Silver Quest Resources Ltd.
TSX VENTURE : SQI

Silver Quest Resources Ltd.

March 04, 2010 08:00 ET

Silver Quest Announces NI43-101 Resource Estimate for Capoose Project

VANCOUVER, BRITISH COLUMBIA--(Marketwire - March 4, 2010) - Silver Quest Resources (TSX VENTURE:SQI) ("Silver Quest" or "the Company") is pleased to announce that a National Instrument ("NI") 43-101 inferred resource estimate has been prepared for its 60% owned gold-silver Capoose deposit by GeoVector Management Inc. ("GeoVector"). The Capoose deposit is located 185 km southwest of Prince George, in central British Columbia. The property is 30 km west of Silver Quest's Davidson Project and 30 km northwest of Silver Quest's 3Ts property. For more information on these properties please visit Silver Quest's website at www.silverquest.ca.

2010 Mineral Resource Estimate

The 2010 mineral resource estimate is based on 98 drill holes and more than 5,000 assay values. All current resources are categorized as inferred as defined by the CIM guidelines for resource reporting. Inferred mineral resources do not demonstrate economic viability, and there is no certainty that these inferred mineral resources will be converted into mineable reserves once economic considerations are applied.

The base case for reporting the mineral resource estimate used a gold equivalent ("AuEq") cut-off grade of 0.40 grams per tonne ("g/t"). The resource estimate at a 0.40 g/t AuEq cut-off is 53.45 million tonnes grading 0.41 g/t gold and 23.93 g/t silver for 699,000 contained ounces of gold and 41,120,000 contained ounces of silver. Results at various gold equivalent cut-off grades are tabulated below.

Inferred Mineral Resource Estimate for Capoose Deposit versus Gold Equivalent (AuEq)* Cut-off

AuEq
Cut-off
(g/t)
Tonnes Gold
Grade
(g/t)
Contained
Gold (oz)
Silver Grade
(g/t)
Contained
Silver (oz)
AuEq
Grade
(g/t)
Contained
AuEq (oz)
0.1 g/t 96,785,363 0.28 871,666 17.59 54,755,024 0.54 1,693,659
0.2 g/t 88,164,480 0.30 850,272 18.77 53,206,709 0.58 1,648,978
0.3 g/t 69,510,922 0.35 784,945 21.22 47,424,322 0.67 1,496,788
0.4 g/t 53,450,298 0.41 699,032 23.93 41,119,662 0.77 1,316,190
0.5 g/t 41,446,345 0.46 612,969 26.49 35,300,905 0.86 1,142,756
1.0 g/t 10,571,828 0.86 293,796 34.24 11,640,233 1.38 468,465
* Gold equivalent (AuEq) is calculated as the sum of the gold content plus 0.015 times the silver content, based upon prices of US$1025/oz. for gold and US$15.50/oz. for silver, which approximate the average prices for these metals over the last two years. (Note: total contained AuEq values may not add exactly because of rounding).

Resource Estimation Process

Assay values used in the resource estimate were verified against assays on drill logs and assay certificates. Drill hole collar locations and down-hole surveys were checked and verified. The mineral resource was estimated using three metre composites of the assay values, with "zero" grade inserted into intervals that were not sampled.

A geological model was constructed of the Au-Ag mineralized zone. This model was used to constrain the composite values chosen for interpolation, and the ore blocks reported in the mineral resource. A block model was constructed using 25 m x 25 m x 5 m blocks in the x, y, and z direction respectively. Grades for gold and silver were interpolated into the blocks by the inverse distance squared method using between four and 12 composites to generate block grades.

The inferred mineral resource estimate has been prepared in compliance with the standards of NI 43-101 by Dr A. Armitage, Ph.D., P. Geol., and J. Campbell, B.Sc., P. Geo., of GeoVector. GeoVector is an Ottawa, Ontario consulting firm specializing in resource estimation, project assessment and project management. 

Dr. Armitage acted as the Qualified Person, as defined in NI 43-101, for the mineral resource estimate component of the technical report. Henry Awmack, P.Eng., acted as the Qualified Person, as defined in NI 43-101, for the geological and exploration components of the technical report and has made a property examination. Dr. Armitage and Mr. Awmack are independent of the Company under NI 43-101. A NI 43-101 report will be finalized and filed on SEDAR within 45 days of the date of this news release. 

Mineralization remains open at depth and along strike within and adjacent to the intrusive rhyolite units. GeoVector recommends additional drilling to increase the overall global resource at Capoose. Based on the significant potential to increase global resources and to improve the resource confidence level, Silver Quest is planning a major diamond drilling program at Capoose this summer.

About the Capoose Project

The Capoose property has been actively explored and drilled since the 1970s. Silver Quest completed 24 drill holes (3,212 m) in 2008 and 2009. The property has also received extensive soil geochemistry and various geophysical surveys. The Capoose deposit contains epigenetic mineralization associated with intrusive rhyolite sills and dykes of Cretaceous age. These rhyolites intruded volcanic tuffs, breccias, flows and argillite. Intrusive rhyolite units are consistently mineralized over significant widths with locally mineralized volcanic and sedimentary wallrocks. Mineralization is associated with disseminated sulphide-garnet clots and sulphide veinlets along irregular fractures. Sphalerite, galena, pyrite, chalcopyrite, pyrrhotite, arsenopyrite and tetrahedrite are the most common sulphide minerals at Capoose.

Effective October 22, 2009, Silver Quest earned a 60% interest in the mineral claim which contains the Capoose deposit. The remaining 40% interest is held by Bearclaw Capital Corp. ("Bearclaw"), which has also retained a 2.25% Net Smelter Royalty ("NSR"). Silver Quest may purchase Bearclaw's 40% interest in the project at any time until October 22, 2011 by paying Bearclaw a sum equal to $2,500,000 plus the amount of the contributions (if any) that Bearclaw may elect to make towards expenditures incurred on the project after October 22, 2009. Silver Quest has the right to elect to pay up to 50% of the $2,500,000 in Silver Quest shares based on the 30 day volume weighted average price of such shares for the 30 trading days immediately prior to such election. In addition, Silver Quest has the right exercisable at any time to reduce Bearclaw's 2.25% NSR to a 1.25% NSR by paying Bearclaw $1,500,000.

As a result of recent staking of 15,754 hectares of mineral claims and the optioning of additional mineral claims, all of which form a contiguous block, the property currently consists of 70 claims totalling more than 30,000 hectares. 

David Pawliuk, P. Geo., Vice-President Exploration for Silver Quest is the Qualified Person, as defined by NI 43-101, for the Capoose project and has reviewed the technical information in this release.

GeoVector has reviewed and approved the information in this news release.

SILVER QUEST RESOURCES LTD.

"Randy Turner"

Randy Turner, President

Certain of the statements made and information contained herein is "forward-looking information" within the meaning of the British Columbia Securities Act. This includes statements concerning the Company's plans at its mineral properties, which involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking information. Forward-looking information is subject to a variety of risks and uncertainties which could cause actual events or results to differ from those reflected in the forward-looking information, including, without limitation, the ability of the Company to continue to be able to access the capital markets for the funding necessary to acquire and maintain exploration properties and to carry out its desired exploration programs; inability to fund the Company's share of costs incurred under joint venture agreements to which it is a party, and reduction or elimination of its joint venture interest as a result; competition within the minerals industry to acquire properties of merit, and competition from other companies possessing greater technical and financial resources; difficulties in executing exploration programs on the Company's proposed schedules and within its cost estimates, whether due to weather conditions in the areas where it operates, increasingly stringent environmental regulations and other permitting restrictions, or other factors related to exploring in the north, such as the availability of essential supplies and services; factors beyond the capacity of the Company to anticipate and control, such as the marketability of minerals, government regulations relating to health, safety and the environment, the scale and scope of royalties and taxes on production; unusually mild winter conditions affecting or delaying the opening of the winter roads and resulting difficulties in transporting materials needed to support various exploration projects and resulting increased costs of transport by air; the availability of experienced contractors and professional staff to perform work in a competitive environment and the resulting adverse impact on costs and performance and other risks and uncertainties, including those described in each management discussion and analysis. In addition, forward-looking information is based on various assumptions including, without limitation, assumptions associated with exploration results and costs and the availability of materials and skilled labour. Should one or more of these risks and uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in forward-looking statements. Accordingly, readers are advised not to place undue reliance on forward-looking information. Except as required under applicable securities legislation, the Company undertakes no obligation to publicly update or revise forward-looking information, whether as a result of new information, future events or otherwise.

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

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