AusQuest Limited (ASX: AQD) is pleased to advise that it is gearing up to commence a new program of diamond drilling at its Hamilton Copper Project in North West Queensland under the Strategic Alliance Agreement (SAA) with a wholly-owned subsidiary of South32.

A total of three diamond drill holes for 1,850m is planned to test two distinct gravity targets that are closely associated with mineralised banded iron formation (BIF) sequences and ironcalcium alteration (skarns) that were intersected by earlier drilling programs.

The areas of semi-coincident gravity and magnetic responses are considered high-priority targets in light of results from the earlier drilling and are believed to have significantly upgraded the prospects for copper at Hamilton.

The drilling program should take approximately 3-4 weeks to complete with samples to be sent on an ongoing basis to the Intertek Genalysis Laboratory in Townsville for analysis. Final assay results should be available 4-6 weeks after the completion of drilling.

The mineralised BIF at Hamilton appears similar in nature to that hosting the Osborne copper-gold deposit (global resource 36Mt @ 2% Cu and 1g/t Au), located approximately 70km to the north, which also has an associated gravity response. The Project covers a belt of magnetic rocks extending over a strike length of approximately 30km under Eromanga Basin cover, which is approximately 200m thick.

Numerous magnetic targets within this belt have never been tested by drilling. AusQuest's Managing Director, Graeme Drew, said the highly encouraging recent gravity results had significantly upgraded the potential for a copper-gold discovery at Hamilton, paving the way for the upcoming drilling program. 'We are excited about the potential for a significant discovery at Hamilton and the prospectivity of the greater region, and look forward to drilling commencing very shortly' he said.

FORWARD LOOKING STATEMENT

This report contains forward looking statements concerning the projects owned by AusQuest Limited. Statements concerning mining reserves and resources may also be deemed to be forward looking statements in that they involve estimates based on specific assumptions. Forward-looking statements are not statements of historical fact and actual events and results may differ materially from those described in the forward looking statements as a result of a variety of risks, uncertainties and other factors. Forward looking statements are based on management's beliefs, opinions and estimates as of the dates the forward looking statements are made and no obligation is assumed to update forward looking statements if these beliefs, opinions and estimates should change or to reflect other future developments.

Contact:

Tel: 08 9364 3866

Fax: 08 9364 4892

Email: InvestorRelations@ausquest.com.au

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