Chevron has $8 million for Goldquest properties

The Toronto-based junior company recently teamed up with Chevron Minerals, which has acquired an option to earn a 50% interest in all of Goldquest’s Red Lake holdings by spending $8 million on exploration over five years.

The two companies are currently putting the finishing touches to the deal, which will see Chevron spend at least $950,000 on the properties during the first year of its option.

“We’re extremely happy with our new partner,” said R. E. (Dutch) Van Tassel, vice-president of Goldquest. “We’re both on the same wavelength when it comes to putting money in the ground.”

The recent agreement means that a large block of ground in the historic Red Lake camp will continue to see exploration work performed over a potential 5-year period.

Goldquest has been working on its Red Lake claims since 1983 and has spent more than $6 million on exploration to date. The company sank a decline on the former Abino property, and also sank a shaft with three levels on its Rowan property.

“These underground projects ate up a lot of our money,” Van Tassel said. “We still believe there are many areas on our properties that require further drilling.”

On the Abino property, Goldquest had outlined about 400,000 tons of reserves grading 0.2 oz gold per ton in a granodiorite-hosted deposit. Underground work showed that the gold occurred in widely spaced quartz fractures.

The old decline on the Abino property is currently used as a training school for underground miners. The Red Lake-Ear Falls development committee has a contract agreement with Goldquest for the use of the Abino underground workings as training facility for miners.

Ken Shannon, a senior geologist with Chevron Minerals in Toronto, said his company has been active in the Red Lake camp for a number of years. “We were originally attracted to the area by the high gold grades associated with the Red Lake camp,” he said. At the Campbell mine, for example, mill head grades average 0.6 oz gold per ton and are among the highest in the country.

“When Goldquest started looking for a partner last year, we were very interested. They (Goldquest) wanted someone who believed in the Red Lake camp, and we shared that interest,” he said.

Using microcomputer-based geological software, Chevron will initially undertake a major compilation and review of previous work on the properties in order to better define targets.

Goldquest is 60%-controlled by Dickenson Mines (TSE), which owns 100% of the Arthur White gold mine at Balmertown, Ont. Shares of Goldquest have traded at 30 cents recently on the Toronto Stock Exchange.

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