Grandich just issued this on his blogSilver Quest has been on the move lately thanks in part to the goldrush in the Yukon and the fact SQI has a smorgasbord of properties fromadvance to early stage throughout three key districts in Canada. SilverQuest has a big year ahead of them as they are planning extensiveprograms in BC, Yukon and Ontario, with major programs happening on allfive of the Company’s main assets, and significant programs aimed atevaluating and defining drill targets on the remaining properties. Thisinstalment covers the work that Silver Quest is planning on completingthroughout 2010 and what it could mean for the company.
BC Properties – The Foundations of Growth
Silver Quest has a suite of advanced stage exploration projects incentral BC. These are the basis of which the company has been buildingupon over the past two years. Although Silver Quest has been inexistence (under various names) since the 1960’s it has undergone are-branding and re-focusing to excel in the current market. The coreasset of the company (besides management) is the Capoose Project whichhas a newly defined inferred NI 43-101 resource estimate of 53 milliontonnes grading 0.77 g/t gold equivalent for a total of 1.32 millionounces of gold equivalent. The Capoose deposit is open in alldirections and is mineralization from surface to its current depth.Silver Quest announced this morning that a 2.2 million dollarbudget has been approved by its board of directors to further exploreCapoose for the remainder of 2010. Silver Quest is planningapproximately 35 drill holes with depths ranging between 250 and 300meters in a grid orientation over the southern end of the resource.These holes will be completed for the purpose of refining the currentresource estimate. The planned program also includes exploration drillholes to test known geochemical and geophysical anomalies.
A short distance from Capoose is Silver Quest’s 3T’s Project, whichhas a historical resource of 942,647 tonnes grading 4.89 g/t gold and77.8 g/t silver for a total of 148,135 ounces gold and 2.35 millionounces of silver. A summer program has also been planned for the 3T’sProject which will include 5,000 meters of drilling. 3T’s is anepithermal vein type deposit, and thus the drill holes will be targetingveins at depth.
The Davidson property, located just down the road from Capoose and3T’s is held 100% by Silver Quest, but is under option to RichfieldVentures, who may earn up to 75%. The Davidson property forms part ofRichfield’s Blackwater Project. Richfield is planning a major resourcedefinition drill program of 25,000 meters this summer (approximately20,000 meters will be on Davidson). As many of you saw in one of mylatest postings on Silver Quest, an analyst at LOM has suggested thatthere could be more than 4.25 million ounces of gold which, assumingSilver Quest is diluted to 25% means more than 1 million ounces toSilver Quest.
Yesterday, Silver Quest added another great property, Chuchi North to itsasset mix. The Chuchi North property is located approximately 200meters northwest of Prince George, BC in a major north-south trend thathosts large deposits such as Mount Milligan, Red Chris, Mount Polley, QRand Afton. The Chuchi North property is an early stage explorationplay which helps extend the pipeline of BC properties held by SilverQuest. The property covers 5,200 ha of land and hosts a 3.5 kmgold-in-soil geochemical anomaly with values up to 6.1 g/t gold and waspreviously explored in the late 1980’s by Rio Algom. Silver Quest isplanning an initial exploration program on Chuchi of geophysics andfurther soil sampling.
The Capoose, Davidson and 3T’s properties form a stable base forSilver Quest. They are all advanced stage exploration projects, withtremendous upside potential for resource growth and expansion. SilverQuest anticipates positive results from their field programs this summerand hopes to generate excitement in both its shareholders and some ofthe major mining companies. Almost as a bonus to the solidunderpinning of the BC projects, Silver Quest also holds a largeposition in the White Gold Area of the Yukon and a strategic landholding in the Pickle Crow area of Ontario.
Yukon Properties – The Discovery Potential
Silver Quest is the third largest land holder in the White Gold Areawith more than 150 claims and over 74 thousand acres of rocks toexplore. Not to worry though, they have apparently narrowed down theirtargets and focused in on two main properties. Silver Quest should becompleting extensive early stage exploration programs on Boulevard andProspector Mountain this summer. Over the last couple of weeks theWhite Gold Area has been creating a stir as Kinross issued a bid to takeover Underworld Resources, the largest land holder in the district for$139.2 million.
Early reconnaissance work has been completed on both Boulevard andProspector Mountain by other companies. Boulevard contains a 2.5 kmlong soil anomaly that is strikingly similar to the initial soil anomalyfound at Underworld’s Golden Saddle discovery. Follow-up work thisyear will include geophysics and diamond drilling. Prospector Mountaincontains an area indicative of porphyry style mineralization withbonanza gold, silver and copper values recovered from a 3 km longstructural trend. These values include 82.2 g/t Au, 888 g/t Ag and5.97% Cu, and 55.7 g/t Au, 1375 g/t Ag and 7.38% Cu. A number of otherveins discovered on site require follow-up exploration. The ProspectorMountain Property should see two phases of exploration this summer.Phase One is expected to include geophysics and alteration mapping,followed by phase two which should consist of diamond drilling.
The remaining Yukon properties held by Silver Quest are expected tobe sampled to define drill targets for further exploration next season.The White Gold Area is going to be a busy part of the world thissummer, with helicopters buzzing, drills turning, and geologists fromvarious companies hiking through the hills. There are more discoveriesto be made in this part of the world and Silver Quest seemingly has agood as chance as any with their large land package and the funds tocomplete the work.
Ontario Properties – More Discovery Potential
The property that is creating big news in Ontario right now is PCGold’s Pickle Crow. PC Gold recently drilled 43.28 g/t gold over 13.13meters including 138.89 g/t gold over 4 meters. This is importantbecause Silver Quest’s Slate Falls property is 100 km southwest ofPickle Crow and is hosted within the same suite of greenstone volcanicrocks. Silver Quest’s Slate Falls property has returned values up to857 g/t gold over 0.2 meters in drill core, and from grab samples onsurface. The Slate Falls property is an early stage exploration play,but it is located in the right neighbourhood, has some phenomenalresults from previous work, and has the potential to host somethingbig. Planning of an exploration program on Slate Falls is in the works.
Capital Structure – A shining light
Silver Quest has just over 61 million shares issued andoutstanding. They have over $3.0 million in working capital and over 14million warrants outstanding between 12 and 60 cents. The Companycurrently sits around the 60 cent mark, meaning that many of thesewarrants are being exercised before they expire later this year or nextyear. Silver Quest has sufficient funding to complete their explorationprograms this year, a little extra from the warrants can give them alittle bit of room to expand as results are returned, and mostimportantly, doesn’t appear to need to do a financing at all in 2010(unless of course developments and/or the share price makes a financingprudent at a higher level).
Bottom Line – Gearing up to take-off
Silver Quest is well position both geographically, within major areaplays, and financially, with a good share structure and sufficientfunds. Assuming that Silver Quest gets the results they are hoping forthis summer, it has the ability to launch itself and its shareholdersinto a new realm of growth and discovery. It’s critical to remember thatone can argue they control about 3.2 million gold equivalent of gold,which at the recent going rates for gold in the ground, their currentmarket cap doesn’t even come close to matching. There appears to be lotsof upside potential left in SQI