Hard Rock Analyst on SQI
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"Silver Quest (SQI-V;
.40) or its JV partners are now drilling on three projects; one in the White Gold camp and two others in British Columbia. SQI should be one of the more busy reporters over the next few months.
JV partner Richfield Ventures (RVC-V) has been drilling for close to three months at the Davidson project its earning 75% of from Silver Quest. The relative lack of news from this program has been hampering both stocks. SQI is back trading in the range it was in before RVC’s spring run up. Going forward, Silver Quest’s value should be determined more by its own exploration efforts and good news from RVC would be a bonus.
SQI is completing a planned 13 hole program at the Boulevard project located southwest of Kaminak’s Coffee project. Boulevard has generated some interesting trench and drill results from limited past work; some good drill results seem a likely outcome here. SQI has been an aggressive property acquirer throughout the White Gold camp. Early stage programs will be ongoing in several areas. It’s still early enough in the season for SQI to either expand the Boulevard program or to get a drill program done in another location if it likes the look of the new targets. We have not seen a work start announcement from the nearby Prospector Mountain project but expect one soon.
Drilling is also ongoing with two rigs at the Capoose project in central BC. Capoose hosts a low grade gold silver resource that SQI is working to expand with the current 10,000 metre program. The project is still not well understood and there is room for both expansion and surprises. SQI drilled several holes here last year with grades well above the resource average. If it can continue to expand Capoose with holes that pull up the overall grades it can add a lot of potential value here.
The disappearance of the Richfield JV premium is making SQI available at good prices just as it is about to start its own multiple drill program reporting. There is potential for good holes from all areas. This combination is making SQI a compelling story. We think its time to start accumulation before drill results from Silver Quest’s own drill program start to roll in."
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Note 1 - Capoose Project
In March 2010, SQI announced an inferred NI 43-101 resource estimate for the Capoose Project of 1,316,190 oz AuEq. Mineralization remains open at depth and along strike within and adjacent to the intrusive rhyolite units, and the aim of the current drill program is to increase the global resource and to improve the resource confidence level.
Note 2 - Prospector Mountain Property
Kendra (Geologist/IR SQI) previously told me that it is the plan to work on the Prospector Mountain property through the summer and fall. SQI's camps are currently not set up for winter programs, so they hope to be out of the Prospector Mountain property by October. According to SQI's MD&A of June 16, 2010, the company has proposed a two-phase program. Phase I will include further geological mapping, soil sampling and trenching, directed at the definition of drill targets. Phase II will include 5,000 – 10,000 m of diamond drilling to test the defined targets.
Note 3 - RVC (Blackwater Project)
RVC has bounced off its $1-low, and will most likely see a new run-up in the coming months. According to Peter Bernier (President & CEO RVC), the Blackwater Project should outline a 3 million oz AuEq. resource in a worst-case scenario. In March 2010, LOM (Loewen, Ondaatje and McCutcheon Ltd.) calculated an estimated potential gold resource of 4.25 million oz AuEq. If RVC is able to outline a 4.25 million oz resource, SQI would be entitled to about 1 million oz AuEq.
Guy