GoldQuest Mining (GQC, TSX-V) is one of our top picks for 2011 based on the Gold and base metal resources the company is building in the mineralization-rich Dominican Republic. Of particular interest is the La Escandalosa Gold Property, an exciting near-surface deposit that should grow significantly in size in the weeks and months ahead. A Phase 2 drill program started at Escandalosa in December and initial assay results could come anytime now (the company will be displaying some high-grade intersections from Escandalosa at the PDAC Core Shack March 8 and 9). GoldQuest has developed a quality pipeline of advanced and early stage exploration properties in the DR after more than a decade of intense geological work in that country.
But GoldQuest’s assets extend beyond the DR and include a very attractive zinc-lead-silver deposit in northwest Spain, the Toral Project. The company came out with a NI-43-101 compliant resource calculation for Toral this morning that exceeds the historical estimate by 15%.
Resources in the indicated category are 4.04 million tonnes grading 11.8% lead and zinc (5.3% lead, 6.5% zinc) as well as 41 g/t Ag and 0.11% Cu. Inferred resources are 4.67 million tonnes grading 9.8% lead and zinc (4.44% lead, 5.4% zinc), 32 g/t Ag and 0.14 Cu.
Toral has significant exploration and development upside as a majority of the historical drilling (40,000+ metres) was conducted over one relatively small part of the property. The zone of sulphide mineralization is open along strike to the northwest toward a known lead deposit as well as along strike to the southeast and downdip.
The project is also an ideal candidate for a fast-track to production. The deposit is close to a power line, highway and rail line. A large smelter is located just 300 kilometers away by rail.
“It’s a highly mineralized area that’s been mined since Roman times,” Chairman Bill Fisher told us in an interview with BMR recently. “The Toral Project is really the stepping stone to increasing our land position in the area. We’d like to see this as the basis for an area play. Spain is very easy to work in. Many of our operational crew are Spanish speaking like I am, so it’s a very easy thing for our company to do. The skills we have in the company are very transferable to Spain.”
At Escandalosa, the current round of drilling (approximately 40 holes) has an excellent chance of hitting the centre of the mineralizing system and if that happens, look out. March should prove to be an interesting month for GoldQuest.
The purpose of the current drilling program according to the GQC website is to upgrade and extend the resources reported in the original 43-101.
Do you have information that the intent was to hit “the center of the mineralizing system”?
The 400,000 oz in the prior 43-101 was all inferred ounces and the current program should upgrade this to indicated and perhaps even reserve status as well as adding new inferred.
It will be great to see La Escandalosa discovery upgraded, but if expectations are too high, good news will be seen as bad news.
Comment by george wohanka — March 2, 2011 @ 6:49 am
Words matter! Fisher said a significant milestone had been met.
“GoldQuest’s Chairman, Bill Fisher, commented, “This initial resource estimate is a significant milestone at Toral and lends additional justification for the Company’s continued presence in Spain. We are extremely encouraged with the results of the initial resource estimate prepared by Micon, which shows an increase of approximately 15% over previous historical lead and zinc tonnage estimates.”
Your intro states that the there was a significant 15% increase over historical estimates. Given new technology a 15% increase is not generally considered significant. One may continue to think that it is but so far the company has not said that it was.
I enjoy you site. I am eager to hear what you have to say. My comments are intended to help keep all of us doing the best job we possibly can.
Comment by george wohanka — March 2, 2011 @ 7:34 am
Hi George, a few things to keep in mind…Toral is now in a format that’s acceptable to the market with a 43-101 compliant resource, replacing the historical estimate…this is a first step…GoldQuest has not completed any of its own drilling at Toral, and most of the historical drilling (40,000+ metres) was over just a small section of the property…once GQC really sinks its teeth into Toral, I think you’re going to see even better numbers….plus there’s the surrounding area….I believe they have a very good play developing there…having said that, the DR is still the focus with GQC and Escandalosa is the gem right now….that’s what’s going to drive the stock….the market is much less interested in Spain at the moment but Toral does help to underpin GQC’s fundamental value…
Comment by Jon - BMR — March 2, 2011 @ 7:54 am
Jon, I agree totally. Toral results are indeed a significant milestone for all the reasons you point out. La Escandalosa is of course the most important facet of GQC right now. But even more important is Dr. Sillitoes thesis which in large part involved work on GQC’s Piedra Iman claims. If the thesis proves correct this will be of much greater importance to GQC than even La Escandalosa.
Comment by george wohanka — March 2, 2011 @ 8:04 am
Jon, when you interview Audet of Everton, ask him some hard questions. Why does he use the word “best” so much? It would also help if you asked why he thinks the results are the “best”. For non geologist, polymetalic reults are even more difficult to evaluate. Understanding why he thinks they are so good would help a lot.
“… best holes weve seen yet” todays release
“We are now achieving some of our best gold, silver and copper drill results on this developing VMS target.” The Jan. 27 release.
Comment by george wohanka — March 2, 2011 @ 8:36 am
Market is so crazy. The biggest fear of Toral (pre NI) was that NI could show smaller tonnage than the historical estimate. They increased tonnage! Even if % of Zinc and Lead went down (compared to the historical estimate), increase in tonnage more than made up for that. And the stock is down. Just crazy.
Comment by Bruce — March 2, 2011 @ 9:11 am
Hi Bruce, you’re exactly right……but some sanity has returned to the GQC market with the nice reversal from the knee-jerk selling this morning…….my hunch is we’re going to see drill results very soon from Escandalosa, perhaps Friday or Monday, in time for PDAC but that’s just a guess on my part…….IMHO it’s just a matter of time before GQC hits the centre of the mineralizing system at Escandalosa…….we could see that in the first few holes, who knows…..study the map and the results to date……this is a very nice gold system GQC is drilling into and it may stretch out for a considerable distance…..crazy for anyone to sell this stock at 36 cents given what’s developing here….
Comment by Jon - BMR — March 2, 2011 @ 11:41 am