Silver Quest picks up the Bouvette property in Yukon

Investors snapped to attention when drilling at the Tiger Zone in the middle of  Atac Resources‘  (ATC-V) Rau gold property in the Yukon started yielding intercepts of 38.8 metres of 17.1 grams gold per tonne from 33 metres depth, 32.6 metres averaging 8.91 grams gold from 30 metres, and 75.8 metres of 5.57 grams gold from 12 metres.

 If you missed the boat on Atac, now trading at $5.48 per share(after hitting a 52-week high of $9 on Nov. 11 2010), Silver Quest Resources (SQI-V) has just picked up a property nearby.

In the final days of December Silver Quest signed an option agreement with a private company to pick up the Bouvette property, which it describes as about 12 km northwest of Atac’s Tiger Zone and contiguous to the northern side of the Rau gold project.

The company believes the Bouvette property shares similar geological characteristics with the Tiger Zone including rock type, rock age, and fault structures, as mapped on government surveys.

Silver Quest will acquire a 100% stake in 100 quartz mineral claims covering 1,960 hectares in central Yukon, about 55 km northeast of Keno City.

Silver Quest will make aggregate cash payments of $100,000 and issue 600,000 shares to the private company over a three-year period. It will also have to spend $800,000 on exploration over two years.

The sellers have retained a 2% net smelter return royalty on the property, but Silver Quest has the right to buy back half of the royalty for a cash payment of $1 million at any time after exercising the option. 

A summer exploration program this year will include geological mapping, geochemistry and trenching, directed towards drill target  definition, the junior says.

 At presstime in Toronto Silver Quest was trading at 57¢ per share. The company has traded in a range of 25.5¢ and $1.05 per share over the last 52 weeks and has about 92.2 million shares fully diluted.

Silver Quest also holds several other interesting prospects in the Yukon, some of which are also close to projects that have hit the headlines over the last year.

Its Boulevard property is 35 km south of Kinross Gold‘s (K-T, KGC-N) Golden Saddle deposit at its White Gold property, and 10 km southwest of Kaminak Gold‘s(KAM-V) Coffee gold discoveries.

Discovered in 2008, Boulevard is a 2.5 km gold-arsenic-antimony anomaly 135 km south of Dawson City. Last year Silver Quest completed 3,006 metres of drilling, 58 line km of ground geophysics and detailed soil sampling. It can earn a 100% interest from Rimfire Minerals and Northgate Resources (NAU-T) by making cash payments totaling $200,000, issuing 1 million shares and spending $3 million over a 5-year period. The property is subject to a 2% NSR, which the company has the option to buy 0.5% of for $750,000.

Silver Quest also has an option agreement with Tarsis Resources (TCC-V) to earn a stake in the Prospector Mountain gold project. Silver Quest believes the property hosts a high-level gold-copper porphyry system on its eastern side with peripheral epithermal high-grade gold-silver-copper veins occurring on the western side of the property.

The property lies within the Dawson Range, an un-glaciated portion of the Tintina Gold Belt. Rock samples have returned 82.2 grams gold per tonne, 888 grams silver per tonne, and 5.97% copper.   

Silver Quest can earn an initial 60% interest in the property with cash payments totaling $300,000, issuing 1 million shares and spending $4 million on exploration over a four-year period. It can earn an additional 10% by completing a feasibility study within 36 months of earning its 60% interest. In 2010 Silver Quest completed eight diamond drill holes (1,463 metres) on the property.

The junior owns 100% of the Keno property in the Keno Hill silver district, 7 km from Keno City, 45 km northeast of Mayo and about 360 km north of Whitehorse.