Queenston rejuvenating gold-rich Kirkland Lake Mining Camp-Scotia Capital – by Dorothy Kosich (Mineweb.com – January 05, 2012)

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Citing its assembled land package in the Kirkland Lake Gold Camp, as well as the company’s attraction as an acquisition target, Scotia Capital has initiated coverage on Queenston Mining.

RENO – Scotia Capital Wednesday initiated coverage of Queenston Mining (TSX: QMI) suggesting its Kirkland Lake gold project is an attractive acquisition target to both JV partner, Kirkland Lake Gold (TSX: KGI) and Kirkland’s majority shareholder Agnico-Eagle Mines.

“The company holds the largest assembled land package in the prolific Kirkland Lake Gold Camp in Ontario, which has produced over 40 Moz of gold, and two projects in Quebec, located adjacent to Agnico-Eagle Mines Limited’s…Lapa deposit,” said Scotia Capital analysts Ovais Habib and Mike Hocking.

Located in Ontario along the border with Quebec, the Kirkland Lake Gold Camp is believed to host nine greater than one-million-ounce gold deposits.

The analysts also cited Queenston’s well-financed, aggressive exploration and evaluation program this year. “Queenston is an aggressive and efficient explorer,” they observed.

Scotia Capital gave Toronto-based Queenston a “1-Sector Outperform” rating and a one-year target price of C$8.75 per share.

“The company is well underway to building a targeted 6.0 Moz of gold in five deposits within the Kirkland Lake Gold Project (eastern section), which would ultimately feed a central milling facility,” Scotia Capital noted. A preliminary economic assessment on the Upper Beaver gold-copper project is scheduled for release during the current quarter.

Scotia’s base-case scenario for the Upper Beaver deposit incorporates 1.5 million mineable ounces of gold and 67 million pounds of copper that would be produced over life-of-mine as a by-product. “We expect the Upper Beaver project to produce ~137,500 oz of gold and 5.9 million pounds of copper per year at a total cash cost of US$627/oz on average starting in 2016.”

Meanwhile, Queenston is well underway with its ongoing underground development and exploration program with JV partner Kirkland Lake Gold on the Kirkland Lake Gold Project.

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