WATERDOWN, ONTARIO, Jun 2, 2008 (Marketwire via COMTEX) ----QGX Ltd. (TSX:QGX) is pleased to announce the confirmation of a large subsurface water resource capable of supporting both the industrial and drinking water required for the Company's proposed 10 million tonne per annum coking-thermal coal project at Baruun Naran in southern Mongolia.
In late 2006, QGX secured permission from the Mongolian government to search for water to supply its proposed coal development at Baruun Naran. The water resource, known as Balgasyn Ulaan Nuur, is located approximately 45 km south west of Baruun Naran and extends over an area of approximately 150 sq. kms. This area was initially studied in the mid 80's when some 51 water exploration holes were drilled.
During 2007 and 2008 QGX drilled 14 holes with average depth of 70 m. The holes were drilled and equipped by Major Drilling and the basin water pump tests were conducted by Australian water engineering company AZTEC during 2007 and early 2008. The reservoir resource and flow calculations were performed by Dr. R. Battumur, consultant for Shandny Bulag LLC (Ulaanbaatar), a water exploration company licensed by the Water Authority, Mongolia. This work confirms the earlier work with the calculated water resource capable of supplying 150 litres per second for the life of the planned mine.
On May 15, 2008, QGX received the General Environmental Impact Assessment Guidelines from the Ministry of Nature and Environment for conducting the environmental impact assessment ("EIA") for the Balgasyn Ulaan Nuur water resource. The EIA has commenced and the permitting process to develop the water resource is currently underway.
Paul Zweng, President/Chief Executive Officer of QGX Ltd., commented as follows:
"The Balgasyn Ulaan Nuur water resource satisfies 100% of the water requirements for our coal project at Baruun Naran. The quality of the water is very good, requiring little-to-no treatment prior to use at the mine. In addition, the development costs of the resource should be favorable because the water resource is shallow-the average depth of the water bores is only 70 m.
The key to the success of this water exploration program is the close cooperation that exists between QGX and the community in the Baruun Naran area. From the early stages of the project, the Company has established a consultative approach with the various stakeholders to ensure that the project was fully understood and accepted by all parties."
Mr. John Thompson, Vice President Operations of QGX Ltd. and a qualified person as defined by NI 43-101, has reviewed and approved the information contained in this release.
QGX is a Canadian-based company that has been exploring for mineral deposits in Mongolia since 1994. The Company's two most advanced properties are the Baruun Naran and the Golden Hills projects. In January 2008 QGX announced that an independent 43-101 pre-feasibility study for Baruun Naran showed a net present value (discounted at 10%) of US$499 million on an after-tax basis. QGX announced in August 2007 an independent NI 43-101 resource for coking and thermal coal at Baruun Naran comprised of 93.3 Mt of measured and 159.6 Mt of indicated (252.9 Mt contained in measured and indicated) and 11.1 Mt of inferred resources. In April 2007, QGX filed an independent NI 43-101 report outlining a positive preliminary economic assessment for its copper-gold-silver project at Golden Hills. Barrick Gold Corp. holds an approximate 9% equity interest in QGX as part of a strategic relationship between the two companies. On March 17, 2008, QGX announced the engagement of Merrill Lynch as exclusive financial advisor to assist the Company with a review of potential strategic alternatives.
This press release includes certain "forward-looking statements". All statements, other than statements of historical fact, included herein, including without limitation, statements regarding potential mineralization, results and future plans and objectives of the Company are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statement.
SOURCE: QGX Ltd.