Conquest Resources Limited
TSX VENTURE : CQR

Conquest Resources Limited

June 28, 2011 07:00 ET

Conquest Reports First Quarter Financial Results

2011 Exploration Drilling on Alexander Gold Project, Red Lake, Ontario

TORONTO, ONTARIO--(Marketwire - June 28, 2011) - Conquest Resources Limited (TSX VENTURE:CQR)reports that it has filed its unaudited financial statements and MD&A for the first quarter ended March 31, 2011. The documents are available under the Company's profile at www.sedar.com and on its website at www.conquestresources.net.

For the three-month period ended March 31, 2011, the Company recorded a loss of $234,000 ((0.003) per share), compared to a gain of $43,000 (0.0001 per share) for the three-month period ended March 31, 2010. The loss in the period ended March 31, 2011 included the net income tax loss on the renunciation of the flow-through shares of $237,000, compared to an income tax recovery of $117,000 in the period ended March 31, 2010, and an unrealized gain to market of $112,000 (2010 - $18,000) on the value of marketable securities.

The Company had a working capital surplus of $4,035,000 at March 31, 2011, compared to a surplus of $4,965,000 at December 31, 2010. Cash and short-term investments (including restricted cash) of $1,270,000 at March 31, 2011 decreased from $2,282,000 at December 31, 2010, primarily as a result of exploration expenditures during the period and a prepayment of $500,000, which will be deducted from future drilling costs during the next six months.

At March 31, 2011, the Company held $3,120,000 in marketable securities, of which $3,066,000 represented the market value of the Company's 100,000 shares of Detour Gold. Total assets increased to $10,017,000 at March 31, 2011 from $9,868,000 at December 31, 2010.

ALEXANDER GOLD PROJECT – 2011 EXPLORATION DRILL PROGRAM

Conquest resumed drilling at its Alexander Gold Project at Red Lake in late January 2011, following a short break during the holiday season in December. During the quarter, the Company completed four holes of this program, all of which intersected low grade gold mineralization. A total of approximately 5,500 metres of drilling has been completed year-to-date.

The first hole of 2011, hole CR-11-044 was collared in a steeply dipping northerly direction at the Sulphide Shear Zone under the central portion of the Property and was completed to a hole depth of 1,365 metres. The hole was planned to undercut all previous drilling at a depth of 1,000 metres depth in the area to target the down dip extension of the structure and mineralization which is known to exist near to surface at the Sulphide Shear Zone.

The hole intersected several zones of shearing between one and four metres in thickness (unknown true thickness) below a vertical depth of 400 metres within the Balmer Assemblage. Hole CR-11-044 was terminated immediately below the Bruce Channel Formation Unconformity.

Core from hole CR-11-044 has been sampled extensively. One assay returned 1.55 grams of gold per tonne over 1.00 metre within a sheared, hornblende-chlorite-garnet bearing basalt at a hole depth of 470 metres. A second sample from a quartz-monzodiorite intrusive within the footwall of the mineralized shearing above returned 1.49 grams of gold per tonne over 1.17 at a depth of 490 metres. In addition, the hole intersected a broad zone of strong shearing within the Balmer Assemblage basalts over 4.05 metres (unknown true thickness) at a vertical depth of 1,120 metres, which contained strong sulphide mineralization however, no anomalous gold values were found within this zone.

The second hole, CR‐11‐045, was collared in Balmer Assemblage basalt approximately 300 metres north of CR‐11‐044 and was completed to a depth of 909 metres. The hole was terminated in Bruce Channel Formation metasediments. A gold mineralized, intermediate intrusive in the footwall stratigraphy to the targeted extension of the Sulphide Shear Zone returned 0.50 grams of gold per tonne over 5.45 metres, including 1.09 grams of gold per tonne over 0.95 metres of drill core. The Sulphide Shear Zone was not intersected. Interpretation of the core and local geology suggests that the Sulphide Shear Zone has been offset by north‐south oriented faulting.

The third hole, CR‐11‐046, was collared in Balmer Assemblage basalt in a steeply dipping, northerly direction to investigate the area between holes CR-11-044 and -045. The hole was terminated in basalt at a down-hole depth of 1,017 metres. A quartz monzodiorite dyke was found to contain 1.63 grams per tonne gold over 1.25 metres at a depth of 391 metres. Several other intermediate intrusives in the hole were found to contain elevated gold values (100 ppb gold) within relatively unaltered, massive Balmer Assemblage volcanics.

A reactivated fault zone was intersected in hole CR-11-046 at a hole depth of 1,003 metres. Abundant low-angle fractures and faulting in the associated hanging wall and footwall units are suggestive of late stage reactivation contributing to the offset of the Sulphide Shear Zone in this area. Additional drilling is required to investigate the Sulphide Shear Zone under the central portion of the property.

A second drill rig commenced drilling during early April on hole CR‐11‐047 which was designed to target an area under the westernmost portion of the Alexander Property. With the cooperation of Goldcorp Inc., Conquest collared hole CR-11-047 from Goldcorp's adjacent mine property in a steeply dipping, northerly direction to target the deep Balmer Assemblage basalts on Conquest's Alexander Property. The hole was completed to a total hole depth of 1,479 metres in 49 days of drilling. Approximately 930 metres of Huston Formation meta-sediments were cored on Goldcorp's mine property before intersecting the Conquest-Goldcorp southern property boundary at a vertical depth of 915 metres. The Huston-Balmer Unconformity was intersected at a vertical depth of 1,015 metres.

Several strongly altered, sheared and brecciated horizons were intersected over 1 to 3 metres in thickness (unknown true thickness) within the Balmer Assemblage volcanics between 1,015 and 1,215 metres vertical depth however, these zones did not yield anomalous gold values when assayed. A quartz monzodiorite dyke located at an approximate vertical depth of 1,100 metres was found to contain 2.13 grams per tonne gold over 1.60 metres.

The first wedge hole (CR-11-047-W1) of 2011 is currently underway. Hole CR-11-047-W1 was cut from CR-11-047 at a down-hole depth of 320 metres. The hole is planned to test the sheared middle Balmer Assemblage volcanics between holes CR-11-039 and CR-11-040 which are spaced 300 metres apart.

The planned 2011 Exploration Drilling Program at the Alexander Gold Project is estimated to cost $4 million, of which $2 million is estimated for the initial 10,000 metres of drilling and for which the Company's adequately financed. Conquest plans, subject to additional financing, to conduct a further 10,000 metres of diamond drilling in subsequent phases of exploration on the Alexander Property.

The focus of the 2011 program is to test the Balmer Assemblage stratigraphy below the western, central, and southeastern portions of the property throughout 2011 and to continue systematic drilling in untested structures interpreted to extend from Gold Corp's adjacent Red Lake Mine within volcanic lithologies below the 700 metre level at the Alexander Property.

ABOUT THE ALEXANDER GOLD PROJECT

Conquest's Alexander Property lies immediately east of Goldcorp Inc.'s Red Lake and Campbell mines in the heart of the Red Lake Gold Camp on the important "Mine Trend" regional structure and is almost completely surrounded by Goldcorp's land holdings. The Red Lake Mining District has produced in excess of 25 million ounces of gold over the past 60 years.

The important Balmer Assemblage volcanic rocks, which host the majority of gold produced from the Red Lake greenstone belt, and the adjacent Bruce Channel Formation metasedimentary rocks, which host some of the new gold discoveries at Red Lake, have been identified on the Alexander Property. These prospective host rocks lie within the Red Lake Mine Trend structural corridor which extends southeast from Goldcorp's two gold mines on to and across the Conquest Alexander Property. Many of the regional structures that have associated gold mineralization in the area of the two producing gold mines at Red Lake extend eastwards on to the Alexander Property.

QUALIFIED PERSON

Information of a scientific or technical nature contained in this release has been prepared by or under the supervision of Terence McKillen, P.Geo., the Chief Executive Officer of the Company and a Qualified Person within the meaning of National Instrument 43-101 of the Canadian Securities Administrators.

Samples are analyzed by AGAT Laboratories in Mississauga, Ontario using a 50 gram pulp fire assay technique with ICP-OES finish. Conquest employs the use of standards, blanks, and duplicate samples to maintain confidence in the analytical techniques used to determine gold content in its core. Fifteen percent of the samples submitted to the laboratory comprise samples used for quality assurance and control for gold content. AGAT also employ the use standards, blanks and duplicate samples to calibrate on a regular basis within batches.

ABOUT THE COMPANY

Conquest is exploring several gold projects in Ontario. These include the Alexander Gold Project at Red Lake; the Sunday Lake property at Detour Lake in joint venture with Detour Cold Corporation; and, the Smith Lake Gold Project at Missanabie.

Conquest and Detour Gold Corporation are exploring for structurally-hosted gold mineralization under a joint-venture agreement at the Sunday Lake property located along the Sunday Lake Deformation Zone approximately seven kilometres east of Detour Gold's 14.9 million ounce proposed open pit gold mine. Detour Gold, as operator, has agreed to expend $1,000,000 on exploration prior to September 30, 2014 to earn a 50% interest in the Sunday Lake Property.

Conquest holds 100,000 shares of Detour Gold Corporation.

There are currently 95,477,728 shares of Conquest issued and outstanding.

This news release may include certain "forward-looking statements". All statements other than statements of historical fact, included in this release, including, without limitation, statements regarding potential mineralization, resources and reserves, exploration results, and future plans and objectives of Conquest, 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 statements. Important factors that could cause actual results to differ materially from Conquest's expectations are exploration risks detailed herein and from time to time in the filings made by Conquest with securities regulators.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or the accuracy of this release.

Contact Information

  • Conquest Resources Limited
    Terence N. McKillen
    President & CEO
    647-728-4126

    Conquest Resources Limited
    D. Brett Whitelaw
    Vice-President Investor Relations
    604-984-8633

    Conquest Resources Limited
    John F. Kearney
    Chairman
    416-362-6686
    info@conquestresources.net
    www.conquestresources.net