QGX prices $35 million offering

Vancouver – Mongolian-focused metals and coal explorer QGX (QGX-T, QGXLF-O) has priced its planned $35 million public offering at $4.60 per share.

The company is completing a final short form prospectus for the underwritten offering, of 7.61 million shares, led by brokerage houses CIBC World Markets and Sprott Securities. An over-allotment, or “Green-shoe”, option allows the underwriters an additional 15% or 1.14 million shares.

Major QGX shareholder Barrick Gold (ABX-T, ABX-N), that holds about 9.4% interest, has elected to participate in the offering and maintain its interest.

The company remains active on its Baruun Naran coal project, in Mongolia’s south Gobi region, and on the Golden Hills gold-silver-copper property in the western portion of the country.

Extensive drilling at Baruun Naran continues to define numerous coal seams of both metallurgical and thermal grades, and has extended the strike along the east-west trend. Both past Russian and current QGX exploration of the synclinal structure has shown at least ten separate coal seams over about 1,000 metres of sequence. Coal bearing horizons have been identified over at least a 1.5-by-10 km area of the basin with excellent extension potential.

The Permian basin hosting the Baruun Naran coal deposit is a northeast-southwest striking corridor extending westwards from the large Tavan Tolgoi basin, about 20 km away. Tavan Tolgoi, held by a Mongolian consortium, is estimated to host in excess of 5 billion tonnes of coal resource, with a majority being metallurgical grade and potentially open-pittable.

QGX also recently released positive results from metallurgical testing at Golden Hills. Samples from the Central Valley zone (CVZ) demonstrated good copper, gold and silver recoveries with the project now advancing to the pre-feasibility stage.

Earlier this year, the company completed an independent resource estimate for the CVZ outlining:

CVZ Massive Sulphides:
• Measured and indicated resource of 10.2 million tonnes grading 1.72% copper, 0.39 gram gold per tonne and 5.4 grams silver per tonne;
• Inferred resource of 9.5 million tonnes of 1.29% copper, 0.33 gram gold and 4.5 grams silver;
• Using a 0.8% copper cut-off grade; and

CVZ Oxides:

• Measured and indicated resource of 3.1 million tonnes grading 2.83 grams gold and 18.9 grams silver;
• Inferred resource of 1.75 million tonnes of 2.72 grams gold and 19.5 grams silver;
• Using a 1 gram gold cut-off grade; and

CVZ High-Grade Quartz-Telluride Veins:

• Inferred resource of 696,000 tonnes grading 19.63 grams gold and 35 grams silver;
• Using a 3 gram gold cut-off grade.

The total measured and indicated resource, in the massive sulphides and oxides, hosts contained metals of almost 409,000 oz. gold, 3.6 million oz. silver and 385 million pounds (175,000 tonnes) of copper, all of which equates to about 1.7 million oz. of gold equivalent.

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