QGX Ltd.

QGX Ltd.

October 03, 2005 06:00 ET

QGX Identifies 10 Coal Seams at Baruun Naran Coal Project

WATERDOWN, ONTARIO--(CCNMatthews - Oct. 3, 2005) -

Individual seams have minimum strike lengths of 1500-4000 meters

Average widths range from 5 to 20 meters

QGX Ltd. (TSX:QGX) is pleased to announce that ongoing exploration work at the Baruun Naran coal project has defined ten thick coal seams with average true thicknesses of 5-20 m. Drill-hole, trench and geophysical data indicate that individual seams have minimum strike lengths of 1500-4000 m and that the coal seams are still open along strike. Coal is known to occur over at least 2 x 10 sq. km in the Baruun Naran valley. QGX is undertaking an aggressive, five-rig, step-out drilling program in this area.

Coal at Baruun Naran is hosted in a thick sequence of Upper Permian clastic sedimentary rocks known as the Tavan Tolgoi Formation. The stratigraphic thickness of this formation within the Baruun Naran valley is at least 800 m. This same formation also hosts Asia's largest undeveloped metallurgical ("coking") and thermal ("steaming") coal deposit at Tavan Tolgoi, located approximately 20 km to the NE of Baruun Naran. At Tavan Tolgoi, the coal-bearing formation has a stratigraphic thickness of approximately 965 m containing 16 coal seams.

David Anderson, CEO of QGX, commented as follows:

"I am delighted to report that the step-out drilling at Baruun Naran continues to find more coal and add to our geological understanding of the deposit. We have now identified ten 5-20 m thick coal seams and the deposit remains open along strike.

Geophysical surveys have proven effective in directing our drilling. As the survey coverage expands we continue to map known seams and identify new resistors that we believe reflect new coal seams. It would appear from the geophysics that the Baruun Naran syncline is large, well defined and offers excellent opportunity to find a lot more coal."

Stratigraphy of the Baruun Naran Valley

Individual coal seams at Baruun Naran have been labeled alphabetically from oldest to youngest. A stratigraphic column and accompanying table detailing seam characteristics is available under "Key Properties-Baruun Naran" on the QGX website (www.qgxgold.com). Note that gaps have been inserted into the alphabetic sequence to allow for new seams to be added as step-out drilling continues. The stratigraphy outlined here is based largely on the work completed in the eastern half of the Baruun Naran coalfield. A more complete stratigraphy will be presented once the entire 10-km-long valley has been delineated by gradient-array geophysical surveys and drilling.

Seams "M", "N", and "O" (see press releases of August 30th, September 14th and 21st, 2005) have been renamed Seams "H", "G", and "F", respectfully.

The two dominant coal seams remain Seam "H" (formerly called Seam "M") in the east and Seam "T" in the central portion of the coalfield. In addition to these two approximately 15 to 20-m-thick seams, two seams average greater than 10 m in thickness (Seams "P" and "V") and another six seams (Seams "F", "G", "I", "O", "R" and "U") average 5-10 m in thickness.

Geophysical Results

Results from the drilling show that distinct resistive zones in the geophysical data correspond closely to coal seams in the subsurface. Individual resistive zones that correlate with known coal seams exposed by trenching and drilling have been mapped for several km and provide compelling evidence that the coal seams are continuous along strike (see press release of September 21, 2005). A "Coal Distribution" map, showing the surface projection of the ten known coal seams plotted on top of gradient-array resistivity data, is available under "Key Properties-Baruun Naran" on the QGX website (www.qgxgold.com). QGX estimated the strike lengths for the individual coal seams presented in the accompanying table on the basis of gradient-array resistivity data as well as drill-hole intercepts and trench data.

Patrick B. Redmond, Chief Geologist of QGX Ltd., is the Qualified Person as defined by NI 43-101, and has reviewed and verified the results presented in this press release.

QGX has retained the Mineral Services Division of SGS North America, Inc. (Denver, Colorado) to perform laboratory analyses of coal samples from the Baruun Naran exploration program.

About QGX

QGX is a Canadian-based company that has been exploring for mineral deposits in Mongolia since 1994. The Company holds a large area of exploration licenses throughout Mongolia. The Company's most advanced property is the Golden Hills prospect in western Mongolia. QGX has filed an independent NI 43-101 report outlining a resource containing approximately 3.3 million gold-equivalent ounces at the Central Valley Zone of Golden Hills (measured, indicated and inferred). Barrick Gold Corp. holds a 9.5% equity interest in QGX as part of a strategic relationship between the companies.

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

Contact Information

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