AusQuest Limited announced that it has successfully acquired tenements over a partially exposed copper (+/- gold) porphyry system in southern Peru. The project is located within 10km of the coast, close to the Panamerican Highway and approximately 60km south of the town of Chala. The Cangallo Prospect, which has not previously been explored, was originally identified by the Company's proprietary regional aeromagnetic/radiometric survey and was acquired recently when the area became available for pegging.

Geological mapping and rock-chip sampling of limited sub-crop has confirmed the presence of highly anomalous copper (up to 0.64% Cu), molybdenum (up to 42ppm Mo) and scattered gold values (up to 2.5g/t Au) within multiple-veined and altered (sericite) volcanics and porphyritic rocks, indicating the presence of a partially exposed porphyry system. Satellite imagery suggests that the porphyry system occurs within a large-scale caldera structure (~5km x 2km) at the intersection of regional NE and NW trending faults. Extensive thin cover (colluvium and/or Milo Formation sediments) within the inferred caldera is believed to mask the full-scale potential of the porphyry system, with minor sub-crops within covered areas also containing sericite altered volcanics and highly anomalous copper and molybdenum values (plus other pathfinder elements).

AusQuest's Managing Director, Graeme Drew, said the discovery of a partially exposed porphyry copper system in an area with excellent infrastructure attributes, close to the Panamerican Highway, was a real surprise for the Company as it was thought that all exposed porphyries, especially in Peru, would have been found by now. Next Steps: Design drilling program to test below high surface copper values and below cover; Initiate the drill permitting process to obtain clearances for drilling; Complete drilling program once permits have been obtained.