QGX encouraged by new gold and copper-gold prospects

Vancouver Early-stage exploration programs by QGX (QGX-T) in the Gobi region have added three new gold and copper-gold prospects to the company’s existing portfolio in Mongolia.

QGX’s main focus is the Baruun Naran coal project in southern Mongolia, while its most advanced project is the Golden Hills gold-silver-copper project in western Mongolia. The company also carried out prospecting programs at wholly owned licenses in the Gobi region of southern Mongolia, where the three new prospects were discovered.

The prospects include Golden Ram, where a follow-up sampling program identified a strong gold anomaly, defined by 10 assays averaging 4.06 grams gold (ranging from 0.012 gram to 29.3 grams) within an alteration zone of 50 metres by 450 metres that is still open in two directions.

Sampling at the Copper Springs copper-gold prospect returned anomalous gold (up to 2.55 grams) in a series of silica ledges within a 1-km by 1-km leached cap where supergene copper mineralization was observed as malachite coatings on fracture surfaces.

The Hobo Hills copper-gold project returned values from below detection to 3.17% copper within a large volcanogenic massive sulphide (VMS) alteration zone similar to that observed at the Golden Hills project.

Follow-up programs aimed at defining drill targets are planned for next year’s field season. This work will be conducted along with regional programs in western Mongolia for additional targets similar to Golden Hills, and for epithermal gold-silver targets in northeastern Mongolia.

QGX recently completed a $36.5-million financing to carry out work programs at Golden Hills, which has resources containing an estimated 3.3 million gold-equivalent oz., at the Baruun Naran coal project, and at other projects. Barrick Gold (ABX-T) holds a 9.4% equity interest in QGX.

Like other companies exploring in Mongolia, QGX faced a bout of investment uncertainty after certain factions in government proposed changes to the nation’s Minerals Law. The most controversial would give government rights to acquire up to 30% of ‘significant’ mineral deposits, namely those discovered with state funding during the pre-1991 Soviet era, and up to 15% of future discoveries.

After a high-level Cabinet meeting, the government announced it would not seek state participation in deposits discovered by foreign companies without state help or funding, but would support proposals allowing for potential participation in deposits that were previously explored or partially developed by government agencies. The portion of the state interest in each eligible deposit would be equivalent in value to the amount of state funds spent on exploration and definition of the deposit, subject to negotiation with any private property owner.

Another proposal endorsed by Cabinet calls for the introduction of a public auction system for future exploration and mining licenses covering areas where state-funded work has taken place. This provision would also apply to areas surrendered by license-holders and areas where licenses have been revoked. The proposed changes also include measures for improved environmental protection.

These amendments to the eight-year-old Minerals Law must be reviewed by Parliament before they can be enacted into law.

An estimated 230 companies from 31 countries are exploring and developing mineral projects in Mongolia.