Keno

Location

The Keno property is located near Keno City (7 kms), 45 kms northeast of Mayo and approximately 360 kms north of Whitehorse, Yukon.

Size

The Property consists of 19 quartz mining leases comprising approximately 700 acres.

Ownership

Silver Quest owns a 100% interest in the Keno Property.

Target and Potential

The main group within the project area, known as the Formo Group, is comprised of 13 leases and is cut by Highway 11 (accessing Keno City) located 2 kms along strike to the northeast of the former major producer, the Hector Calumet mine, which produced 2.7 million tons with a grade of 1,216.1 g/t (35.47 oz/t) silver. Since the 1930's various companies have conducted exploration on the Formo Group, including surface trenching and sampling, underground development on two levels, limited diamond drilling, and an open cut with minor production. In 1931, 36 tonnes grading 7,886 g/t Ag (230.0 oz/t Ag) and 60% Pb were mined. In 1961, 13 tonnes grading 4,957.6 g/t Ag (144.6 oz/t Ag), 57% Pb and 10.3% Zn were mined and shipped from the Formo Group. Yukon Minfile reports state that mineralization on the group comprises narrow lenses of galena, sphalerite and minor tetrahedrite in a carbonate gangue within a typical narrow, north-trending, transverse vein cutting schist and greenstone beneath the Keno Hill (Central) Quartzite.

Yukon Open File Report (106-D) from 1965 (D.D. Campbell report for Peso Silver Mines) indicates an estimated resource on the Formo Group, as defined by the underground workings of 39,900 tonnes grading 548.6 g/t Ag (16.0 oz/t Ag), 6.9% Pb and 10.7% Zn.

Campbell also indicated in this report; "With present (1965) knowledge of the ore controls it is possible to confirm a fair tonnage of ore and the potential of finding new ore bodies along strike is excellent wherever greenstone or quartzite bands may be encountered". The best potential lies with the road accessible Formo Group, 7.4 km from Elsa. In addition (to the exploration potential) the current reserves, supported by excellent infrastructure, could possibly facilitate a small-scale high-grade operation.

The resource mentioned above is a historical estimate, and was not compiled within the definitions and standards outlined in National Instrument 43-101, and the Company cautions that these historic resource estimates cannot be relied upon.

Geology

The Company completed a limited sampling program on the Formo Group to confirm the reported mineralization on the property. A total of 22 surface samples were taken, with the best values returned from dump samples (grab samples) at the lower (2700) adit area.

Significant Surface Sample Results from 2008 Sampling Program

Description	Sample (#)	Ag (g/t)	Ag (oz/t)	Cu (%)	Pb (%)	Zn (%)
Main 2700 Adit - Galena, grab	Keno 019	48.3	1.41	0.002	0.11	0.01
Main 2700 Adit - Galena, grab	Keno 020	3025.0	88.22	0.096	15.85	39.80
Main 2700 Adit - Galena, grab	Keno 021	2837.0	82.74	0.049	19.15	29.60
Main 2700 Adit - Galena, grab	Keno 022	2985.0	87.05	0.011	19.50	0.17

In addition, two grab samples; Keno 028 and Keno 029 located approximately 400 m southwest of the open cut area returned significant gold and silver values. Keno 028 returned 4.245 g/t Au (0.124 oz/t Au) and 12.6 g/t Ag (0.37 oz/t Ag). Keno 029 returned 1.020 g/t Au (0.030 oz/t Au) and 38.6 g/t Ag (1.13 oz/t Ag).

The sampling program clearly confirmed the style and tenure of the mineralization on the Formo Group on the Company's Keno Hill property and warrants additional exploration.

The Company is presently considering various financing options including joint venture arrangements with other companies active in the area. With the improved silver price, the historic Keno Silver District is experiencing a significant increase in exploration activity.

Maps & Figures

News Releases

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