QGX Ltd.

QGX Ltd.

February 25, 2005 11:19 ET

QGX Signs Joint Venture With Key Gold on Three Licenses




FEBRUARY 25, 2005 - 11:19 ET

QGX Signs Joint Venture With Key Gold on Three Licenses

WATERDOWN, ONTARIO--(CCNMatthews - Feb. 25, 2005) - QGX Ltd. (TSX:QGX)
announced today that it has signed an agreement with Key Gold Corp. of
Boulder, Colorado whereby Key Gold can earn an interest in the following
three exploration licenses in Mongolia held by QGX: Uhaa Hudag, Bayan
Bulag and Tsaidam.

David Anderson, CEO of QGX Ltd., commented as follows:

"We are pleased to have Key Gold as an earn-in partner to advance these
three licenses, thereby allowing QGX to focus on Golden Hills and other
high-priority projects. We believe that these three properties have good
potential. Key Gold has indicated that it will conduct an active
exploration program this year, which will include drilling on Uhaa Hudag
this spring/summer".

John Anderson, CEO of Key Gold Corp., commented as follows:

"We are excited to have the opportunity to work with the team of people
at QGX who have been instrumental in the success and development of
Mongolia's mineral industry. Having the ability to work on more advanced
projects like Uhaa Hudag, Bayan Bulag and Tsaidam allows us to commence
drilling soon with the goal of developing a gold project much earlier
than grass-roots exploration".

Joint Venture Terms

Key Gold can earn a 60% interest in the three licenses by spending US
$1.5 million on the properties and issuing 500,000 common shares of Key
Gold to QGX over a period of three years ending February 28, 2008. Key
Gold has committed to spend US$400,000 on the properties in the first
year. Should Key Gold fail to spend US$400,000 in the first year, it
will pay any shortfall in cash to QGX and the agreement will be
terminated. Upon completion of the 60% earn-in, Key Gold has the right
to increase its interest in any of the licenses to 75% by funding the
cost of obtaining a positive feasibility study for a mine on that


The three licenses represent mesothermal gold prospects located in the
south-central Gobi desert.

Uhaa Hudag is the most advanced license of the three and consists of a
series of mesothermal gold-bearing quartz veins hosted within
metasedimentary rocks. During 1995 and 1997 QGX did extensive work at
Uhaa Hudaag including trenching, geologic mapping, geophysical surveys
and drilling. Visible gold was found in the quartz veins exposed by a
series of eleven trenches over 1 km of strike distance. The vein system
is contained within an alteration zone up to 120 m wide and 2.5 kms
long. See QGX press release dated November 4, 2002 for further details.

A four-hole drill program by QGX in 2003 to test 200 m of known strike
length returned multiple narrow intersections of significant gold. See
QGX press release dated October 28, 2003 for details of the pervious
drill results.

Bayan Bulag and Tsaidam have not been drilled to date.

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 and is currently conducting
drill programs on two targets (Golden Hills and Shuteen). QGX also has a
carried interest through to production in two advanced exploration
prospects in the south Gobi desert of Mongolia (Kharmagtai -10% and
Ovoot Hyar - 20%) that are being explored by Ivanhoe Mines Ltd. Barrick
Gold Corp. holds a 9.5% equity interest in QGX as part of a strategic
relationship between the companies.

About Key Gold

Key Gold is a Boulder, Colorado based company in the business of
exploring and developing gold and other mineral properties in Asia. The
Company's initial project is a 106 sq. km. gold property south of
Fengcheng in Liaoning Province, China where it has secured all necessary
government licenses and approvals to commence exploration and drilling.
The move into Mongolia is consistent with Key Gold's objective of
exploring and developing mineral projects in Asia.


Contact Information

    QGX Ltd.
    David Anderson
    (905) 689-9442
    QGX Ltd.
    Paul Zweng
    Website: www.qgxgold.com
    The TSX has not reviewed and does not accept responsibility for the
    adequacy or accuracy of this release.