QGX Ltd.
TSX : QGX

QGX Ltd.

August 30, 2005 06:00 ET

QGX Intersects 28 M Thick Coal Seam Down Dip of Metallurgical Grade Seam

WATERDOWN, ONTARIO--(CCNMatthews - Aug. 30, 2005) - QGX Ltd. (TSX:QGX):

BN05013 intercepts 19.7 m seam (estimated true thickness)

BN05015 intercepts 10.2 m and 11.2 seams

BN05016 intercepts 22.6 m seam

BN05017 intercepts 17.8 m seam

BN05018 intercepts 28.0 m seam

BN05020 intercepts 17.5 m and 11.4 seams

QGX Ltd. is pleased to announce that Hole BN05018 cut a 28 m thick coal seam (estimated true thickness) in what is now designated as Seam "M"-the thickest coal seam yet encountered at Baruun Naran. This intersection represents the down-dip extension of the same coal seam that yielded metallurgical ("coking") coal properties in Hole BN05001 (see press release of August 3rd).

Prior to this round of drilling, QGX had collared only one hole in the eastern portion of the 10+ km long coalfield at Baruun Naran (see press releases of May 18th and July 13th). That one hole, BN05001, yielded 14.5 m of metallurgical ("coking") coal, herein called Seam "M". All but one of the holes announced in this press release (Hole BN05012) were drilled to delineate "Seam M". These holes extend and expand Seam "M" and demonstrate that additional seams of coal (Seams "N" and "O") occur stratigraphically below Seam "M" in the east. All three seams remain open along strike.

Seams "M", "N" and "O" are interpreted to form a syncline. The syncline is significant for two reasons: (1) the coal seams are "repeated" into two fold limbs, thereby doubling their tonnage potential and (2) the amount of near-surface coal is doubled, thereby increasing the potential for open-pit mining methods to be applicable at Baruun Naran.

A drill-hole location map and two cross sections showing the drill holes and syncline are available on our website at www.qgxgold.com in the Key Properties-Baruun Naran section. Please see Table 1 below for a summary of the drill-hole results for BN05012-20.

David Anderson, CEO of QGX, commented as follows:

"The drill holes reported in this release represent our first opportunity to follow up on the success we had testing metallurgical coal in (l1)hole BN05001. Not only have we encountered multiple intercepts of Seam "M" in excess of 20 m thickness, but the s(l2)eam is also repeated by folding thereby doubling the potential amount of coal. To put this in perspective, the average thickness of coal in the Powder River Basin, the single largest source of coal being mined in the United States, is just over 24 m. As well, most of the coal currently being mined in western Canada is contained in seams less than 10 m thick.

We're just getting started at Baruun Naran, but we are encouraged by the results to date. We are going to continue exploring this property at an aggressive pace."

Interpretation of Drilling Results

Drill holes BN05013-20 indicate that Seam "M" forms a shallow syncline (fold) along Sections 37,200E and 37,150E. The thickest portions of Seam "M" appear in the hinge of the syncline (Hole BN05018 on Section 37,200E) whereas thinner portions occur in the limbs of the fold (Holes BN05013 and BN05015 on Section 37,200E). Because of the fold, Seam "M" is "repeated", thereby doubling the potential tonnage (that is, Seam "M" occurs in a south-dipping limb and a north-dipping limb). Seam "M" remains open on strike where it is currently being delineated by additional drilling.

Two other coal seams, herein designated as Seams "N" and "O", occur stratigraphically below Seam "M". These two seams represent the down-dip extension of the same two coal seams that were intersected below Seam "M" in BN05001. In BN05001, these two seams yielded lower coal quality characteristics than those exhibited by the metallurgical ("coking") coal contained in Seam "M" intercepted higher in the hole. Although generally less thick(l3) than Seam "M", Seams "N" and "O" may occur in widths exceeding 10 m (e.g., 11.2 m of estimated true thickness contained in Hole BN05015) and therefore constitute sizeable coal targets in themselves.

Note: No laboratory results for the coal intercepts presented in Table 1 have been completed to date. Therefore definitive statements regarding the coal rank or properties for these intercepts cannot be made at this time.

Seam "M" was cut in all of the recent drill holes except Holes BN05012 and BN05019. BN05012 was drilled several km to the west to test a 12 m thick coal seam exposed in an exploration trench. This hole was abandoned before reaching the target because of poor ground conditions and excessive water. Hole BN05019 was collared in the footwall of Seam "M" and cut Seams "N" and "O".

Exploration Program

QGX continues to expand the exploration program at Baruun Naran. A third drill rig commenced drilling on August 4th and a fourth drill rig is scheduled to arrive in September. In addition, a geophysical program to test for coal seams and structural features beneath 1-10 m of cover is currently ongoing and yielding positive results. Current drilling continues to target Seam "M" in the east as well as an unnamed seam of metallurgical coal cut by Hole BN05002 in the central portion of the coalfield.



Table 1. Drill Results for BN05012 through BN05020, Baruun Naran,
Mongolia

Drill-Hole Hole Measured Estimated True
Number Type Interval Thickness Thickness1,2
------------------------------------------------------------------------
From To Seam Net Coal Seam Net Coal
(m) (m) (m) (m)
------------------------------------------------------------------------
BN05012 C Target not reached-poor ground conditions
------------------------------------------------------------------------
------------------------------------------------------------------------
BN05013 RC 62.50 90.30 27.80 24.50 19.66 17.32
------------------------------------------------------------------------
------------------------------------------------------------------------
Penetrated seam drilled
BN05014 C 34.25 82.90 48.65 sub-parallel to bedding
------------------------------------------------------------------------
BN05014 C 201.36 207.92 6.56 5.88 6.46 5.79
------------------------------------------------------------------------
BN05014 C 244.72 250.40 5.68 2.83 5.66 2.82
------------------------------------------------------------------------
BN05014 C 252.23 256.87 4.64 2.97 4.62 2.96
------------------------------------------------------------------------
------------------------------------------------------------------------
BN05015 RC/C 41.80 52.40 10.60 9.90 10.24 9.56
------------------------------------------------------------------------
BN05015 RC/C 83.50 95.10 11.60 8.20 11.20 7.92
------------------------------------------------------------------------
BN05015 RC/C 101.70 107.30 5.60 2.90 5.41 2.80
------------------------------------------------------------------------
BN05015 RC/C 141.60 145.45 3.28 2.72 3.72 2.63
------------------------------------------------------------------------
------------------------------------------------------------------------
BN05016 RC 90.70 114.10 23.40 22.50 22.60 21.73
------------------------------------------------------------------------
------------------------------------------------------------------------
BN05017 PCD 44.00 51.30 7.30 7.00 7.27 6.97
------------------------------------------------------------------------
BN05017 PCD 106.30 124.70 18.40 17.50 17.77 16.90
------------------------------------------------------------------------
BN05017 PCD 154.50 161.80 7.30 6.30 6.86 5.92
------------------------------------------------------------------------
BN05017 PCD 211.30 215.10 3.80 3.20 3.57 3.01
------------------------------------------------------------------------
------------------------------------------------------------------------
BN05018 C 109.30 140.20 30.90 28.90 28.00 26.19
------------------------------------------------------------------------
BN05018 C 167.90 174.80 6.90 6.10 6.87 6.08
------------------------------------------------------------------------
BN05018 C 215.00 217.70 2.70 2.70 2.69 2.69
------------------------------------------------------------------------
BN05018 C 220.00 224.30 4.30 3.90 4.28 3.89
------------------------------------------------------------------------
------------------------------------------------------------------------
BN05019 PCD 69.60 75.90 6.30 4.30 4.83 3.29
------------------------------------------------------------------------
BN05019 PCD 148.20 160.00 11.80 9.60 9.04 7.35
------------------------------------------------------------------------
------------------------------------------------------------------------
BN05020 PCD/C 77.20 98.60 21.40 19.70 17.53 16.14
------------------------------------------------------------------------
BN05020 PCD/C 124.70 138.65 13.95 10.56 11.43 8.65
------------------------------------------------------------------------
BN05020 PCD/C 187.10 190.70 3.60 3.60 2.95 2.95
------------------------------------------------------------------------
BN05020 PCD/C 213.10 215.70 2.60 2.60 2.13 2.13
------------------------------------------------------------------------
Footnote 1: Calculated from measured (apparent) seam thickness and
measured (apparent) net-coal thickness using estimated seam
attitude (dip) and angle of bore hole. Seam attitude values
are estimates based on current understanding of sub-surface
geology and structure.

Footnote 2: Coal seams listed in Table 1 are based on a 2-m cutoff,
true estimated thickness. Hole-Type Abbreviations: C= Core;
PCD = Poly-crystalline diamond; RC = Reverse circulation;


Table 2. Location and Orientation of BN05012C through BN05020C

------------------------------------------------------------------------
Drill
-Hole Elevation Local Plunge
Number Local Grid UTM Coordinates (masl) Grid UTM (degrees)
------------------------------------------------------------------------
Azimuth Azimuth
Easting Northing Easting Northing (degrees)(degrees)
------------------------------------------------------------------------
BN05012 28826 29884 512435 4824479 1536 180 155 -60
------------------------------------------------------------------------
BN05013 37195 30501 519759 4828574 1588 --- --- -90
------------------------------------------------------------------------
BN05014 37223 30683 519708 4828752 1591 180 155 -60
------------------------------------------------------------------------
BN05015 37230 30630 519736 4828707 1591 0 335 -60
------------------------------------------------------------------------
BN05016 37149 30555 519695 4828604 1589 180 155 -60
------------------------------------------------------------------------
BN05017 37185 30569 519721 4828632 1589 0 335 -60
------------------------------------------------------------------------
BN05018 37232 30613 519745 4828692 1590 180 155 -70
------------------------------------------------------------------------
BN05019 37200 30430 519799 4828490 1583 --- --- -90
------------------------------------------------------------------------
BN05020 37150 30640 519658 4828677 1586 0 335 -60
------------------------------------------------------------------------


Mr. David Anderson, President/CEO 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. Mr. Kirk Weber, Vice President of Norwest Corporation and a Qualified Person as defined by NI 43-101, has reviewed and approved the information contained in Table 1. QGX has engaged Norwest to provide consulting services regarding the exploration and evaluation of the Baruun Naran coal deposit. Norwest has extensive coal experience in Mongolia including completing a feasibility study of the Tavan Tolgoi coal deposit for the Mongolian Ministry of Infrastructure and Development, providing advisory services to the operating coal mines at Shivee Ovoo and Bagaa Nuur, and overseeing coal exploration programs in Mongolia for other multi-national mining and exploration companies.

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
    CEO
    (905) 689-9442
    or
    QGX Ltd.
    Paul Zweng
    COO
    (925) 855-0505
    Website: www.qgxgold.com