (75%) 248 0.92 7,500 34,702 0.92 1,020,000
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Silver Quest (25%) 83 0.92 2,500 11,567 0.92 340,000
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Davidson Property Total 331 0.92 10,000 46,269 0.92 1,360,000
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As the Blackwater Gold project advances to a Preliminary Economic Assessment (PEA), planned for completion in Q4 of 2011, work expenditures not directly on the Davidson property but considered for the benefit of the overall project, will be shared on a pro-rata basis as reflected by the relative distribution of mineral resources on the respective properties as determined by the PEA. This relative distribution of mineral resources will continually be updated by subsequent studies. Once the project construction capital budget is established, the joint venture operator will recommend a formula for sharing the capital cost of project development reflecting each partner's economic interest. A series of consultants have been contracted to prepare the PEA, planned for completion in Q4 of 2011. This study will consider the potential for a large-scale open pit mine and ore processing facility.
David Pawliuk, P. Geo., Vice-President Exploration for Silver Quest is the Qualified Person, as defined by NI 43-101, for the Davidson property and has reviewed the technical information in this release.
SILVER QUEST RESOURCES LTD.
Randy Turner, President
This news release used the terms measured, indicated and inferred resources as a relative measure of the level of confidence in the resource estimate. Readers are cautioned that the Davidson mineral resources are not economic mineral reserves and that the economic viability of resources that are not mineral reserves has not been demonstrated. In addition, inferred resources are considered too geologically speculative to have any economic considerations applied to them. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian rules, estimates of inferred mineral resources may not form the basis of feasibility or pre-feasibility studies or economic studies except for Preliminary Assessment as defined under NI 43-101. Readers are cautioned not to assume that further work will lead to mineral resources that can be mined economically.
Certain of the statements made and information contained herein is 'forward-looking information' within the meaning of the British Columbia Securities Act. This includes statements concerning the Company's plans at its mineral properties, which involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking information. Forward-looking information is subject to a variety of risks and uncertainties which could cause actual events or results to differ from those reflected in the forward-looking information, including, without limitation, the ability of the Company to continue to be able to access the capital markets for the funding necessary to acquire and maintain exploration properties and to carry out its desired exploration programs; inability to fund the Company's share of costs incurred under joint venture agreements to which it is a party, and reduction or elimination of its joint venture interest as a result; competition within the minerals industry to acquire properties of merit, and competition from other companies possessing greater technical and financial resources; difficulties in executing exploration programs on the Company's proposed schedules and within its cost estimates, whether due to weather conditions in the areas where it operates, increasingly stringent environmental regulations and other permitting restrictions, or other factors related to exploring in the north, such as the availability of essential supplies and services; factors beyond the capacity of the Company to anticipate and control, such as the marketability of minerals, government regulations relating to health, safety and the environment, the scale and scope of royalties and taxes on production; unusually mild winter conditions affecting or delaying the opening of the winter roads and resulting difficulties in transporting materials needed to support various exploration projects and resulting increased costs of transport by air; the availability of experienced contractors and professional staff to perform work in a competitive environment and the resulting adverse impact on costs and performance and other risks and uncertainties, including those described in each management discussion and analysis.
In addition, forward-looking information is based on various assumptions including, without limitation, assumptions associated with exploration results and costs and the availability of materials and skilled labour. Should one or more of these risks and uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in forward-looking statements. Accordingly, readers are advised not to place undue reliance on forward-looking information. Except as required under applicable securities legislation, the Company undertakes no obligation to publicly update or revise forward-looking information, whether as a result of new information, future events or otherwise.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Contacts:
Silver Quest Resources
Investor Relations
604-687-3959
604-687-1448 (FAX)
info@silverquest.ca
www.silverquest.ca