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Options of Arizona Base Metals Properties |
Q-Gold Options Arizona Base Metals Properties
SEC 12g 3-2(b) Exemption # 82-4931
Fort Frances, Ontario, May 27, 2008
Q-Gold Resources Ltd. (TSX VENTURE:QAU)(FRANKFURT:QX9) announced today that in an "arm's length" transaction with private parties, it has obtained an option to conduct due diligence on three Arizona base metals properties. All three are governed by the U.S. General Mining Act of 1872, amended.
The properties are described as follows:
RAY PROSPECT
Located in the Mineral Creek Mining District (Globe/ Miami area of Southeastern Arizona) of Pinal County, which hosts a string of large copper porphyry deposits extending from Superior to Hayden, Arizona, the optioned property consists of six Federal patents comprising 103 acres on the western slopes of 6,000 foot Scott Mountain in the Dripping Springs Range along the eastern edge of the Ray Ore Body. The Ray copper porphyry deposit has been mined since the 1890’s and by mass mining (open pit) methods by Asarco since 1948. It is currently being mined at a rate of 250,000 tons per day or ore, and produced 232.9 million pounds of copper in 2006 (most recently reported annual production), making it Arizona’s second largest producing copper mine.
As the optioned patents were held by private ranching interests beginning in 1897 until acquired by the vendors, the ground, although prospective, has not been mined.
TROY PROSPECT
Also located in the Dripping Springs Mountain Range of the Mineral Creek Mining District (Gila County), the Troy prospect consists of eight Federal Patents comprising 148 contiguous acres located approximately 4 miles southeast of the Ray Mine. This property is also a copper porphyry prospect, which has only incurred small-miner, near-surface operations since its discovery in 1900. Based on surface sampling, geochemical and geophysical surveys, and the extensive presence of faulting, breccias and weathered copper sulfide minerals (gossans) on surface, the Troy deposit is a prime exploration target for an underlying copper and possibly copper/ molybdenum porphyry accumulation. Molybdenum is a byproduct in many of Arizona’s copper mines.
THE PINAFORE MINE
Located in Western Arizona near Bagdad in the Eureka Mining District of Yavapai County, this property consists of one Federal Patent and nine contiguous U.S. Department of the Interior, Bureau of Land Management Mining claims totaling 206 acres. The Pinafore Mine is a volcanogenic massive sulfide (VMS) polymetallic deposit containing copper and zinc located on the western fold of a limb on the Bagdad open pit copper and molybdenum mine, Arizona’s third largest producing copper mine. During World War II, about 5,000 tons were mined from a 245 foot shaft and several hundred feet of drifts. Drilling in 1992 by Arizona Exploration Inc. (American Barrick, Placer Dome and Homestake) delineated two promising VMS deposits at depth (800 feet) in the Pinafore. A restricted land position at the time precluded their further interest. A subsequent geophysical survey indicated the presence of a synclinal trend to the southwest which may host additional VMS prospects on ground included in Q-Gold’s option.
Pursuant the terms of its agreement with the vendors, Q-Gold’s due diligence option can be converted into a Purchase Option Agreement, on or before September 1, 2008, to acquire a 100% interest in the properties under the following terms:
- Option Term: 5 years
- Upon Execution: US$ 66,000 cash payment
- Semi-Annual Payments: US$ 25,000 cash
- To Purchase 100% Interest: US$ 1,500,000 Cash plus issuance of Q-Gold common shares equal to US$ 1,500,000 in value.
The Purchase Option Agreement is subject to the approval of the TSX Venture Exchange.
Arizona Copper Production
Arizona leads the U.S. in copper production and is in the top five U.S. producers of molybdenum and silver. The value of Arizona copper production in 2007 exceeded US$ 5.5 billion. The ten largest Arizona copper mines produced a total of 1.57 billion pounds of copper in 2006, including the #2 producer, the Ray Mine (Asarco) with 232.9 million pounds and the #3 producer, the Bagdad Mine (Freeport McMoran) with 165.4 million pounds of copper. (Source: “Arizona’s Metallic Resources Trends and Opportunities – 2008” Arizona Department of Mines and Mineral Resources, Open File Report 08-26, February 2008, p. 1, Author: Nyal J. Niemuth)
President’s Remarks
President and CEO, Bruce Carruthers said, “Q-Gold is indeed fortunate to be able to obtain options, on a very reasonable basis, on two un-mined tracts which are prospective for copper and molybdenum in the heart of Arizona’s southeastern porphyry copper belt. These have been in private hands since the late 1800’s. The other optioned property, the Pinafore Mine, in the Western Arizona VMS belt, presents an already drill-identified, polymetallic deposit that has expansion potential onto lands also included in the option package.
Labor and political disruptions to Asian and South American copper supplies, rising Asian demands and depleting warehouse stocks of copper provide a positive outlook for Arizona copper production and prices in the next few years. Our due diligence efforts on the new properties are currently in progress,” Mr. Carruthers concluded.
Richard C. Beard, P.Eng., Consulting Geologist, a Qualified Person as defined by NI 43-101, has reviewed and approved the above technical disclosure.
MINE CENTRE, ONTARIO UPDATE
At Mine Centre, Q-Gold is in the process of acquiring the necessary permits to dewater the Foley Gold Mine. The Company has received copies from its environmental engineering consultants, Trow Associates Inc. (“Trow”), of applications for both a Permit to Take Water and a Sewage Works Certificate of Approval, required by the Ontario Ministry of Environment. The applications include Trow’s results from mine water toxicity tests, a hydrogeological report, drilling and monitoring of test water wells, a topographic survey of the Foley minesite and preparation of preliminary engineering designs of two-stage settling ponds followed by a polishing pond to insure the water’s purity.
Upon receipt of the permits, Q-Gold will construct the ponds and resume rehabilitation and dewatering of the Foley Mine north shaft to the 400 foot level. This will permit access and advanced gold exploration activities in the mine.
About Q-Gold Resources Ltd.
Q-Gold is a Canadian-based mineral exploration company currently exploring for precious and base metals and platinum group elements on its extensive Ontario holdings in the historic Gold Camp at Mine Centre of 32,585 acres, including 5 historic gold mines, 7,634 exploratory acres in the Rainy River Greenstone Belt and six historic gold and silver mines near Crown King, Arizona.
For all future Q-Gold investor relations needs, investors are asked to visit the Q-Gold IR Hub at http://www.agoracom.com/IR/Q-Gold where they can post questions and receive answers within the same day, or simply review questions and answers posted by other investors. Alternatively, investors are able to e-mail all questions and correspondence to QAU@agoracom.com where they can also request addition to the investor e-mail list to receive all future press releases and updates in real time.
The statements made in this Press Release may contain forward-looking statements that may involve a number of risks and uncertainties. Actual events or results could differ materially from the Company's expectations and projections. The TSX Venture Exchange has not reviewed this press release and neither approved nor disapproved the information contained in this press release.
CONTACT INFORMATION
Corporate Inquiries
Q-Gold Resources Ltd.
J. Bruce Carruthers II President
1-888-779-0166
Website: www.QGoldResources.com
Investor Relations
AGORACOM Investor Relations
http://www.agoracom.com/IR/Q-Gold
QAU@Agoracom.com
