Capoose

NI 43-101 Resource Estimate

Inferred Mineral Resource Estimate for Capoose Deposit versus Gold Equivalent (AuEq)* Cutoff

AuEq Cut-off (g/t)	Tonnes	Gold Grade (g/t)	Contained Gold (oz)	Silver Grade (g/t)	Contained Silver (oz)	AuEq Grade (g/t)	Contained AuEq (oz)
0.1 g/t	96,785,363	0.28	871,666	17.59	54,755,024	0.54	1,693,659
0.2 g/t	88,164,480	0.30	850,272	18.77	53,206,709	0.58	1,648,978
0.3 g/t	69,510,922	0.35	784,945	21.22	47,424,322	0.67	1,496,788
0.4 g/t	53,450,298	0.41	699,032	23.93	41,119,662	0.77	1,316,190
0.5 g/t	41,446,345	0.46	612,969	26.49	35,300,905	0.86	1,142,756
1.0 g/t	10,571,828	0.86	293,796	34.24	11,640,233	1.38	468,465

* Gold equivalent (AuEq) is calculated as the sum of the gold content plus 0.015 times the silver content, based upon prices of US$1025/oz. for gold and US$15.50/oz. for silver, which approximate the average prices for these metals over the last two years. (Note: total contained AuEq values may not add exactly because of rounding).

For Methodology on calculating the resource please see the Silver Quest news release dated March 4, 2010.

Size

The project consists of 70 contiguous mineral claims, covering 30,745 hectares of land.

Ownership

The Capoose project consists of 3 property areas (Capoose, Jag, and Fawn) that have been acquired through agreements with third parties. Silver Quest staked two other property areas, Silver Trend and Rusty Creek. Silver Quest is the operator on all of the claims in the Capoose project area. Please see the following news releases for detailed information on each property agreement: March 4, 2010, October 16, 2009, October 26, 2009, and January 17, 2008.

The Inferred Resource is located on a mineral claim that is under a Joint Venture Agreement with Bearclaw Capital Corp. Silver Quest has acquired an initial 60% interest in the Capoose Property. Within 24 months of earning the initial 60%, the Company has a further option to increase its interest to 100%, by paying an additional $2.5 million in cash, with an option to pay 50% of this amount in shares, calculated on the 30-day weighted average of the Company's shares immediately prior to such election.

Upon the Company earning a 100% interest, Bearclaw retains a 2.25% Net Smelter Royalty ("NSR"), with Silver Quest having the option to reduce the NSR to 1.25% with an additional payment of $1,500,000.

Target and Potential

The Capoose project has inferred resources of 41.12 million ounces of silver at a grade of 23.93 g/t Ag and 699,032 ounces of gold at a grade of 0.41 g/t Au. The deposit remains open at depth and along all margins. A geological interpretation of the known mineralization at Capoose indicates that we may be drilling into the top of a large, disseminated gold-silver system.

Silver Quest's focus is on expanding the resource volume. In 2010, Silver Quest has planned 10,000 m of drilling to test the deposit area at depth and to test the southern deposit area. There are also multiple drill targets outside of the immediate deposit area that are defined by geochemical and geophysical anomalies, such as the area of anomalous metal concentrations in soils that trends northeast from the deposit area for over 5 km.

Geology

The Capoose Project is located within the Nechako Uplift, a structurally elevated block of the Stikine Terrane. The property is underlain by rhyolite to andesite tuff, breccias and flows of the lower Jurassic Hazelton Group which were intruded by rhyolite sills and dykes of Cretaceous age. These intrusive rhyolite units are consistently mineralized over significant widths. The wallrock volcanic and sedimentary units are also locally mineralized. Mineralization occurs as disseminated sulphide-garnet clots and sulphide veinlets along irregular fractures. The most common sulphide minerals at Capoose are sphalerite, galena, pyrite, chalcopyrite, pyrrhotite, arsenopyrite and tetrahedrite.

History

The Capoose Property hosts a disseminated gold-silver deposit discovered through geochemical sampling by Granges Exploration AB in 1973. From 1978 to 1984 Granges Exploration AB and Cominco Ltd. defined three zones of low-grade, disseminated style silver-gold mineralization at shallow depths, hosted in garnetiferous rhyolite sills and hornfelsed argillite; these zone are amenable to open pit mining. The main mineralized zone was tested by 70 drill holes; 5,480 m of percussion drilling and 13,980 m of diamond drilling.

Historic exploration at Capoose focused mainly on the silver mineralization. However, the last holes drilled in 1984 returned significant gold values at the southern ends of both Zone 1 and Zone 2. No follow-up work was done on the gold intercepts until Silver Quest's 2008 drill program.

Petrographic studies during the 1980's indicated that garnets, which are closely associated with the sulphide minerals, could have acted as a nucleus for sulphide deposition and mineralization at Capoose.

Maps, Figures & Reports