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Hartleys 22nd Feb

Further Drill Success at Phaco Hill, West Africa
AusQuest Limited (?AusQuest?, ?AQD?, ?Company?) has intersected more good-grade gold at its Comoe JV (AQD 51%, Etruscan Bermuda 49%) in Burkina Faso, West Africa. Recent drill results from the southern end of the Phaco Hill prospect returned 19m @ 2.25g/t gold, including 1m @ 12.3g/t gold; 12m @ 4.92g/t gold, including 1m @ 13.5g/t gold; and 11m @ 3.12g/t gold, including 1m @ 8.6/t gold. The mineralisation, contained within semi-massive sulphides is interpreted to occur within a steep southerly-plunging shoot, up to 100m in length which remains open at depth. Silver and base metal were also intersected in the drill holes with assays pending. Reverse circulation (RC) drilling is on-going with a diamond rig now on site to test deeper conductive targets.
Phaco Hill is the first of 5 targets to test at Komoe
The Phaco Hill prospect is located within the Komoe tenement area in the southern parts of the under-explored Banfora greenstone belt. During an early phase of exploration AusQuest intersected high-grade gold (8m @ 7.7g/t gold from ~75m true depth) within sulphides while testing a geophysical electromagnetic (EM) target. The sulphides are thought to be the cause for the conductive EM anomaly and offers encouragement for other nearby targets. The Company has another 5 priority targets to test within the Komoe tenement, though at this stage, the Phaco Hill prospect remains the focus for current activities.
The latest drill results has extended gold mineralisation at Phaco Hill ~25m north and ~50m south of the previously reported 8m @ 7.75g/t Au, confirming the continuity of mineralisation in this area. The Company also reports a large area of low-grade gold mineralisation which included 40m @ 0.29g/t Au and 42m @ 0.31g/t Au 250m north of the high-grade lens (8m @ 7.75g/t). This zone of lower grade mineralisation may suggest a sub-parallel system which requires more detailed follow-up. Geophysical VTEM data suggests a large depth extent to the sulphide mineralisation at Phaco Hill, with a diamond rig now arrived on site to test deeper targets.
More drilling the key to unlocking economic potential
The current phase of drilling consists of 15,000m of RC drilling (10,000m outstanding) and up to 6,000m of diamond drilling across multiple gold and base metal targets. Work will include the testing of EM targets and further drilling of coincident aeromagnetic and gold-in-soil geochemical anomalies. The Company is planning to spend a minimum of $2.5m on exploration during this period.
AusQuest represents a new, well-funded entrant to the West African exploration scene and has had early exploration success at a number of prospects, notably Phaco Hill, where high-grade gold, silver and base metals continue to be intersected. The Company has a current market capitalisation of A$32m for an enterprise value of ~A$13m, given the strong cash position. We expect more positive results from on-going West African exploration and work programs across AusQuest?s Australian projects. We recommend AusQuest Limited as a Speculative Buy.