QGX Ltd.

QGX Ltd.

May 01, 2008 07:30 ET

QGX Enters into Pre-Mining Agreements with the Government of Mongolia

WATERDOWN, ONTARIO--(Marketwire - May 1, 2008) - QGX Ltd. (TSX:QGX) is pleased to announce that the Company has entered into pre-mining agreements for the Golden Hills (Cu-Au-Ag) and Undur Tsagaan (W-Mo) projects with the Mineral Resource and Petroleum Authority ("MRPAM"), an agency of the Government of Mongolia, regarding work to be conducted by QGX during pre-mining operations and stages of development. Each agreement specifies, among other things, that QGX will conduct a final feasibility study, complete an environmental impact study, and gain approval for final plant design for each project. The pre-mining operations for Golden Hills and Undur Tsagaan are specified to be completed by April, 2011.

Paul Zweng, President/Chief Executive Officer of QGX Ltd., commented as follows:

"We are pleased to have reached these agreements with the Mineral Resource and Petroleum Authority for the development of these two key projects. These agreements pave the way for the projects to obtain all necessary permits and approvals for mining. Once completed, the operations are mandated to reach full production within one year's time.

The mining license certificates for the Undur Tsagaan and Golden Hills projects were delivered to QGX in February and March, respectively. We are pleased to have concluded the pre-mining agreements with MRPAM in a direct and straight forward manner over a period of several weeks, thereby allowing these projects to move ahead."

About Golden Hills

QGX announced on April 26, 2007, the filing on SEDAR of the NI 43-101-compliant preliminary economic assessment regarding the development of the Company's 80%-owned copper-gold-silver resource at the Central Valley Zone at Golden Hills. The Study defines a two-stage development plan with a mine life of 15 years. The operation commences with open-pit mining of the gold-silver oxide resource followed by underground mining of the copper-gold-silver sulphide and high-grade quartz-telluride vein resource. The project is financially robust with an after-tax NPV (at 10% discount rate) of US$83 million and an IRR of 27% (100% equity basis) using long-term prices of $1.50/lb copper, $529/oz gold, and $9.08/oz silver.

About Undur Tsagaan

Undur Tsagaan is QGX's second major metals project (the first being the Central Valley Zone copper-gold-silver project at Golden Hills, western Mongolia). The project is located in eastern Mongolia near paved highway, rail, water, power, and a potential work force located at Undurkhan (population approximately 16,500), the aimag (provincial) capital of Khentii.

Known mineralization at Undur Tsagaan occurs near the surface as quartz veinlets containing molybdenite, wolframite, and scheelite hosted within Mesozoic granitic porphyry and Devonian schist and gabbro-diabase intrusions. A resource of 141 million metric tonnes @ 0.124% WO3, 0.019% Mo, 0.03% Be, 0.08% Bi (C1 + C2 category) and an additional 60 million tonnes @ 0.11% WO3, 0.03% Mo, 0.03% Be, 0.01% Bi (P1 category) was defined in 1982. These figures are not NI 43-101 compliant and constitute a historical resource.

The historic resource estimates above for Undur Tsagaan were completed prior to implementation of NI 43-101. These historic resource figures have not been re-defined to conform to CIM approved standards as defined by NI 43-101. The resource estimates have been obtained from sources believed to be reliable and are relevant. The Company is not treating these historical estimates as NI 43-101 defined resources or reserves verified by a qualified person. Until such time as the Company is able to verify and classify these historic resources according to CIM standards, they should not be relied upon.

Qualified Person

Mr. John Thompson, Vice President Operations of QGX Ltd. and a qualified person as defined by NI 43-101, has reviewed and approved the information contained in this release.

About QGX

QGX is a Canadian-based company that has been exploring for mineral deposits in Mongolia since 1994. QGX's two most advanced properties are the Baruun Naran and the Golden Hills projects. In January 2008 QGX announced that an independent 43-101 pre-feasibility study for Baruun Naran showed a net present value (discounted at 10%) of US$499 million on an after-tax basis. QGX announced in August 2007 an independent NI 43-101 resource for coking and thermal coal at Baruun Naran comprised of 93.3 Mt of measured and 159.6 Mt of indicated (252.9 Mt contained in measured and indicated) and 11.1 Mt of inferred resources. QGX filed in April 2007 an independent NI 43-101 report outlining a positive preliminary economic assessment for its copper-gold-silver project at Golden Hills. Barrick Gold Corp. holds an approximate 9% equity interest in QGX as part of a strategic relationship between the two companies.

This press release includes certain "forward-looking statements". All statements, other than statements of historical fact, included herein, including without limitation, statements regarding potential mineralization, results and future plans and objectives of the Company are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statement.

The TSX has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • QGX Ltd.
    David Anderson
    Executive Chairman
    (905) 689-9442
    QGX Ltd.
    Paul Zweng
    (925) 855-0505
    Website: www.qgxgold.com