QGX sees positive metallurgy for Golden Hills (October 24, 2005)

Vancouver — Metallurgical testing of samples from QGX’s (QGX-T, QGXLF-O) Golden Hills project, in western Mongolia, has yielded positive results from both the massive sulphides and the high-grade quartz-telluride veins.

The samples, taken from the Central Valley zone, demonstrated good copper, gold and silver recoveries. Preliminary batch testing of enriched supergene massive sulphides (including primary copper mineralization) delivered copper recoveries of 94.3%, producing a concentrate of 31.1% copper. Gold and silver recoveries from the supergene material came in at 58% and 77%, respectively.

The primary sulphide hypogene material showed copper recoveries of 90.1%, producing a concentrate averaging 25.3% copper. Lower gold and silver recoveries, 29% and 36%, respectively, are attributable to losses due to pyrite removal facilitating a cleaner concentrate.

Test processing of the high-grade quartz-telluride veins also yielded excellent recoveries with 93-97% of the gold extracted and 80-97% of the silver to produce a concentrate averaging 330 grams gold per tonne and 247 grams silver per tonne.

Metallurgical testing was conducted by engineering firm AMEC Americas, which has recommended the project proceed to the prefeasibility stage following the positive results from the three different ore types. AMEC has tabled some additional metallurgical work to be conducted, in addition to QGX’s sample collection for initial column testing of the gold-silver oxide ores.

Earlier this year, the company completed an independent resource estimate for the Central Valley zone (CVZ) at Golden Hills outlining the following:

CVZ massive sulphides:

– using a 0.8% copper cutoff grade, measured and indicated resource of 10.2 million tonnes grading 1.72% copper, 0.39 gram gold and 5.4 grams silver; and

– inferred resource of 9.5 million tonnes of 1.29% copper, 0.33 gram gold and 4.5 grams silver.

CVZ oxides:

– using a 1 gram gold cutoff grade, measured and indicated resource of 3.1 million tonnes grading 2.83 grams gold and 18.9 grams silver; and

– inferred resource of 1.75 million tonnes of 2.72 grams gold and 19.5 grams silver.

CVZ high-grade quartz-telluride veins:

– using a 3 gram gold cutoff grade, inferred resource of 696,000 tonnes grading 19.63 grams gold and 35 grams silver.

The total measured and indicated resource hosts contained metals of almost 409,000 oz. gold, 3.6 million oz. silver and 385 million lbs. (175,000 tonnes) of copper, or about 1.7 million oz. of gold equivalent oz.

Additional contained metals of 693,000 oz. gold, 3.3 million oz. silver and 270 million lbs. (123,000 tonnes) of copper is hosted in inferred resources. Combined, the inferred metal content comes to over 1.6 million gold equivalent oz.

QGX has earned an 80% stake in Golden Hills and holds a right of first refusal on the remaining 20%. QGX can buy the balance for US$1 million.

The company believes Golden Hills is part of a larger VMS (volcanogenic massive sulphide) belt or district with potential to host other copper-gold-silver deposits in the area.

Shares of QGX have rallied to the $5.50 level, setting a new 52-week high in trading. The company posts an almost $200-million market capitalization given its 36 million shares outstanding.