TORONTO, ONTARIO--(Marketwire - Sept. 14, 2011) - Northquest Ltd. (TSX VENTURE:NQ) ("Northquest" or the "Company") has acquired, through an option agreement dated as of September 15, 2011 (the "Option Agreement"), an option (the "Option") to earn a 100% interest, subject to a 2% net smelter return royalty ("NSR"), in the property known as the Debela project located in Southern Mali. The property was acquired from an arm's length party.
Under the terms of the Option Agreement, the Company can exercise the Option by (i) issuing 25,000 common shares and making a cash payment of US$25,000 upon signing the Option Agreement, which share issuance and cash payment are mandatory; and (ii) making additional cash payments of US$35,000, US$50,000 and US$90,000 on the first, second and third anniversaries of the Option Agreement, respectively. The optionor shall retain a 2% NSR interest in the Debela project, one-half of which may be purchased by the Company at any time for US$2,000,000, and the remaining one-half of which may be purchased at any time by the Company for US$5,000,000. In addition, in the event that the Company exercises the Option, prior to the commencement of commercial production on the Debela project, the optionor shall be entitled to receive annual pre-production payments of US$25,000 until the commencement of commercial production (which payments shall be credited against any NSR payable by Northquest in the event of commencement of commercial production on the Property).
The Debela gold project is a 113 square kilometer exploration permit located in the prolific Massigui Greenstone Belt of southern Mali. The permit is 250 kilometers south of Bamako and 100 kilometers southwest of the 7.5 million ounce Morila gold mine. The Debela property is at the intersection of conjugate northeast and northwest-trending faults and is coincident with several gold in soil anomalies identified in the 1980's vintage UNDP regional geochemical survey. The Company intends to complete a detailed geochemical survey over the entire property on a nominal 400 metre by 200 metre grid as soon as possible. Contingent upon the results of that work, additional sampling will be carried out in order to define targets for drilling in 2012. With the addition of the Debela project, Northquest has five gold exploration projects in Mali and a total of 770 square kilometres of mineral rights. The Company also has 1,100 square kilometres of mineral rights at the Pistol Bay gold project in Nunavut, Canada, where a diamond drilling program is currently underway.
The Option Agreement remains subject to the approval of the TSX Venture Exchange.
All technical information disclosed in this press release has been prepared under the supervision of, and verified by, Jon North. Dr. North is the President and Chief Executive Officer of Northquest and a "qualified person" within the meaning of National Instrument 43-101 of the Canadian Securities Administrators.
Northquest is a mineral exploration company focused on the acquisition, exploration and development of properties for the mining of gold and other minerals. Northquest has 25,780,823 shares outstanding (38,710,034 on a fully diluted basis). For further information please visit www.northquest.biz.
Certain information set forth in this news release may contain forward-looking statements that involve substantial known and unknown risks and uncertainties. These forward-looking statements are subject to numerous risks and uncertainties, certain of which are beyond the control of Northquest, including, but not limited to, the impact of general economic conditions, industry conditions, volatility of financial markets and commodity prices, risks associated with the uncertainty of exploration results and estimates and that the resource potential will be achieved on exploration projects, currency fluctuations, dependence upon regulatory approvals, and the uncertainty of obtaining additional financing and exploration risk. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements.
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