VANCOUVER, BRITISH COLUMBIA--(Marketwire - March 29, 2011) -Silver Quest Resources (TSX VENTURE:SQI) ("Silver Quest" or "the Company") ispleased to announce the execution of a formal joint venture agreement withRichfield Ventures Corp. (TSX VENTURE:RVC) ("Richfield") on the Company'sDavidson Property. The Davidson Property is located within the northern portionof Richfield's Blackwater Gold Project, 100 km southwest of Vanderhoof incentral British Columbia. For property map and location, please visit www.silverquest.ca.
Under the terms of the joint venture, Silver Quest holds a 25% participatinginterest, 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 thejoint venture to less than 10%, such interest will automatically convert to a1.0% net smelter return royalty payable on production from the DavidsonProperty.
The joint venture parties have approved an initial 2011 work program of $8.6million for the Davidson Property, of which Silver Quest's contribution will beapproximately $1.8 million. This will include approximately 20,000 metres ofdiamond drilling and Silver Quest's share of various studies related to thedevelopment 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% bySilver Quest and 87.5% by Richfield.
Richfield's initial NI43-101 resource calculation for entire Blackwater GoldProject contains an estimated Indicated Resource at a cut-off grade of 0.40grams per tonne (g/t) gold of 53.46 million tonnes at an average grade of 1.06g/t gold containing 1.83 million ounces gold. A further 75.45 million tonnes atan average grade of 0.96 g/t gold containing 2.34 million ounces gold isestimated 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 tocontain 331,000 tonnes at an average grade of 0.92 g/t gold, for 10,000 ouncesof gold in the Indicated category and 46.27 million tonnes at an average gradeof 0.92 g/t gold, for 1.36 million ounces of gold in the Inferred category. Thetable below summarizes the parties' respective interests in the DavidsonProperty resource estimate:
| Davidson Property Resource Estimate (0.4 g/t Gold Cut-off grade) |
|
|
Indicated |
Inferred |
Tonnes
000's |
Gold
g/t |
Contained
Gold ounces |
Tonnes
000's |
Gold
g/t |
Contained
Gold ounces |
| Richfield (75%) |
248 |
0.92 |
7,500 |
34,702 |
0.92 |
1,020,000 |
| Silver Quest (25%) |
83 |
0.92 |
2,500 |
11,567 |
0.92 |
340,000 |
| Davidson Property Total |
331 |
0.92 |
10,000 |
46,269 |
0.92 |
1,360,000 |
As the Blackwater Gold project advances to a Preliminary Economic Assessment(PEA), planned for completion in Q4 of 2011, work expenditures not directly onthe 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 ofmineral resources on the respective properties as determined by the PEA. Thisrelative distribution of mineral resources will continually be updated bysubsequent studies. Once the project construction capital budget is established,the joint venture operator will recommend a formula for sharing the capital costof project development reflecting each partner's economic interest. A series ofconsultants have been contracted to prepare the PEA, planned for completion inQ4 of 2011. This study will consider the potential for a large-scale open pitmine and ore processing facility.
David Pawliuk, P. Geo., Vice-President Exploration for Silver Quest is theQualified Person, as defined by NI 43-101, for the Davidson property and hasreviewed the technical information in this release.
SILVER QUEST RESOURCES LTD.
Randy Turner, President