VANCOUVER (miningweekly.com) – Exploration success by TSX-V-listed GoldQuest Mining at its flagship Romero project and key regional exploration targets along the Tireo land position, in the western Dominican Republic – likened to a “string of pearls” by executive chairperson Bill Fisher – has attracted the attention of senior Canadian gold miner Agnico Eagle Mines.

Agnico has recently made a C$22.9-million investment in GoldQuest, serving as a significant endorsement for the GoldQuest exploration team, Fisher tells Mining Weekly Online in an interview.

“We have reconstituted the former GlobeStar team, a team that has done it before in the Dominican Republic with the still-producing Cerro de Maimón mine. While we are making progress on several fronts regarding permitting the Romero project, and delivering exploration success in the surrounding Tireo land package, we are expecting accelerating news flow this year as we gather momentum,” Fisher states.

Agnico Eagle has recently acquired 38.1-million GoldQuest shares at C$0.60 apiece, giving it a 15% stake in issued and outstanding stock of the junior explorer.

“The approximately C$23-million investment by Agnico places us in a strong financial position to advance both our exploration programme and the development of our Romero project,” Fisher states, noting that the proceeds from the private placement will be mainly used for exploration and development at the company's Dominican portfolio and for general corporate and working capital purposes.

Agnico has adopted a policy of positioning itself in early stage opportunities in districts with long-term geological potential.

‘STRING OF PEARLS’
According to Fisher, it was GoldQuest’s early-January announcement that its ongoing 40-hole, 10 000 m 2016/17 drill programme on its 100% owned Tireo concessions had made a polymetallic discovery named Cachimbo, which returned high grades of gold and zinc on three horizons, that piqued Agnico’s interest.

This new discovery is located 20.5 km south of GoldQuest's multimillion-ounce Romero gold/copper project, which is currently in the permitting phase. Hole TIR-16-09 at Cachimbo returned a 4.9 m interval grading 14 g/t gold, 74 g/t silver, 12% zinc, 1% copper and 0.7% lead, within a wider horizon of 15 m grading 5 g/t gold, 31 g/t silver, 4% zinc, 0.4% copper and 0.3% lead from 70 m depth.

GoldQuest made the Cachimbo discovery while drilling the third of 20 targets on the Tireo concessions, attesting to the regional prospectiveness.

“The discovery of high-grade zinc is especially fortuitous since zinc prices have risen 75% during the last year. With this discovery on merely the third target of 20 such targets, we are optimistic as to the potential of the district, as VMS [volcanogenic massive sulphide] mineralisation often occurs in clusters. Along with the Romero project in full permitting mode, GoldQuest is well-funded and positioned to be one of the most active mineral exploration and development companies of 2017 as we explore the emerging Tireo Belt, which has the potential to become a mining district,” Fisher says.

The Tireo project consists of a 100%-owned, 50-km-long land position overlying the highly prospective Tireo Formation rocks, consisting of Upper Cretaceous volcanic sequences, and surrounding GoldQuest’s Romero project. Fisher explains that the targets were identified following one of the world’s largest helicopter borne Z-Axis Tipper electromagnetic and magnetic surveys ever conducted, over the entire Tireo project. The survey covered the discoveries at Romero and Romero South, as well as a previously identified mineralisation including La Guama, Jengibre and Loma Viejo Pedro.

Late last month, GoldQuest announced the discovery of two new gold systems in the Tireo Belt, called Vaca Valley and Mineros Ridge, which are located 5 km and 10 km north of the Cachimbo discovery, respectively. In both cases, gold-bearing sulphides were intersected with similar grades and thicknesses to intersections bordering the Romero deposit and the Cachimbo discovery, Fisher notes.

Highlights of the new drilling include hole TIR-17-16 at Mineros Ridge, which intersected 15 m grading 0.4 g/t gold and 25.4 g/t silver. Hole TIR-16-12 at Vaca Valley intersected 56.8 m grading 0.3 g/t gold.

Further, the team has encountered wide intersections of anomalous gold-in-pyrite on the edge of the Romero deposits and all of discoveries in the belt and may be indicative of proximity to higher-grade mineralisation, Fisher stresses. Results from hole TIR-17-16 show higher silver values and similar gold-to-silver ratios as intersected at the Cachimbo discovery.

"Finding new gold bearing hydrothermal systems is the objective of this first pass drilling programme. Subsequent follow-up drilling programmes will vector toward potentially higher-grade mineralisation of such systems. Finding sulphides coinciding with anomalous gold and other metals, we are optimistic as to the potential of the district as VMS mineralisation often occurs in clusters,” Fisher states.

Fisher explains that the 2016 exploration programme focuses on the southern half of the 50 km Tireo project. The focus area is on a window of favourable altered volcanic rocks within the Tireo Formation land package and is along trend of GoldQuest’s Romero gold/copper discovery 20 km north. This window trends towards and is directly next to Precipitate Gold’s Ginger Ridge discovery, which highlights the potential for the Tireo to host more gold deposits.  

GoldQuest has been using a systematic exploration programme, which includes mapping, surface sampling, and ground induced polarisation (IP), and will include 10 000 m of drilling. Since drilling on IP changeability high anomalies led to the discovery of the Romero deposit, it has been a key exploration tool in this region.

PROJECT PERMITTING
Meanwhile, GoldQuest is grinding through the permitting process for its Romero project, which it discovered by similar means in 2012.

A November prefeasibility study (PFS) calculated an after-tax net present value, at a 5% discount rate, of $203-million, and an internal rate of return of 28%. All-in sustaining costs came in at $595/oz of gold equivalent.

The PFS, completed by JDS Energy & Mining, envisions a planned 2 800 t/d underground mine focused on the high-grade gold and copper ‘core’ of the Romero deposit to produce a saleable copper concentrate for shipment to offshore refineries. Over half of Romero’s mineral resources are not included in the mine plan, as well as the entirety of Romero South. The unmined portion of the resources leaves significant room for potential expansion, Fisher states.

The project will cost about $251-million to build, including a $32-million contingency, which can be paid back in 2.5 years. The operation, on average, will produce 109 000 oz of gold equivalent over the 7.3-year mine life.

The Romero and Romero South deposits, located in the central part of GoldQuest’s Tireo property, are about 1 km apart.

The Romero deposits host a probable reserve of 7.03-million tonnes containing 840 000 oz of gold; 980 000 oz of silver, and 136-million pounds of copper, or 1.12-million gold-equivalent ounces. The indicated resource statement comprises 20.23-million tonnes grading 2.67 g/t gold, 0.61% copper, 0.3 % zinc, 4 g/t silver, for 1.74-million ounces of gold, or 2.27-million ounces of gold equivalent.

Fisher says the brownfield exploration potential in the Romero concession, both near and in between the two deposits, is substantial, and will be tested once a mining permit is obtained.

GoldQuest plans to complete a feasibility study on Romero by year-end, with mine permits expected in the third quarter. Construction has been pencilled in to start, on an optimistic time line, during the first quarter of 2018.