hartleys update

Strong news flow expected from West African drilling
AusQuest Limited (?AusQuest?, ?AQD?, ?Company?) has a diversified portfolio of base and precious metal projects across Australia and in Burkina Faso, West Africa. The Company is well funded with ~A$16.5m in cash (at the end of the Sep?10 quarter) and plans to commence a follow-up drilling programme over a number of promising prospects in West Africa in late October. Drilling is planned right up to the end of March 2011 providing 6 months of continuous activities and news flow. AusQuest recently executed an agreement to sell its two channel iron ore projects in the Pilbara, Western Australia for a total consideration of $7.5m of which over $5m will be attributable to AQD. The prospects to be sold were considered to be non-core assets and will provide additional funds for priority projects in West Africa and Australia.
Gold and massive sulphide targets to be tested
The Comoe JV (AQD 51%, Etruscan Bermuda 49%) is located in the south-west corner of Burkina Faso, West Africa within the under-explored Banfora greenstone belt. In the first round of drilling, AusQuest confirmed gold mineralisation at a number of prospects; including Diarabokoko East where intersections of 8m @ 1.88g/t Au, 4m @ 1.87g/t Au and 4m @ 1.13g/t Au were reported from adjacent drill-holes and Siniko where an extensive surface gold anomaly (>5km strike) tested by a fence of only 8 drill holes intersected anomalous gold from surface to over 76m depth in the last drill hole.
However, we believe the project with the best potential is Phaco Hill, where the Company intersected gold (4m @ 1.87g/t Au, 26m @ 1.26g/t Au), silver (1m @ 750g/t Ag) and base metals (1m @ 6.36%Zn, 9.0%Pb) within an large alteration system interpreted to potentially represent a volcanogenic massive sulphide (VMS). A large, discrete electromagnetic (EM) response, immediately to the south of the Phaco Hill drilling has been identified from the recently completed VTEM survey. This EM target is ~400m long with significant depth extent (>500m) and will be a high priority when drilling recommences at the end of October.
Exploration spend in the order of A$2.5m
The proposed second phase of drilling consists of 10,000m of reverse circulation (RC) drilling and up to 3,000m of diamond drilling. Exploration activities will concentrate on the Komoe project area which contains the Phaco Hill and Siniko prospects. Work will include the testing of EM targets and further drilling of coincident aeromagnetic and gold-in-soil geochemical anomalies. Upon the commencement of drilling the first lot of assay results could be received as early as December. The Company is planning to spend a minimum of $2.5m on exploration during this period. The Comoe JV allows AusQuest to earn up to 80% through staged exploration expenditure.
With an enterprise value of A$29m, cash of A$16.5m (post project divestment), positive results from the pending West African drilling, and ongoing work programs across its Australian projects should result in a significant re-rating of the