New Goldquest execs bring extensive Dominican experience

Vancouver – Goldquest Mining (GQC-V) has undergone significant management changes as it prepares to advance its prospects in both the Dominican Republic and Spain.

Recent additions to the team include Julio Espaillat as president and chief executive and Bill Fisher as chairman, who together brought on-line the only operating gold-copper mine in the Dominican.

Together, they and the rest of the Goldquest team are working to consolidate and advance several discoveries and prospects established since the company started working in the Dominican in 2001.

The new heads of the company bring extensive knowledge of the people and the geology of the country thanks to years of previous work there.

Fisher was CEO of Globestar Mining between 2000 and 2008, while Espaillat served as president and general manager of Globestar’s wholly-owned subsidiary in the country. Together they brought the Cerro de Maimon project from a simple prospect to an operating mine.

“We took it all the way from acquiring the exploration project right through to production,” said Fisher in a phone interview.

A knowledge of the bureaucracy and individuals involved helped Fisher navigate the permitting process efficiently. While dialogue with the government had been going on for some time, Globestar managed to actually permit the mine in under five months. Globestar has since been bought out by Perilya (PEM-A) of Australia for roughly $175 million.  

As to coming on board Goldquest, Fisher said he got to know the Goldquest team well, along with the rest of the small geologic community on the island, after years of working in the country. He saw the transition as a good fit and the properties interesting enough to draw him back.

“It’s a great bit of land,” said Fisher, “I just love the property. So I thought well I’ll give it a go, let’s see if we can make something happen as they say.”

This year the company is targeting its Escandalosa and Las Animas prospects in the Dominican and its Toral project in Spain.

Last fall Goldquest released an initial resource estimate for Escandalosa that totalled 4.9 million inferred tonnes grading 2.6 grams gold per tonne, for 406,000 oz. gold. last year’s drill results included 26 metres grading 11.4 grams gold and 53 metres grading 3 grams gold from the target.

The company plans to drill roughly 40 holes over about 3,500 metres at Escandalosa this year that will be both infill and step-out. Fisher said some would be more conservative but there will be a few big step-outs to “see how big this thing can be.”

Fisher said the target was interesting because it’s a new discovery from scratch with great promise.

“It’s a genuine clean discovery,” said Fisher. “What I like is it’s open-pittable for sure…it’s flat-lying and its 2.5 grams gold.”

Escandalosa was discovered while Goldfields (GFI-N) was doing thorough survey, sampling and other ‘grunt work’ as part of a $6 million program to earn 60% of Goldquest’s Dominican portfolio. Then in 2009 Goldfields decided to hold off investing any more in the project and Goldquest regained 100% ownership in exchange for 8.6 million shares and a 1.25% net smelter return royalty. Goldfields is now Goldquest’s biggest shareholder.

Goldquest will also be drilling its Las Animas target. Back in 2007 the company’s stock price soared from 40¢ to well over a dollar after releasing initial results from Las Animas including 142 metres grading 2.5 grams gold, 36.58 grams silver, 2.59% copper and 1.91% zinc and 106 metres carrying 2.72 grams gold, 36.75 grams silver, 2.29% copper and 2.09% zinc.

The excitement died down quite a bit when the discovery looked smaller than anticipated, but Goldquest still sees potential there. The prospect currently hosts an indicated resource of 1 million tonnes grading 2.95 grams gold, 2.7% copper, 3.36% zinc and 58.6 grams silver, while the exploration strategy at Las Animas will be to add tonnage rather than follow the high-grade mineralization deeper.

Finally, the company has a 100% interest in the Toral zinc-lead-silver project in Spain that it acquired from Lundin Mining (LUN-T). The project has a historic, non-National Instrument 43-101 compliant resource of 5.4 million tonnes grading 9% zinc, 6% lead and 45 grams silver from 1997. The company will be working to establish a compliant resource and advance the project, taking advantage of the excellent local infrastructure.

Overall Goldquest is planning on spending about $3 million on exploration in 2011 from the $3.9 million it had on hand at the end of 2010. Fisher said the company would likely refinance at the end of the year once the exploration results are in.

The company also has a number of other interesting prospects in the Dominican thanks to extensive survey work in the past, but will be concentrating for now on its most advanced targets.

After 10 years in the country, Goldquest looks to be establishing itself just as the Dominican itself is emerging with the first new mines in a generation.

The Globestar mine was the first built in the country for 30 years, with Xstrata‘s (XTA-L) Falcondo nickel mine the last before that.

Then of course there is the massive Pueblo Viejo mine being built by Barrick Gold (ABX-T, ABX-N) and Goldcorp (G-T, GG-N). The mine, expected to go into production by the end of the year, has proven and probable reserves of 23.7 million oz. gold and is expected to produce over a million oz. a year.

Investors are starting to take note, with Goldquest’s stock price rising from around 10¢ last September to now hovering around 45¢. The company has 103 million shares outstanding.