QGX buoyed by hot holes in Mongolia

QGX (QGX-V), a pioneer in mineral exploration in Mongolia, is capitalizing on some promising drill results at its Golden Hill project by arranging a $3.9-million private placement.

The financing is being done through Octagon Capital and will consist of 3 million shares priced at $1.30, with an option to increase this number by 800,000 shares. The company currently has 20.5 million shares outstanding.

QGX recently completed 10 holes at Golden Hill. Seven of the holes tested the source of subcropping, gold-bearing, quartz-chalcedony boulders along a 500-metre portion of the geophysically defined Central Valley zone.

Chip samples taken along the boulder train yielded a peak value of 145 grams per tonne. Of the 121 samples collected, 30% returned values greater than 0.5 gram, and 21 samples yielded better than 1 gram. Based on geologic studies and whole rock analysis, the mineralization has the earmarks of a low-sulphidation, epithermal system.

The first two holes were drilled from the same setup in the central area of the zone. Collared at minus 47, hole 1 intersected 48 metres of oxide gold mineralization averaging 3.79 grams (including 9.1 grams across 17 metres), starting at 18 metres down-hole. The second hole was steepened to minus 67 and hit 71.4 metres of oxide mineralization grading 2.1 grams, beginning at 14 metres down-hole.

QGX stepped back from this section and undercut the two holes with a third hole. Four other holes stepped out along strike in both directions. Results from the remaining holes are expected to be available in the next two weeks.

A second target, Limestone Ridge, situated a further 2 km to the northeast, was tested by three holes. Assays are pending. Previous trenching had returned 15.6 grams across 6 metres. The mineralization is hosted in structurally controlled quartz veins and strongly altered diorite.

QGX can earn an 80% interest in the Golden Hill lease by spending US$450,000 on exploration by 2005. The remaining 20% can be acquired upon earn-in for a payment of US$1 million.

QGX holds a portfolio of exploration licences covering 30,000 sq. km in Mongolia. The company is also being carried with a 10-20% interest through to production in three advanced prospects being explored by Ivanhoe Mines (IVN-T).