Perth, Jan 29, 2009 AEST (ABN Newswire) - Conquest Mining Limited (ASX:CQT)(PINK:CQMLF) is a Perth-based mining exploration company with two clear objectives. To bring the Mt Carlton Project into production, and to continue discovering low cost gold and silver resources.
Exploration at Mt Carlton has delivered resources at a cost of A$6 per ounce of gold equivalent compared with an Australian average of A$60 to A$70 per ounce for grass-roots exploration.
Conquest Mining has A$27.8 million cash reserves, and has a cash backing of 9.8 cents per share.
Review of Operations
Exploration and resource definition drilling completed 5,945m during the December 2008 Quarter.
Exploration by Gold Fields on the Regional Joint Venture ground has resulted in completion of a further 4,598m of RC & diamond drilling. This drilling has tested a number of prospects targeting favourable geological horizons and geophysical and/or geochemical anomalies. Gold Fields anticipates work for the March 2009 quarter to include geological mapping (weather permitting) plus drilling & data reviews of 2008 fieldwork. Drilling is planned to re-commence in the June 2009 quarter.
Diamond Holes
During the quarter, 21 holes for 2,544.0m of HQ core were completed, with a total of 9,463.9m completed for the calendar year.
Five holes (HC08RCD478-480 & HC08RCD484-485) were completed on the centre of the V2 Hill bonanza zone and intersected high grade gold. These 25m spaced infilling drill holes were completed to show lode continuity, and assist with ongoing QA/QC and metallurgical studies.
Impressive results were received from hole HC08RCD484 with 19m at 25.4 g/t gold, and hole HC08RCD485 with 27m at 4.62 g/t gold.
Two holes (HC08RCD452-453) have intersected high grade silver during resource definition drilling at 25m spacing at Area 39. These holes are located 150m west of the original high grade hole 39, and substantially improve confidence in the extent of the high grade resource. Higher grades were received from HC08RCD453 which intersected a wide 43m zone of disseminated replacement style silver mineralisation that included a central core of 5m at 3,324 g/t silver and 0.71% copper.
Exploration diamond drilling (HC08RCD412) continued on the west side of Herbert Creek, approximately 500m west of the discovery drill hole at Area 39. This drilling intersected variably silicified & altered volcanics similar to host lithologies at the Silver Hill Deposit. Although there were no significant results from this drill hole, similar geology indicates the potential to locate significant mineralisation in the area between the Silver Hill & Mt Carlton deposits.
Reverse Circulation Holes
During the quarter 29 RC holes and pre-collars were completed for 3,401m, with a total of 13,137m completed for the calendar year.
Drill holes (HC08RC470-471 & HC08RC486-495) were completed as infill drilling on the southern, western and eastern margins of the Silver Hill Deposit providing greater confidence in the extent of mineralisation. Results were mixed but included HC08RC471 with 15m at 29.5 g/t gold including 2m at 196 g/t gold and HC08RC488 with 19m at 510 g/t silver including 1m at 5,040 g/t silver and 15.2% copper.
Drill holes (HC08RC496-503) were completed to the north and north-east of the Silver Hill Deposit exploring for additional mineralisation. There were no significant results although several did not reach target depth due to drilling conditions. These may be extended by diamond drilling during 2009.
Drill holes (HC08RC474-477 & HC08RC481-483) twinned previously drilled diamond drill holes to assist with QA/QC & metallurgical studies. Assay results from these reverse circulation twins showed good comparison with the original diamond drill holes. Best results were from HC08RC482 with 19m at 4.35 g/t gold and HC08RC476 with 23m at 3.68g/t gold.
Future Work Programmes
Drilling at the Mt Carlton Project is expected to recommence following the end of the wet season. During this time Conquest is assessing and prioritising drill targets - anticipated to include geotechnical drilling and some additional infill drilling commencing in April 2009.
Metallurgical Testwork
Flotation Variablity Testwork
A program of flotation testwork at HRL laboratories in Brisbane is due to commence to examine flotation variability. Sixty samples will be taken from about 20 holes spread throughout the deposit, and will use half HQ core that has been kept in cold nitrogen storage. The objective of this work is to confirm the excellent recoveries achieved from composite samples used in the initial flotation testwork.
Bacterial Column Leach Testwork
Bacterial Column Leach Testwork is in progress using cultures that were adapted in the previous batch tests reported in the previous quarter. Tests are normally conducted over a period of approximately 90 to 120 days, and are expected to be completed in the March 2009 quarter.
Pre-Feasibility Study
Following on from the direction announced in the September 2008 quarterly report, the Company embarked on a pre-feasibility study on the Mt Carlton project. This significant step represents a natural advance on the scoping study completed in July 2008.
In doing this, Conquest is continuing its focus on delivering value to shareholders by seeking the optimum method to exploit the inherent value in the resource.
The pre-feasibility study is aimed at determining the likely technical and economic viability of the opportunity. Its principal focus is to optimise the resource, revenue, cash, profit and ultimately NPV.
As such, it explores all relevant options and analyses alternatives to build a legitimate, initial business case which may then be further advanced via a full feasibility study to the point the Company can justify going into production with a fully functioning mining and processing operation at Mt Carlton in North Queensland.
It is therefore pleasing to report, at this juncture, that the pre-feasibility work is progressing very well. Great strides have been made in the areas of resource modeling, mine optimization and the comparison of alternative processing methods. Additionally, as previously reported, there are some positive indications coming from detailed metallurgical work on the very complex and unique geology. In this respect the Company has been able to engineer a feasible range of product options, desirable to the market, and involving amongst others, the production and sale of a precious metals concentrate as well as the possibility of producing gold, silver and copper metal bars in situ at Mt Carlton.
In parallel with this, Conquest has completed a detailed market analysis which is showing that there is strong interest from a number of Chinese smelters and refineries that appear to be the most likely and amenable targets for an off-take agreement for a possible precious metals concentrate.
There is a range of other important but possibly less significant elements of work being undertaken in support of this study and the Company is following a deliberate plan and schedule to ensure timely completion of all necessary aspects. The study will be concluded with the delivery of a comprehensive report by the end of the March 2009 quarter which will present a business case with supporting appendices that includes a recommendation to proceed or otherwise.
Gold Fields Exploration Programs
During the quarter, Gold Fields has conducted extensive data gathering programs including geological mapping, soil & rock sampling, geophysical & drilling programmes on numerous prospects & targets within the Regional Joint Venture tenements.
Silver Hill Deposit
Ten drill holes were completed at the Silver Hill deposit during the quarter (511m RC and 1332m diamond drilling). This drilling was completed to allow the Joint Venture Partner to work on and test their geological models and associated mineralized structures styles/orientations. This work will assist Gold Fields apply concepts and knowledge from the Silver Hill deposit to prospects within the Regional Joint Venture area.
This drilling is all infill within the Silver Hill deposit with all data to be included within the Conquest database. No assay results have been received to date from this drilling.
Capsize Prospect
At the Capsize prospect, located east of Silver Hill, results were received for the final two drill holes (MCR019D & MCR020D). These holes targeted interpreted strike extensions of the Silver Hill mineralization based on Induced Polarisation (IP) geophysics surveys.
MCR019D 2m at 7 g/t silver from 278m.
MCR020D 4m at 10 g/t silver from 143m.
While this mineralization is of low grade, results indicate that the Capsize prospect is a distal continuation of the Silver Hill mineralisation.
Mt Carlton North
At Mt Carlton North, two drill holes (MCR022 & MCR023D) were completed targeting a helicopter electromagnetic (Heli-EM) anomaly. Drill hole MCR023D did intersect significant clay alteration co-incident with anomalous lead assay results. Anomalous lead also occurs in the upper parts of the Silver Hill deposit - a significant analogy suggesting additional drilling is required at this prospect.
S33 Prospect
A geochemical review of all soil data collected identified an area with elevated results on trend 1.5km northwest of the Silver Hill & Herbert Creek East deposits - which was subsequently named the S33 prospect. This prospect also has co-incident Heli-EM, IP and surface rock sample anomalies. This target was tested with two drill holes which intersected local mineralization within altered volcanics.
S33R002 2m at 0.2 g/t gold, 0.4 g/t silver & 0.08% copper from 34m.
S33R003 2m at 2 g/t silver from 32m.
Boundary Prospect
A number of drill holes completed at the Boundary & Boundary North prospects tested a series of parallel breccia zones & vein systems with locally anomalous gold & silver rock sample geochemistry. Altered silica healed breccias were observed in several drill holes with results as follows:
BNRC001 24m at 0.2 g/t gold & 1 g/t silver from 6m.
BNRC002 10m at 0.5 g/t gold & 4 g/t silver from 42m.
BNRC003 10m at 3 g/t silver from 170m.
BDR001 2m at 0.9 g/t gold & 17 g/t silver from 108m.
BDR002 12m at 0.5 g/t gold & 2 g/t silver from 22m.
Ortiz Prospect
Additional IP lines were surveyed at Ortiz following identification of a circular feature from the (geophysical) gravity surveys. Four RC drill holes targeted a Heli-EM conductive high linking geochemical anomalies with best results received from OTRC002.
OTRC002 2m at 0.7 g/t gold & 67 g/t silver from 102m; 2m at 1.5 g/t gold from 138m.
Strathmore Prospect
Additional IP lines were surveyed at Strathmore identifying an anomaly similar to the pyritic layer observed at the Silver Hill deposit; strongly clay altered rocks are also at surface. Five RC drill holes were completed for 800m with strong alteration identified in all drill holes. Anomalous results were returned from drill holes STRC004 & STRC005.
STRC004 32m at 0.25% copper from 24m (includes 6m at 8 g/t silver from 20m).
STRC005 2m at 0.37 g/t gold from 60m.
Soil Surveys
The Oaky Creek prospect (around 20km southeast of the Silver Hill deposit) was the main focus of 200 x 200 metre soil sampling. A peak value of 169 ppb gold on a 1.5km long "gold in soils" feature which is co-incident with a Heli-EM anomaly indicates another target requiring drill testing.
Work programmes for the following quarter:
Fieldwork programmes are minimal for this quarter due to the wet season. If possible, geological mapping and rock sampling/prospecting will be undertaken. Other work is planned to include target generation from a review of geophysical, geochemical and geological data.
Gold Fields completed the first year expenditure commitment of A$5 million by the end of October 2008.
Contact
John Terpu
Managing Director
TEL: +61-8-9240-4111
FAX: +61-8-9240-4054
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