Conquest Mining Limited (ASX:CQT) Activities Report For The Quarter Ended 31 March 2010

Perth, April 27, 2010 AEST (ABN Newswire) - Conquest Mining Limited (ASX:CQT) (PINK:CQMLF) releases its Activities Report for the quarter ended 31 March 2010.

Corporate Review

On 4 February 2010, Conquest Mining Limited (ASX:CQT) (PINK:CQMLF) released the findings of the Definitive Feasibility Study ("DFS") for the Mt Carlton gold-silver-copper Project in Northern Queensland.

The Board of Conquest considers that while the DFS outcomes identify the project as profitable, it is not sufficiently robust to develop before long term concentrate offtake arrangements are finalised and other project optimisations completed. Conquest is committed to examining all development options so as to maximise project returns prior to the development of the Mt Carlton Project.

On 9 March 2010, the Board of Conquest announced that Mr Jake Klein accepted a nomination to the position of Executive Chairman of the Company. Mr Nicholas Curtis and Mr James Askew will also be appointed to the Board as Non-Executive Directors.

The appointments will only take effect if all resolutions being put before shareholders at the Extraordinary General Meeting (EGM) to be held on 12 May 2010 are approved.

Mr John Terpu, Mr Bruno Firriolo and Mr Joe Radici have indicated their intention to step down from the board on approval of appointments of Messrs Klein, Curtis and Askew. Existing Chairman, Mr Rich Krasnoff will continue with Conquest as a Non-Executive Director as will Non-Executive Directors, Mr Doug Stewart and Mr Paul Marks.

Since accepting the nomination as Executive Chairman, Mr Klein has been actively participating in the management of the Company. Mr Klein has been joined by several former colleagues from Sino Gold Mining Limited who are currently working on a short term contract basis until the EGM. Team members include Mr Ross Jenkins, who was responsible for the development and construction of Sino Gold's mines, Mr Aaron Colleran, who led the Corporate Business Development activity and Mr Charles Wang who held a senior position at the Sino Gold concentrate processing facility in Shandong, China.

Key areas of focus have been:


1. Resolving the dispute with Gold Fields Australasia ("Gold Fields") As announced on 22 March 2010 the dispute between Conquest and Gold Fields was amicably resolved.

Since this resolution, work has focused on developing a comprehensive exploration program to test the numerous identified targets during the upcoming exploration field season. High priority is being placed on those targets that have the potential to become satellite deposits to Silver Hill.

2. Reviewing the proposed flow sheet methodology

Recent flotation test work results (announced on 12 April 2010) from the Silver Hill deposit have been encouraging. Test work was planned to determine whether a single "mixed" enargite and pyrite rich concentrate could be produced, rather than the previous strategy of producing a high grade enargite concentrate for sale and a separate lower grade pyritic concentrate for further on-site treatment.

Highlights of these results were recovery of 90% for gold, 91% for silver and 96% for copper to cleaner concentrate; which compare favourably with the DFS estimates of 70% for gold, 64% for silver and 91% for copper. Test work was completed on a composite sample blended from crushed drill core originating from across the V2 ore body. The feed grade of the test composite was calculated as 0.45% copper, 3.50 g/t gold and 26 g/t silver which was similar to the average expected mining grade for the V2 ore body.

Work is now prioritised on completing variability testwork to determine whether the bulk sample result is representative of the entire ore body and to understand variability across the ore body.

3. Securing a long term reliable off take party

To facilitate securing a long term reliable off take party, the Company has appointed Mr Charles Wang as the Marketing Manager. Mr Wang previously had a senior role at the Sino Gold Mining Limited "Biogold" plant in Shandong Province in China, a plant that purchased and processed concentrate from both domestic and international customers.

It is anticipated that detailed discussions with potential off take parties will commence shortly, concurrent with project optimisation work underway.

4. Optimising capital costs

The DFS identified that capital costs had increased by 48% to A$138 million when compared to the Pre Feasibility Study capital cost estimates. Work has commenced, and is currently ongoing, to identify areas of potential savings including optimising the plant throughput, reviewing the development sequencing and strategy of Area 39 and V2 deposits, procuring second hand items and identifying suitable items that can be procured at lower cost in China.

Review of Operations

Definitive Feasibility Study

The Mt Carlton DFS was finalised during the quarter. The scope of the DFS was to evaluate the technical and economic feasibility of mining the currently defined Silver Hill resource, and processing to produce a high-grade precious metals concentrate for sale to smelters. The key findings of the DFS include:

- Ore reserve of 7.4Mt grading 3.12g/t gold, 67 g/t silver and 0.41% copper
- Mineable as two separate open pits - V2 and Area 39
- Conventional crush-grind-float processing to produce a polymetallic concentrate
- 1Mtpa throughput rate
- Seven year mine life
- Average annual production of 61,000t of concentrate containing approximately 80,000oz
gold, 700,000oz silver and 3,600t copper
- Upfront capital costs of A$137.8 million (including owners costs and contingency)
- Mining cost of A$24.70 per tonne of ore (including waste movement)
- Processing cost of A$23.40 per tonne of ore

The DFS pointed to substantially increased capital costs (up 48%), modestly increased operating costs (up 10%) and decreased metal payability terms (down by between 10-30%) compared to the Pre-Feasibility Study completed in April 2009.

While the DFS indicates that the project may be profitable at current commodity process, it is not sufficiently robust to develop before long term concentrate offtake arrangements are finalised and other project parameters are optimised. In its current form, the project does not provide the Board of Conquest with sufficient confidence to commit to a development timetable.

The Mt Carlton ore is characterised as a multi-metal refractory sulphide ore. The potential value elements are gold, silver, and copper. Lead, zinc, and arsenic are also present as potential penalty elements. Due to the polymetallic nature of the ore, concentrates are best treated at specialised smelters which recover such elements. Accordingly the DFS was based on producing high-grade gold-silver-copper concentrates for sale to offshore specialist smelters.

A review of the feasibility of enhancing the Mt Carlton Project by application of the GEOCOAT* bioleaching process to produce gold and silver dore and copper cathode at site was subsequently completed. This process did not sufficiently enhance the overall project economics to warrant further investigation and therefore the DFS was completed on the basis that only a high grade concentrate would be produced for sale and the low grade concentrate be left untreated.

As discussed previously, work to optimise the project and a review of the proposed process flow sheet has commenced. Similarly, detailed discussions with potential off take parties will commence shortly.

Trial Grade Control Drilling Program

A trial grade control drilling program was undertaken in December 2009 at the Area 39 ore body.

The drilling program comprised 175 vertically oriented RC drill holes spaced on a 10 metre by 10 metre grid and drilled to an average 64 metres in depth. This work was undertaken with a number of objectives, including assessing continuity of mineralisation on a close spaced drill pattern for reserve modelling; providing data to allow calculation of optimum grade control drill hole spacing; and providing additional samples for metallurgical test work. Final assay results from the program were received during the quarter and show good correlation with existing interpretations of the Area 39 mineralisation. The results of the trial, along with those completed last year at the V2 ore body, provide the necessary assurance that the mineral resources estimated by the Silver Hill model can be used with confidence for mine optimisation studies and mine planning.

Exploration - Mt Carlton Project

Step out and infill RC drilling was completed at the Herbert Creek East and Western Lodes deposits in late 2009 and assay results were received during the quarter. The results were essentially in line with expectations and these deposits are now effectively closed off. Further drilling is planned at Herbert Creek East to better define the high grade zones of mineralisation.

Assay results from the final two deep drill holes targeting mineralisation beneath the Silver Hill deposit were received during the quarter and are shown in Table 1. The objective of these holes was to test for a second, deeper volcanic host to mineralisation or a porphyry source to the Silver Hill mineralisation. The disappointing results and the alteration styles intersected suggest that the source plutons of the mineralising fluids at Silver Hill are not proximal to the deposits and may be deeply buried or laterally some distance away.

With the resolution of the dispute with Gold Fields and termination of the joint venture over the tenements surrounding the Silver Hill deposit, Conquest now has sole exploration and development rights over the entire 100% owned Mt Carlton Project area. Since this resolution, work has focused on assimilating the exploration data provided by Gold Fields and on developing a comprehensive exploration program to test the known targets and the numerous additional targets identified by Gold Fields. Highest priority is being placed on those targets that have the potential to become satellite deposits to Silver Hill.

A new phase of exploration drilling at Mt Carlton is planned to commence in May 2010. The immediate strategy is to add high-grade tonnes to the reserve inventory within the Silver Hill exploration lease. A range of grass roots through to advanced targets are also being followed up in the surrounding Mt Carlton tenements where the strategy is to discover satellite deposits which would feed the Silver Hill plant.

Expenditure

Exploration and development expenditure by Conquest Mining Limited during the March 2010 quarter was A$2.1 million.

Attached is a copy of the Company's Mining Exploration Entity Quarterly Report (Appendix 5B) in accordance with Listing Rule 5.3.

For the complete Conquest Mining Limited activities report for the quarter ended 31 March 2010, please click the following link:

http://www.abnnewswire.net/media/en/docs/62703-ASX-CQT-488595.pdf

Contact

John Terpu Managing Director Conquest Mining Limited Ph: +61-8-9240-4111 Fax: +61-8-9240-4054 www.conquestmining.com.au