🕐09.01.10 - 00:44 Uhr
Great Quest Completes Sale of Kenieba Concessions for Cash and Shares of $4.35 m
illion and a Production Bonus of up to $3.50 million
GREAT QUEST
METALS LTD.
Suite 515, 475 Howe Street
Vancouver, BC, Canada V6C 2B3
Tel: 604-689-2882 Website: www.greatquest.com
Fax: 604-684-5854 Email:
January 8, 2010
Great Quest Completes Sale of Kenieba Concessions for Cash and Shares of
$4.35 million and a
Production Bonus of up to $3.50 million
VANCOUVER, BC -- Great Quest Metals Ltd.
(TSXV: GQ; Frankfurt: GQM) (Great
Quest) reports completion of the sale of its Kenieba gold project to Avion
Gold Corporation (AVR: TSXV) ("Avion") as announced December 18, 2009.
Avion has now acquired all of the Great Quest interest in three Kenieba
concessions for $4.35 million comprised of $850,000 cash, of which $350,000
was received under a preceding joint venture agreement with Avion, and
7,608,696 shares of Avion at a deemed price of $ 0.46 per share, with a four
month hold.
With the recent appreciation of the Avion shares to the $0.70
range, the value of the transaction to Great Quest has increased by $1.83
million to $6.18 million.
The sale agreement also requires Avion to make further payments of up to
$2.1 million based on gold production from the concessions greater than
400,000 ounces, payable in increments of $700,000 for each additional 50,000
ounces production.
If production from the concessions exceeds 600,000
ounces Avion would be required to make up to a further $ 1.4 million in
payments to complete its obligations under the sale agreement for a total
production bonus of $3.5 million.
The Kenieba concessions are located adjacent to the south and west sides of
the Avion Tabakoto property and are subject to a carried interest for the
Government of Mali ranging between 10% to 20% and underlying interests up to
5%.
Great Quest delineated a 43-101 compliant inferred resource on the
Djambaye 2 gold zone of 324,000 ounce (Carl Verley, P.
Geo., January 28,
2008 Great Quest news release).
This equates to 2,574,000 tonnes grading
3.92 grams per tonne gold.
With the Djambaye 2 gold zone open along strike
and to depth and with other relatively unexplored zones on the concessions,
Great Quest anticipates future increases to the current mineral resource.
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Great Quest Metals Ltd.
January 8, 2010
Page Two
Under the agreement Great Quest is required to acquire a permit on one of
the Concessions, and 25% of the shares issued are held in escrow pending
receipt of this permit.
In the event that Great Quest is unable to obtain
the permit on or before January 8, 2011, then 20% of the Escrowed Shares
shall be released to Avion on each anniversary of the closing date until the
earlier of five years and the date Great Quest receives the permit for the
Comifa Concession.
The sale agreement has received TSX Venture approval.
Concurrently with the sale of its Kenieba project, the Company has arranged
the sale of 1.5 million shares received in this transaction for proceeds of
$1,050,000 or $0.70 per share, subject to regulatory approval.
The Company
also announces the completion of the settlement of $168,590 in debt by way
of the issue of 1,685,900 shares of the Company at a deemed price of $0.10
per share, as announced on November 26, 2009.
All debt settlement shares
issued are subject to a four-month hold period and may not be traded in
British Columbia until April 10, 2010.
Willis W.
Osborne, President and CEO of Great Quest, states "The management
of Great Quest has a high level of confidence in the ability of Avion to
explore the Kenieba concessions and to substantially increase the mineral
resource.
This should not only add to the value of the Avion shares held by
Great Quest but may also lead to the eventual payment to Great Quest of the
production bonuses.
This transaction will also allow Great Quest to pursue
its other gold concessions and an industrial phosphate project in Mali.
Most significantly for the Company it is now positioned to actively solicit
new gold projects of merit without going to the market."
Great Quest is a gold, copper and phosphate exploration company with
interests in Mali, West Africa and British Columbia.
ON BEHALF OF THE BOARD OF DIRECTORS
OF GREAT QUEST METALS LTD.
"Willis W.
Osborne"
Willis W.
Osborne
President