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Great Quest Minerals Ltd.
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Traded: (TSX –GQ)
Recommended 10/19/02 - $0.16
Price 12/31/02: $0.22
Shares Outstanding: 10,797,564
Fully Diluted: 12,690,061
This company began laying the
groundwork for better times in the gold industry back in 1997,when
gold properties could be had virtually for the asking. Management
anticipated a tough time in gold mining over the next few
years, so they embarked on a strategy of acquiring low cost
properties and carrying out grass roots exploration work to
prepare for better times. It appears better times have arrived,
and now this tiny, tiny micro-cap gold exploration stock looks
like it could richly reward investors who recognize this company’s
exploration potential.
In seeking a favorable environment
in which to work, GQ selected Mali, in west Africa because
of that country’s democratic government and because they felt
the country was under explored for gold. To assist the company
in Mali, they hired a native geologist named Mamadou Keita
who sits on the Board and is also Vice President, Explorations.
Mr. Keita has extensive experience working in the gold fields
of Mali. With his help the company has acquired a number of
highly prospective properties. In total, the company holds
options on 14 concessions covering 405 sq. km. So far six
drill targets have been identified on two properties, those
being the Bourdala and the Baroya concessions located on the
map below.
We said from the start that
as the gold bull market gains some maturity, we will start
moving "down market" toward the "C" and
finally the "D" companies on our list. These are
the earlier exploration companies that face extremely high
insolvency risks in a gold bear market. But as raising money
for exploration is easier in a bull market and as these companies
begin to fund exploration and report good results, their shares
are likely to outperform the majors.
We believe Great Quest is a
junior exploration company that holds a high probability of
exploration success given early exploration results, its location
in the midst of gold production by native miners (orpaillage)
and the existence of some five gold deposits outlined near
the Baroya, Bourdala and Kenieba Concessions. Moreover,
666,995 ounces of gold were produced at a cash cost of $146
per ounce at the Sadiola Mine, located in this area. Following
is a brief discussion of some of the various concessions pictured
on the map above.
The Baroya Concession
– This 9 sq. km concession is west of and adjacent to the
concession covering Nevsun’s (Toronto-NSU) Segala deposit.
A second Nevsun gold deposit, the Tabakoto deposit is 3 kilometers
to the southwest.
Recently, Nevsun acquired an
80% interest in the Segala deposit adjacent to the Baroya
concession, as well as the area between the Baroya and the
Kenieba concession. In September Nevsun announced the results
of a geological and mining review on the Tabakoto deposit
for inclusion in a final feasibility study.
Three mineralized zones have
been defined so far on the Baroya concession. They include
the Baroya Nord, the Baroya Central and the Segala Extension.
A large number of potentially commercial grade assays have
been taken from these surface cuts, ranging from a low of
0.034 oz./ton over 2.5 meters to a high of 5.27 oz./ton from
two veins samples in one pit. On surface, the Baroya Nord
zone measures 90 meters by 450 meters, the Baroya Central
zone has been traced for a length of 800 meters and the Segala
Extension is 260 meters in length. Suffice it to say that
given these surface gold assays, these three zones are begging
to be drilled.
The Bourdala Area – These
concessions cover an 86 sq. km area and is comprised of two
concessions. Five various areas within this larger Bourdala
area have been mined by natives in the past. Three lines of
pits have been dug across the zone with values up to 2.65
oz. gold per ton being reported in Pit 14B. Five samples from
Pit 14A averaged 0.48 oz. gold/ton.
In the BL concession, two northwesterly
zones of gold mineralization have been identified. Assays
for gold on 7 samples from 4 pits over 125 meters in length
averaged 0.11 oz. gold/ton with values as high as 0.40 oz.
gold/ton. More recently, in a 10-to-15 meter wide zone to
the southeast two 1.5 meter wide test samples assayed 0.01
oz. gold/ton and 2.1 oz. gold per ton respectively. Other
highly prospective areas for drilling have also been established
on the basis of surface geological work on this property.
On December 3rd,
management reported some very good drill results from its
first 3 holes drilled in the TD area. Hole 01TD intersected
a 1.5 wide structure that graded 0.093 oz./ton); Hole 02TD
intersected various gold bearing intersections including:
a) 5.5 meters grading 0.093 oz. gold/ton and b) another intersection
that scored 0.136 oz. gold/ton. Hole 03TD contained: a) A
two meter interval grading 0.068 oz. gold/ton and b) a 4.3
meter section that graded 0.138 oz./ton.
Hole, O4NS was drilled in the
Nanike Sodijigui area, 4.5 km to the east-southeast of the
TD area. This hole graded 0.07 oz./ton gold over a 5.6 meter
width. More assays results are expected to be reported in
the near future.
The objective of this 923 meter
diamond drill program is to identify a significant zone or
zones of gold mineralization that can be defined in future
programs. Management expects a total of five and possibly
six targets to be identified from this early drill program.
Given the size of the mineral bearing zones and good assays
to date, the Bourdala looks very promising.
The Kenieba Concession –
Surface geological work is moving forward on this 32 sq.
km concession, located 5.5 km southwest of Nevsun’s Tabakoto
deposit. An area of orpaillage extends for 7 km within the
concession. Two dykes, the Zambaye 1 and 2, occur within the
area of orpaillage with associated quartz veining and gold
mineralization. Anomalous gold values were discovered on nine-selected
grab samples taken from various locations along the two dykes.
Although exploration on this concession is at an early stage,
investors the presence of native miners combined with some
anomalous gold surface samples lead us to expect some very
positive results could be forthcoming from this project in
the months ahead.
Baoule River / Winza Concessions
- The company has an option on the 207 sq. km. Baoulé
River Concession and the 78 sq. km. Winza Concession for a
total of 285 sq. km. in the Filimana area in southwestern
Mali. An extensive soil sampling program was completed
in the winter of 2000 on the Winza concession. This program
defined 6 zones, up to 2 kilometres long, anomalous in gold.
The samples were taken in mainly eluvium or material in place.
Soil sampling was also completed
over a grid in the northern part of the Baoulé river
concession. Although areas anomalous in gold were defined,
the samples were taken mainly in alluvial or transported material.
The source of the alluvium is the southern part of the Baoulé
River concession and the Winza concession.
The company is currently looking
for a joint venture partner on the project. Work will take
place either when a joint-venture partner is found or when
money is raised for this project.
The Taseko Property
– This property is located 225 km north of Vancouver BC. It
covers the Empress area where a mineral resource of 11 million
tons of 0.61% copper and 0.023 oz./ton gold has been defined.
This occurs in highly altered volcanic rock above a
granitic intrusive.
A geologically similar mineral
occurrence is found in the East zone, 1,200 metres east of
the Empress area. Only three holes have been drilled here.
The Buzzer zone occurs 3,200 meters east of the Empress area.
The Buzzer consists of disseminated copper and molybdenum
(with gold credits) in altered granitic rock. Old reports
indicate there is a mineral reserve of 5.5 million tons of
0.35% copper, 0.031% molybdenum with gold here. The Buzzer
West zone occurs west southwest of the Buzzer zone. The rock
and mineralization here are similar to that at the Buzzer
zone.
A series of copper soil anomalies
extend 2,400 meters west southwest from the Buzzer zone. Rock
similar to that found at the Buzzer zone has been found within
the anomaly, 2,400 metres from the Buzzer zone.
With the company having so many
exciting targets in Africa, the Taseko property has been placed
on the back burner. Still assuming gold prices continue their
rise, this too could become a valuable asset, which management
might well farm out to another exploration company.
Management
Willis W. Osborne (President
and Director), received his B.Sc. in Geology from the
University of Minnesota in 1961 and his M.Sc. in Geology from
the University of British Columbia in 1966. Since beginning
a career as an exploration geologist for Noranda Exploration,
he has been active in precious and base metal exploration
for over 25 years and has served on the board of several junior
exploration companies. He also was involved in the discovery
of the gold – copper Empress zone on the Taseko Property.
Mahamadou Keita (Vice President
of Exploration and Director), received his Ingenieur Degree
(Geology) from National School of Ingenieurs (Mali) in 1969
and M.Sc. (Minera) from Mining Institute of Petersburg (Russia)
in 1978. From 1978 to 1983 he was a Chief Geologist for the
Bureau de Recherches Geologiques et Minieres, an agency of
the French Government doing diamond exploration in Mali, and
from 1985 to 1991, the Chief Geologist of the Kenieba Region
for the Direction Nationale de la Geologie et des Mines of
the Malian Ministere des Mines. He also worked as a geologist
in Russia and New Mexico.
Victor J.E. Jones (Director),
received his B.Sc. from McGill University in 1971 and returned
to obtain his MBA there in 1975. He is also a director of
Moydow Mines International Inc., a publicly listed (TSX) exploration
company. He is currently President and Executive Director
of the B.C. Advanced Systems Institute.
Assay Update:
As we were getting ready for
our trip to the Cambridge House conference in Vancouver, we
learned of some very positive diamond drill results from hole
06 and hole 07 from the company’s Bourdala concession in Mali.
Hole 06 scored 24 meters of 0.065 oz./ton gold. Within this
intersection were 10 meters of 0.126. oz./ton and several
higher grade sections including 0.26 oz gold/ton over 2 meters.
A further to 5 meters assayed 0.277 oz./ton, which included
a 2 meter section that scored 0.53 oz. per ton. Hole 07 produced
an 8.9 meter intersection that graded 0.037 oz./ton gold.
These are some very promising
results for this company’s early exploration effort. The company’s
2002 exploration efforts appear successful. The objective
of the 2002 program was to test five separate zones of orpaillage
through the drilling of seven holes in 4 separate areas. The
Company reported that significant gold mineralization was
intersected in five of these holes representing four, and
possibly five, separate zones. At least one significant intersection
of gold was encountered in each of the four areas. The next
program will be concentrated on further defining the known
zones as well as testing new zones such as the Sabakonkon
and the areas of orpaillage in the Niaragui and Soumala concessions
Summary & Conclusion
Assuming the gold bull market
remains on its path, we expect to continue focusing more on
our "C" and "D" defined companies because
these micro caps are likely to make the biggest moves percentage
wise in a long gold bull market. Great Quest has a handful
of very prospective gold targets in one of the more politically
desirable and stable countries in Africa. We believe the prospects
are very good for a stream of positive drill results over
the next years which could drive this company’s shares to
much higher levels. With the caveat that you not allocate
more than 5% of your entire investment portfolio to this or
any other stock on our list, we recommend this stock for speculative
gold share investors who share our view that we are in the
early stages of a secular bull market in gold. For additional
information on this company, visit its call (604) 689-2882
or visit the company web site at www.greatquest.com.
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J Taylor’s Gold & Technology
Stocks, (formerly J Taylor’s Gold & Gold Stocks) is
published monthly as a copyright publication of Taylor
Hard Money Advisors, Inc. (THMA), Box 770871, Woodside,
N.Y. Tel.: (718) 457-1426. Website: www.miningstocks.com.
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