SQI samples 3000g/tAg
Silver Quest samples 3,025 g/t Ag at Keno Hill
2009-06-17 07:12 MT - News Release
Mr. Randy Turner reports
SILVER QUEST RESOURCES LTD.: EXPLORATION UPDATE AND SAMPLING RESULTS ON THE KENO HILL PROPERTY, YUKON
SilverQuest Resources Ltd. owns a 100-per-cent interest in 19 quartz miningleases comprising approximately 700 acres within the Keno Hill silverdistrict, in the Mayo mining division, Yukon (see Silver Quest'swebsite for property maps), and is releasing results from the fall 2008sampling program on the properties. The mining leases are located nearKeno City, 45 kms northeast of Mayo and approximately 360 kms north ofWhitehorse, Yukon. Between 1921 and 1988, the Keno Hill Silver Districtproduced more than 217 million ounces of silver with average grades of1,388.6 grams per tonne (g/t) silver (40.5 ounces per ton silver(o/z)), 5.6% lead and 3.1% zinc (Yukon Government's Minfile database).
Themain group, known as the Formo Group, is comprised of 13 leases and iscut by Highway 11 (accessing Keno City) located 2 kms along strike tothe northeast of the former major producer, the Hector Calumet mine,which produced 2.7 million tons with a grade of 1,216.1 g/t (35.47oz/t) silver. Since the 1930's, various companies have conductedexploration on the Formo Group including surface trenching andsampling, underground development on two levels, limited diamonddrilling, and an open cut with minor production. In 1931, 36 tonnesgrading 7,886 g/t Ag (230.0 oz/t Ag) and 60% Pb were mined. In 1961, 13tonnes grading 4,957.6 g/t Ag (144.6 oz/t Ag), 57% Pb and 10.3% Zn weremined and shipped from the Formo Group. Yukon Minfile reports statethat mineralization on the group comprises narrow lenses of galena,sphalerite and minor tetrahedrite in a carbonate gangue within atypical narrow, north-trending, transverse vein cutting schist andgreenstone beneath the Keno Hill (Central) Quartzite.
A YukonOpen File Report (106-D) from 1965 (D.D. Campbell report for PesoSilver Mines) indicates an estimated resource on the Formo Group, asdefined by the underground workings, of 39,900 tonnes grading 548.6 g/tAg (16.0 oz/t Ag), 6.9% Pb and 10.7% Zn (This is a historical resourceestimate, and was not compiled within the definitions and standardsoutlined in National Instrument 43-101, and the Company cautions thatthese historic resource estimates cannot be relied upon). Campbell alsoindicated in this report; "With present (1965) knowledge of the orecontrols it is possible to confirm a fair tonnage of ore with amoderate amount of raising and short drilling. Also, the potential offinding new ore bodies along strike is excellent wherever greenstone orquartzite bands may be encountered."
The Company completed alimited sampling program on the Formo Group to confirm the reportedmineralization on the property. A total of 22 surface samples weretaken, with the best values returned from dump samples (grab samples)at the lower (2700) adit area.
Significant Surface Sample Results from 2008 Sampling Program
Ag Ag Cu Pb Zn
Description Sample (#) (g/t) (oz/t) (%) (%) (%)
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Main 2700 Adit - Galena, grab Keno 019 48.3 1.41 0.002 0.11 0.01
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Main 2700 Adit - Galena, grab Keno 020 3025.0 88.22 0.096 15.85 39.80
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Main 2700 Adit - Galena, grab Keno 021 2837.0 82.74 0.049 19.15 29.60
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Main 2700 Adit - Galena, grab Keno 022 2985.0 87.05 0.011 19.50 0.17
In addition, two grab samples; Keno 028 and Keno 029located approximately 400 m southwest of the open cut area returnedsignificant gold and silver values. Keno 028 returned 4.245 g/t Au(0.124 oz/t Au) and 12.6 g/t Ag (0.37 oz/t Ag). Keno 029 returned 1.020g/t Au (0.030 oz/t Au) and 38.6 g/t Ag (1.13 oz/t Ag).
Thesampling program clearly confirmed the style and tenure of themineralization on the Formo Group on the Company's Keno Hill propertyand warrants additional exploration. Geochemical analysis of the soilswere conducted by Alex Stewart-Eco Tech Laboratory in Kamloops, BritishColumbia, an International Standard ISO 9001:2000-certified laboratory.The samples were analyzed using a 35-element ICPMS package.
TheCompany is presently considering various financing options to completea summer-fall 2009 exploration program including joint venturearrangements with other companies active in the area. With the improvedsilver price, the historic Keno Silver District is experiencing asignificant increase in exploration activity.
The Company alsowishes to announce the granting of incentive stock options to certaindirectors, officers and employees to purchase up to 500,000 commonshares under the Company's Incentive Stock Option Plan. The optionswill be granted for a period of five (5) years, commencing on June 16,2009, exercisable at a price of $0.10 per share.
ALSO COMPANY HAS CASH AND NO DEBT
From the latest MD&A (for the period ending February 28, 2009):
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Cash and Financial Condition
TheCompany's working capital was $214,431 at February 28, 2009 ($39,657 atFebruary 29, 2008), the improvement being the result of the $2,353,000(net) received from the financing completed in April 2008, reduced byexpenditures incurred since that time. The Company’s treasury isexpected to be adequate to fund its corporate overhead during the firsthalf of fiscal 2010, but may be insufficient to fund at least one oftwo property option payments, one for $50,000 due on June 30, 2009, thesecond for $25,000 due on July 4, 2009. Except for the two optionpayments, exploration costs in fiscal 2010 are largely discretionary asongoing exploration activities can be adjusted in light of theCompany’s financial condition going forward.
Silver Quest has nodebt, does not have any unused lines of credit or other arrangements inplace to borrow funds, and has no off-balance sheet arrangements. TheCompany has no current plans to use debt financing and does not usehedges or other financial derivatives.