North of 60 Mining News - The mining newspaper for Alaska and Canada's North

SQI: TSX-V

President and CEO: Randy Turner, P.Geo

CFO: Christopher Mitchell, P.Eng.

Vice President, Exploration: David Pawliuk, P.Geo

Silver Quest Resources Ltd. is focused on exploring for silver and gold on its numerous property holdings, ranging from early stage grassroots to advanced stage resource delineation and expansion projects scattered across central British Columbia and Yukon Territory.

In late March, Silver Quest and Richfield Ventures Corp. executed a joint venture agreement in which the junior has a 25 percent interest in the Davidson property on the Blackwater Gold Project in central British Columbia.

The companies approved a 20,000-meter drilling program and a 2011 exploration budget of C$8.6 million (C$1.8 million for Silver Quest).

On June 1, New Gold Inc. acquired Richfield and became majority owner and operator of the Blackwater project.

Silver Quest and New Gold since have reported encouraging drilling results and a number of environmental and engineering studies underway in 2011.

Further, New Gold Oct. 17 said it will acquire Silver Quest in a multifaceted deal that values the smaller company's shares at C$1.32 each, or more than C$156 million.

The transaction also included the formation of a new company, McIntyre Minerals Inc., which will focus primarily on Silver Quest's Yukon properties.

A recent resource estimate for the Blackwater Project pegs Silver Quest's portion (25 percent) of the Davidson property resource, at an average grade of 0.92 grams per metric ton gold, as 83,000 metric tons for 2,500 ounces in the indicated category and 11.57 million metric tons for 340,000 ounces in the inferred category. The company anticipated incurring total 2011 expenditures of about C$4.1 million and C$7 million on its B.C. and Yukon properties, respectively. Initially, progress was slow due to heavy snow packs and unseasonably cool, wet weather, but conditions improved and the company reported good progress on various projects at midsummer.

At the Capoose polymetallic project located on the Nechako Plateau about 185 kilometers (115 miles) by road west southwest of Prince George, B.C., Silver Quest planned a program of soil sampling to better define a significant 1.2-kilometer-by-0.5-kilometer (0.74-mile-by-0.31-mile) gold in soil anomaly discovered in 2010 geochemical soil sampling.

Geochemical rock sampling and prospecting also were planned for the 2011 field season with the objective of developing a diamond drill target within the anomaly area.

Silver Quest also reported completion in January of initial metallurgical studies on a composite sample of mineralized material from four diamond drill holes within the Capoose deposit with encouraging results.

Geochemical rock sampling and prospecting at Capoose was planned for the 2011 field season, with the objective of developing a diamond drill target within the anomaly area.

By August, Silver Quest had completed an airborne (helicopter) geophysical survey covering 3,350 line kilometers and a Titan 24 induced -polarization survey.

Reconnaissance geochemical till sampling was carried out and diamond drilling was in progress Aug. 30 at the project to complete a planned 6,000-meter program.

In Yukon Territory, Silver Quest is exploring the Boulevard Property located about 35 kilometers (22 miles) south of Kinross Gold Corp.'s Golden Saddle discovery and contiguous to Kaminak Gold Corp.'s Coffee Project in the White Gold district to west-central Yukon.

The Boulevard claims plus recent additional staking brings the property to 771 mining claims covering about 15,700 hectares (38,795 acres).

Gold mineralization at Boulevard is associated with quartz carbonate veins in chlorite biotite schist.

With soil sampling in 2010, the company identified the Boulevard Trend, a 20-kilometer (12.4 miles) long trend comprised of numerous gold, arsenic, antimony and molybdenum in soil geochemical anomalies.

Silver Quest commenced geochemical soil sampling at Boulevard in June, and had collected at least 5,000 soil samples by September.

The company also completed detailed geological mapping, surficial terrain mapping and airborne magnetic and radiometric surveys on the project.

A 6,000-meter drill program was underway in September to test targets generated by 2011 field work.

All soil samples were analyzed on site using a portable X-Ray Fluorescence device.

The company reported plans to continue exploration of its Dawson Range properties, a package of 11 claim blocks that together contain 238 quartz mining claims that it purchased in December 2009. Planned summer 2011 exploration on the

Dawson Range properties included further geochemical sampling, prospecting and geological mapping. Follow-up trenching, directed towards defining diamond drill targets, also was planned on selected properties, including the recently acquired Rude Creek and Poker Gold properties.

Silver Quest also targeted the Bouvette and WIT claims in east-central Yukon.

The Bouvette block contains 100 mining claims located about 55 kilometers (34 miles) northeast of Keno City that adjoin the Rau Gold Project of ATAC Resources Ltd., where drilling intersected 8.91 g/t gold across 32.64 meters in 2010.

Government surveys indicate that Bouvette has geological characteristics similar to the Rau Project's Tiger Zone area.

The WIT block, which Silver Quest optioned in March, contains 304 mining claims.

Located about 30 kilometers north of Keno City, WIT covers prospective volcanic rock units, and sediments collected from streams draining the property area contain anomalous concentrations of gold, silver, tungsten, copper and zinc.

Planned summer 2011 exploration on these Keno-area properties included geochemical sampling, prospecting and geological mapping, directed towards defining diamond drill targets.

Silver Quest also reported encouraging exploration results on its gold prospective Prospector Mountain Property located 90 kilometers (56 miles) northeast of Carmacks, where it has an option agreement with Tarsis Resources Ltd. Prospector Mountain is comprised of 271 contiguous mineral claims covering about 5,500 hectares (13,591 acres).

Rock sampling commenced in early June, with about 800 samples collected.

Detailed geological mapping, and airborne magnetic and radiometric surveys and a diamond drilling program of 1,588 meters (12 holes) were completed between mid-July and mid-August.

The drill program was designed to test targets generated from 2010 assay results, and from an evaluation of the 2011 airborne geophysical survey data.

Silver Quest collected about 3,750 geochemical soil samples from its 12 White Gold District properties in a regional exploration program. Airborne magnetic and radiometric surveying also was performed at the Rude Creek, Poker and Henderson properties. Moreover, the company said it succeeded in removing several economic impediments to further exploration of its Tsacha property, which will allow for significant exploration during the 2011 field season of the 3Ts property located about 120 kilometers (75 miles) southwest of Vanderhoof, B.C. By Aug. 30, a total of 1,645 meters of diamond drilling had been completed at 3Ts in 10 holes with assay results pending.

Cash and short-term deposits: C$8.68 million (Feb. 28, 2011)

Working capital: C$5.95 million (May 31, 2011; raised C$12.32 million in gross financings in July)

Market capitalization: C$107.58 million (Sept. 9, 2011)

P.O. Box 11584, 650 West Georgia St., Suite 1410

Vancouver, B.C., Canada V6B4N8

PH: 604-687-3959 • Fax: 604-687-1448

http://www.silverquest.ca