Aquest drilling Anabella

Armed with new geochemical data, junior Aquest Minerals (AQU-V) is ready to drill-test three gold-in-soil anomalies on the Anabella gold property in Guatemala.

Covering an area measuring 1 km by 175 metres, the Anabella East anomaly lies along strike of the Anabella mine workings and is defined by strong arsenic and antimony soil values, as well as elevated gold values. Grab samples collected over the area returned up to 67.9 grams gold per tonne. Channel samples yielded 5.45 grams gold over 14 metres.

To the southeast, the Mango-Tacana Ridge anomaly is defined by anomalous arsenic-in-soil values over an area measuring 1.5 km by 200 metres. Gold-in-soil values generally mirror the arsenic values, whereas antinomy-in-soil values are highly elevated over the Mango zone and weakly anomalous over the Tacana Ridge zone. Float samples collected over the Mango zone returned up to 3.2 grams gold. Chip samples returned up to 1.1 grams gold over 4.5 metres at the Tacana Ridge adit.

The La Florida-Lirios anomaly, west of the LC mine, is defined by moderately strong antimony values, weak-to-elevated gold values and moderate arsenic values over a 600-by-225-metre area.

Last year, Aquest evaluated the property with underground sampling and 19 surface holes. The company determined a possible resource of about 4.5 million tonnes grading 2.6 grams gold gold and 0.5% antimony per tonne at the Anabella mine and 1.75 million tonnes grading 5.4 grams gold and 2.3% antimony at the LC mine.

The property, which Aquest acquired this year from a privately held Guatemalan company, includes a 5-km-long trend of gold-antimony mineralization, plus a mine, mill and smelter.

The acquisition price was US$4 million in cash and US$6 million in Aquest convertible debentures. The agreement also called for prepaid royalties of 5% of the recoverable metal value for the first 1 million tonnes of ore and 3% for the remaining reserve. Total payments are capped at US$25 million.

Originally, the deal was subject to a 9-month due diligence period; however, based on the evaluation, Aquest decided to extend this period to April 2002. Under the terms of the extension, Aquest paid the vendors US$100,000 in the fourth quarter of 1999, plus an additional US$10,000 per month starting in February and continuing through the option period.

In December 1999, South Africa-based Gold Fields (GOLD-Q) agreed to buy 2.1 million units of Aquest at 35 each through a private placement. Each unit consisted of one share and half a warrant exercisable at 50 over the next 12 months. In return, during the warrant period, Gold Fields would have the right to match any joint venture offer or participate in any other financing proposal offered to Aquest involving the Anabella property.

Drilling will resume later this month.