Silver Quest Announces $10 Million Private Placement

VANCOUVER, June 28, 2011 /CNW/ -- 
NOT FOR DISTRIBUTION TO US NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES


VANCOUVER, June 28, 2011 /CNW/ - Silver Quest Resources Ltd. (SQI-TSX.V) (the "Company") is pleased to announce that it has entered into an
 agreement with a syndicate led by Paradigm Capital Inc. and including
 Stonecap Securities Inc. and Scotia Capital Inc. (the "Agents") in
 respect of a private placement financing to be undertaken on a best
 efforts basis for gross proceeds of up to C$8,002,000 (the "Brokered
 Offering"). The Brokered Offering will consist of up to 4,000,000 units
 (the "Units") at a price of C$1.00 per Unit and up to 3,480,000 common
 shares to be issued as "flow-through" shares for the purposes of the Income Tax Act (Canada) (the "Flow-Through Shares") at a price of C$1.15 per
 Flow-Through Share. In addition, the Company will complete a
 non-brokered private placement of Units for gross proceeds of up to
 C$2,000,000 (the "Non-Brokered Offering).


Each Unit will consist of one common share ("Common Share") of the
 Company and one-half of one common share purchase warrant (each whole
 warrant being a "Warrant") of the Company. Each Warrant will entitle
 the holder thereof to purchase one Common Share at C$1.30 and will be
 exercisable for a period of 18 months after the closing date.


The Units and Flow-Through Shares are collectively referred to herein as
 the "Offered Securities".


The Company has granted the Agents an option, exercisable up to 48 hours
 prior to the closing of the Brokered Offering, to sell up to an
 additional number of Offered Securities equal to 15% of the Offered
 Securities sold under the Brokered Offering.


Upon closing, the Agents shall receive a commission paid in cash equal
 to 6% of the proceeds raised from the Brokered Offering. In addition,
 the Agents shall receive compensation options entitling the Agents, for
 a period of 18 months from the closing date, to acquire that number of
 Common Shares of the Company that is equal to 6% of the number of
 Offered Securities sold pursuant to the Brokered Offering (the
 "Compensation Options").  Each Compensation Option will be exercisable
 to purchase one Common Share of the Company at a price of C$1.15. The
 Company will also pay a finder's fee to an arm's length third-party in
 respect of the Non-Brokered Offering.  Such finder's fee will be
 comprised of cash equal to 6% of the proceeds raised from the
 Non-Brokered Offering and Compensation Options equal to 6% of the
 number of Offered Securities sold pursuant to the Non-Brokered
 Offering.


The net proceeds from the private placements will be used by the Company
 for exploration at its Davidson, Capoose, 3Ts and Yukon properties and
 for general corporate purposes. The gross proceeds received by the
 Company from the subscribers for the issuance of the Flow-Through
 Shares will be used, pursuant to the provisions in the Income Tax Act (Canada), to incur Canadian Exploration Expenses which will be
 renounced in favour of the subscribers for the taxation year ending
 December 31, 2011.


Closing of the private placements is anticipated to occur on or before
 July 19, 2011 and is subject to the receipt of applicable regulatory
 approvals including approval of the TSX Venture Exchange. The
 securities issued will be subject to a standard four month hold period.


SILVER QUEST RESOURCES LTD.

"Randy Turner"

Randy Turner, President

Neither the TSX Venture Exchange nor its Regulation Services Provider
 (as that term is defined in policies of the TSX Venture Exchange)
 accepts responsibility for the adequacy or accuracy of this release.


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