goldenpolarbear
7 years ago
E-o-m-7, GOLD is still hovering below $1300 USD and China Gold Mining International Resources stocks will handsomely improve once it recovers yet again....
Interesting, when and if Kerr Mines has their AGM on Oct. 24th as mentioned via Sedar with any positive news these stocks should s e r i o u $ l y POP! imho
http://www.investorx.ca/search/00003818/kerr-mines-inc
With an experienced team in place, Kerr Mines implements a strategy to create profits for shareholders.
In the Western United States, and in Arizona in particular, the mining industry is a vibrant and valuable part of the economy and has been for more than a century.
There is an incredible inventory of economic mineral deposits in the rust-colored lands. When combined with pro-mining communities and government, Arizona ranks in the top 10 mining jurisdictions globally. This makes the state a highly attractive location for mining companies to invest.
Claudio Ciavarella knows this all too well. He’s a professional accountant by trade, as well as a private business owner. As a long-time investor in the precious metals space, he has a deep understanding of the mining landscape.
For the past 12 years, Ciavarella has been an investor in Kerr Mines and its Copperstone Project, a high-grade, fully permitted gold deposit. Today, he is the second largest shareholder of the company, and its CEO.
“There are many aspects that make Kerr Mines unique from other junior mining companies,” he shared. “As a private business owner, I know how critical every dollar is to the success of a company.”
A Company in Friendly Hands
In early 2016 the company was facing financial difficulties. At the time, the sector was also suffering and many companies were facing bankruptcy or being sold below book value.
“I decided to become more active in the company,” Ciavarella said. “I met with one of the large shareholders (now the Chairman) and we both agreed that we wanted all the shareholders to participate in the upside of the business rather than see it go into bankruptcy.”
The pair agreed to implement a significant turnaround strategy. They purchased all the debt from the debtholders, injected fresh capital into the business, and in April 2017, Ciavarella took on the position as CEO.
“This decision gave us a lot of credibility in the market,” he commented. “It was definitely a unique approach and one that was not expected. Purchasing and restructuring all the debt significantly de-risked the company as all of the debt moved into friendly hands with long-term maturities.”
This afforded the company with the necessary financial stability to allow the management team to move the Copperstone mine forward and continue creating shareholder value.
The Copperstone Mine
The Copperstone project is a former producing mine with high-grade gold resources defined. When Kerr acquired the asset—which included a land package that is approximately 3,600 hectares—the company’s geologists believed there would be tremendous exploration potential for adding to the existing resource.
As such, the opportunity to continue creating shareholder value through the implementation of its exploration program became a key strategic focus.
Previous drilling efforts from the publically-traded company that owned the Copperstone Project before Kerr indicated that the Copperstone asset is a high-grade gold project. There is 43-101 compliant historical resource of approximately 300,000 ounces with a grade of approximately 10 grams per ton.
“The aspect that creates our confidence as we move forward is the fact that previous drilling on the project has been successful in identifying additional opportunities that were never pursued due to lack of capital, we are pursuing these and other targets to expand our resources,” said Ciavarella.
In addition to the many highly attractive features of this project, which include prior successful production of over 500,000 ounces of gold from the Copperstone zone, an existing resource, a huge land package with tremendous exploration upside, excellent supportive mining jurisdiction, and all permits in place, is the added benefit that all infrastructure required to operate a mine are in place as well.”
https://thebossmagazine.com/mining-industry-kerr-mines/#
Eom7, I wonder if China Gold International Resources, Waterton Global Resource or NewCrest will try to acquire any of Kerr's golden assets while the POG is down?
https://www.watertonglobal.com/login.html
eom7
14 years ago
China Gold International Resources Corp. Ltd.: 2010 Drilling Program Produces High Grade Gold Intercepts at Jiama
47.3m Grading 4.34 g/t Gold and 1.75 g/t Silver Including 9.4m Grading 17.75 g/t
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Companies:CHINA GOLD INT RESOURCES CORP.
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CGG.TO 5.58 +0.14
Press Release Source: China Gold International Resources Corp. Ltd. On Thursday November 4, 2010, 9:15 am EDT
VANCOUVER, BRITISH COLUMBIA--(Marketwire - 11/04/10) - China Gold International Resources Corp. Ltd. (the "Company") is pleased to announce intercepts of high grade gold mineralization at the Jiama copper poly metals project in the Gandise Metallogeny Belt in Tibet, China. Results of the drill program include 47.3m grading 4.34 g/t gold and 1.75 g/t silver including 9.4m grading 17.75 g/t gold and 5.33 g/t silver at Jiama drill hole ZK4504 in the northwest corner of the Jiama Property (see Figure 1: location of ZK4504 and Jiama 2010 drilling plan map: http://media3.marketwire.com/docs/cgg-map1.pdf). The gold mineralization is hosted in a quartz-diorite porphyry dike.
In addition, oxidized gold mineralization of 14.57m grading 6.5g/t gold and 8.4g/t silver was intercepted at the Elephant Back MT exploration property some five kilometers south east of the Jiama project.
Table 1: Significant gold mineralization intercepts at Jiama and Elephant
Back MT Properties
----------------------------------------------------------------------------
From To Interval Gold Silver Hosting
Property Drill Hole (m) (m) (m) (g/t) (g/t) Rocks
----------------------------------------------------------------------------
Jiama ZK4504 Quartz-diorite
133.2 180.5 47.3 4.34 1.75 porphyrite
----------------------------------------------------------------------------
including Quartz-diorite
145.8 155.2 9.4 17.75 5.33 porphyrite
----------------------------------------------------------------------------
Elephant ZK003 Limonitized
Back MT 179.5 194.07 14.57 6.5 8.4 hornfels
----------------------------------------------------------------------------
Note: Cut off grade is 0.5 g/t gold. The interval is a drill intercept
width; while the true thicknesses of the intervals are unknown
These high grade gold intercepts represent new target areas. Further exploration may allow the company to define a large, stand alone ore body with high gold values. This would increase the gold production potential at the Jiama Project.
Dr. Song Xin, CEO of the Company commented: "The greater than half ounce per tonne, 9.4m high grade gold mineralization interval in the quartz-diorite porphyry dike suggest the potential for us to identify a high grade, standalone, bulk tonnage gold deposit at Jiama in addition to the existing large copper poly-metallic deposit. We will prioritize this zone for additional drilling targets next year."
Up to date, 89 holes amounting to 49,491 drilling meters of the proposed 50,000 meter drilling program have been completed at the Jiama Project. 5 other holes are still on-going. The assay results for a total of 9 holes (including ZK4504 and Elephant back MT ZK003) have been received (Table 2) since the news release on Sept. 28th of 2010.
Table 2: The assay results Summary for the 9 drilling holes at Jiama Project
----------------------------------------------------------------------------
Intervals
Drill Hole (m) Au (g/t) Ag (g/t) Cu (%) Mo (%) CuEQ
----------------------------------------------------------------------------
ZK019 29 0 1.17 0.15 0.221 1.71
------------------------------------------------------------
15.91 0.26 16.21 0.7 0.028 1.82
----------------------------------------------------------------------------
ZK813 23.74 0.01 2.12 0.31 0.004 0.46
------------------------------------------------------------
4 0.01 0.63 0.15 0.073 0.68
------------------------------------------------------------
22.94 0.02 2.33 0.43 0.049 0.9
------------------------------------------------------------
76.64 0.6 14.13 0.61 0.02 1.61
------------------------------------------------------------
5 0 0.85 0.08 0.11 0.87
------------------------------------------------------------
9 0.12 11.4 0.51 0.02 1.27
------------------------------------------------------------
22 0 0.56 0.02 0.163 1.16
----------------------------------------------------------------------------
ZK819 4 0 1 0.16 0.057 0.6
------------------------------------------------------------
10 0 0.71 0.1 0.034 0.38
------------------------------------------------------------
14 0 0.92 0.16 0.039 0.48
------------------------------------------------------------
4 0 0.86 0.16 0.039 0.47
------------------------------------------------------------
6 0 0.76 0.07 0.033 0.34
------------------------------------------------------------
12 0 0.78 0.12 0.034 0.4
------------------------------------------------------------
52 0 1.2 0.16 0.028 0.42
------------------------------------------------------------
4 0 0.77 0.09 0.041 0.41
------------------------------------------------------------
126.9 0.08 6.76 0.42 0.07 1.3
------------------------------------------------------------
11 0.08 4.1 0.23 0.022 0.62
----------------------------------------------------------------------------
ZK3116 14 0.35 16.54 0.85 0.002 1.81
----------------------------------------------------------------------------
ZK4010 6 0 1.64 0.34 0.009 0.49
------------------------------------------------------------
10 0 1.83 0.4 0.015 0.6
------------------------------------------------------------
4 0 2.42 0.37 0.017 0.62
------------------------------------------------------------
10 0 1.84 0.2 0.03 0.5
------------------------------------------------------------
4 0 1.54 0.21 0.12 1.11
------------------------------------------------------------
8 0 1.23 0.12 0.051 0.53
------------------------------------------------------------
8 0 1.63 0.27 0.017 0.48
------------------------------------------------------------
41.23 0.01 2.78 0.25 0.167 1.54
------------------------------------------------------------
6 0.16 10.27 0.42 0.025 1.18
------------------------------------------------------------
14 0.68 32.6 1.45 0.007 3.36
------------------------------------------------------------
13.12 0.19 13.1 0.54 0.006 1.32
----------------------------------------------------------------------------
ZK4306 5.75 0.63 31.16 1.6 0.035 3.61
----------------------------------------------------------------------------
ZK4504 47.3 4.34 1.75 0 0 0.87
----------------------------------------------------------------------------
Elephant Back MT
ZK003 14.57 6.5 8.41 0.12 0.048 2.07
----------------------------------------------------------------------------
Elephant Back MT
ZK006 5 0.05 9.7 0.36 0.121 1.78
------------------------------------------------------------
4 0 0.51 0 0.051 0.39
------------------------------------------------------------
19.47 0 2.55 0.07 0.053 0.58
----------------------------------------------------------------------------
Note: Cutoff grades are 0.3% for copper, or 0.03% for molybdenum, or 0.5 g/t
for gold. The interval is a drill intercept width; the true thicknesses of
the intervals are unknown yet although the mineralized body is in the
tabular shape and its true width is probably close to the drill intercept
width. CuEq is calculated based on the following formula:
CuEq=Au(g/t)(i)0.18+Ag(g/t)(i)0.053+Cu(%)(i)1+Mo(%)(i)6.87+Pd(%)(i)0.32+Zn(%
)(i)0.34
SAMPLING, ASSAYING, QUALITY CONTROL AND QUALIFIED PERSON
Sample preparation and analysis for the Jiama drill core samples were undertaken by China Southwestern Metallurgic Geology Analytical Center ("Southwest Center") in Pengzhou, Sichuan Province, which is an accredited laboratory by the Chinese National Accreditation Board for Laboratories ("CNAL"), and Ministry of Land and Mineral Resources of China ("MOLR"). The Southwest Center set up a sample preparation facility in the Jiama core storage warehouse. Sample preparation was undertaken by the Southwest Center personnel. Drill core samples were cut in halves using a diamond saw first. One-half of the drill core was sampled and assayed using the standard analytic methods specified in "The Quality Administration Standards for Analysis in Geological and Mineral Resource Laboratories" (DZ0130-94) promulgated by the former Ministry of Geology and Mineral Resources of China. Gold grades were determined by an aqua regia + fluoride digestion, reactivated carbon concentration, and atomic absorption spectroscopy ("AAS") procedure. Copper, lead, zinc, molybdenum, and silver grades were determined using an aqua regia + hydrofluoric acid + perchloric acid digestion and Inductively Coupled Plasma Atomic Emission Spectrometry ("ICP-AES") or AAS procedure. All samples were analyzed for the above six metals. All the assays were completed at the Southwest Center. To maintain independent quality control on the laboratory, 2% of duplicate, blank and standard samples respectively are included in the all assay samples. The Southwest Center also uses an extensive range of internal standards. External check assays are routinely performed on check samples submitted independently by the Company to National Geological Sample Test Center in Beijing. Further information on the Jiama project and technical information surrounding the Jiama project can be found in a technical report on the Jiama Project dated September 9th 2010 entitled "Independent Technical Report on the Jiama Copper Polymetallic Project" and located on the Company's profile on Sedar at www.sedar.com. Quality control and assurance programs are implemented in line with the standards of National Instrument 43-101. The exploration program on the Jiama project is managed by Dr. Tang Juxin, a senior researcher from Geology Academy of China. It is supervised by Dr. Yingting (Tony) Guo, P.Geo., an exploration Manager of the Company and a Qualified Person as defined under National Instrument 43-101. Dr. Guo has visited the Jiama Project during Oct. 22nd -23rd, 2010, and supervised the scientific and technical information contained in this news release.
About China Gold International Resources Corp. Ltd.:
China Gold International Resources Corp. Ltd. is a mining company whose principal property is the CSH Gold Mine. The Company began producing gold at the CSH Gold Mine in July 2007. The Company's shares are listed on the TSX under the symbol "CGG". China National Gold Group Corporation, a Chinese state-owned enterprise owns approximately 39% of China Gold International Resources Corp. Ltd. shares.
The Company has filed a Web Proof Information Pack ("WPIP") disclosure document on the Stock Exchange of Hong Kong ("HKSE") website in respect of a proposed dual-listing of its common shares on the HKSE. Listing on the HKSE is a condition to completion of the Skyland Acquisition. A copy of the WPIP has been filed on and is available for review on the Company's profile on SEDAR at www.sedar.com.
Forward-looking statements
Certain statements made herein, including the proposed future drilling programs at the Jiama Project and other statements relating to matters that are not historical facts and statements of our beliefs, intentions and expectations about developments, results and events which will or may occur in the future, constitute "forward-looking information" within the meaning of applicable Canadian securities legislation and "forward-looking statements" within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking information and statements are typically identified by words such as "anticipate", "could", "should", "expect", "seek", "may", "intend", "likely", "plan", "estimate", "will", "believe" and similar expressions suggesting future outcomes or statements regarding an outlook. All such forward-looking information and statements are based on certain assumptions and analysis made by China Gold International Resources Corp Ltd management in light of their experience and perception of historical trends, current conditions and expected future developments, as well as other factors management believes are appropriate in the circumstances. These statements, however, are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking information or statements. Important factors that could cause actual results to differ from these forward-looking statements include those described under the heading "Risks and Uncertainties" elsewhere in the Company's MD&A filed at www.sedar.com. The reader is cautioned not to place undue reliance on forward-looking information or statements. Except as required by law the Company does not assume the obligation to revise or update these forward-looking statements after the date of this document or to revise them to reflect the occurrence of future, unanticipated events.
Contact:
Contacts:
China Gold International Resources Corp Ltd
Frank Lagiglia
Investor Relations Manager
+1.778.668.9883
info@chinagoldintl.com
www.chinagoldintl.com
eom7
14 years ago
China Gold International Resources to Purchase Jiama Mine
VANCOUVER, BRITISH COLUMBIA, Aug. 30, 2010 (Marketwire) -- China Gold International Resources Corp. Ltd. ("China Gold International" or the "Company") (TSX:CGG) is pleased to announce that it has signed a definitive purchase agreement (the "Purchase Agreement") with China National Gold Group Hong Kong Limited ("China National Gold Hong Kong"), a wholly owned subsidiary of China National Gold Group Corporation ("China National Gold"), the Company's largest shareholder, and Rapid Result Investments Limited ("Rapid" and together with China National Gold Hong Kong, the "Vendors"), pursuant to which it will purchase 100% of Skyland Mining Limited ("Skyland") from the Vendors. The chief asset of Skyland is its 100% interest in the Jiama property (the "Jiama Property"), a copper polymetallic metal mining property located in Metrorkongka County, Tibet.
Zhaoxue Sun, Chairman of China Gold International, commented, "The acquisition of Skyland represents the first significant step in China National Gold's goal of establishing China Gold International Resources Corp. Ltd. as its international flagship company."
The Transaction:
The Purchase Agreement provides that China Gold International will purchase all of the issued and outstanding shares of Skyland from the Vendors and assume shareholder loans made by each of China National Gold Hong Kong and Rapid to Skyland in the aggregate amount of approximately US$42.3 million in exchange for US$742,300,000, with such consideration payable by China Gold International through the issuance of approximately 170,252,000 common shares of China Gold International at a deemed price of Canadian $4.36 per share.
The terms of the transaction were settled by a special committee of independent directors, with the support of a valuation and fairness opinion by Haywood Securities Inc.
Completion of the transaction is subject to a number of conditions, including but not limited to receipt of shareholder approval from China Gold International's disinterested shareholders, the completion of China Gold International's listing on the Hong Kong stock exchange and receipt of applicable regulatory approvals, including TSX approval and approval of the China Securities and Regulatory Commission. A special meeting of shareholders to approve the Transaction is expected to occur in October, 2010 and assuming China Gold International's disinterested shareholders approve the transaction and all other conditions are met, the Transaction is expected to close in early November, 2010. An information circular detailing the transaction is expected to be filed under the Company's profile on SEDAR at www.sedar.com. The information circular will include the formal valuation of the Jiama Property received from Haywood.
The Transaction also acts as a catalyst for China Gold International to become the flagship overseas enterprise of the China National Gold Group. As part of the Transaction, it is contemplated that the China National Gold Group will grant to the Company a non-compete undertaking in which the Company will be entitled to any and all mineral property opportunities sourced by China National Gold. Meanwhile in the Purchase Agreement the Company will covenant not to acquire further gold and non-ferrous mineral properties in PRC.
About the Jiama Property:
China Gold International engaged Behre Dolbear Asia Inc. ("BD Asia") to complete a technical review of the Jiama Property and, as part of its engagement, BD Asia will produce an NI 43-101 technical report on the Jiama Property, which will be filed on SEDAR at www.sedar.com within the earlier of 45 days of this press release and the date of filing the information circular for the meeting to be held in connection with the Transaction.
BD Asia reported that the Jiama Property hosts a large copper-polymetallic deposit that is being developed into a combined open-pit and underground mining operation. The development includes two open pits, being the smaller Tongqianshan pit and larger Niumatang Pit, as well as an underground operation that will be accessed through two shafts having an initial 355m depth and extending to a final depth of 600m. The project is currently at the end of its first phase of development, which primarily involves the development of open-pit infrastructure at the Tongqianshan open pit, ore processing facilities and underground ore transportation system. Skyland recently commenced mining from the Tongqianshan pit and processing operations.
Resources and Reserves
BD Asia identified the following skarn-type resources and reserves at the Jiama Property, as at June 30, 2010. The skarn-type resources are reported at a cut-off grade of 0.3% copper, 0.03% molybdenum, or 1% lead, or 1% zinc. Resources are inclusive of reserves.
Skarn-Type JORC Mineral Resource Category (1)
----------------------------------------------------------------------
Grade
------------------------------------------------------
Cu Mo Au Ag Pb Zn
Kt % % g/t g/t % %
----------------------------------------------------------------------
Measured Resource
----------------------------------------------------------------------
82,928 0.83 0.042 0.30 16.0 0.06 0.05
----------------------------------------------------------------------
Indicated Resource
----------------------------------------------------------------------
102,187 0.68 0.041 0.22 13.7 0.10 0.05
----------------------------------------------------------------------
Measured + Indicated Resource
----------------------------------------------------------------------
185,116 0.74 0.041 0.26 14.7 0.08 0.05
----------------------------------------------------------------------
Inferred Resource
----------------------------------------------------------------------
165,763 0.64 0.053 0.21 13.1 0.14 0.06
----------------------------------------------------------------------
----------------------------------------------------------------------
Contained Metals
------------------------------------------------------
Cu Mo Au Ag Pb Zn
Kt kt kt t t kt kt
----------------------------------------------------------------------
Measured Resource
----------------------------------------------------------------------
82,928 686.9 34.42 25.11 1,326 51.9 38.7
----------------------------------------------------------------------
Indicated Resource
----------------------------------------------------------------------
102,187 691.6 42.07 22.33 1,396 100.6 55.4
----------------------------------------------------------------------
Measured + Indicated Resource
----------------------------------------------------------------------
185,116 1,378.5 76.49 47.44 2,722 152.5 94.1
----------------------------------------------------------------------
Inferred Resource
----------------------------------------------------------------------
165,763 1,068.0 88.57 35.42 2,179 239.0 106.9
----------------------------------------------------------------------
(1) Mineral resources that are not mineral reserves do not have
demonstrated economic viability.
The estimate was prepared using Minesight computer mining software,
based on a database of 210 diamond drill holes with a total drilled
length of 69,029 meters, and 10 surface trenches with a total
length of 349 meters. The database contains 26,606 assay intervals.
Skarn-type ore reserve estimates were summarized based on the block/stope unit economic values calculated for the resource blocks within the final Tongqianshan pit and Niumatang pit designs and for stopes within the planned underground mining areas. The cutoff unit economic values used to separate ore and waste are listed below:
---------------------------------------------------------------------------
Cutoff Unit Economic Value for Reserve Estimation of the Jiama Project
---------------------------------------------------------------------------
Total Unit Ore Operating
Cutoff Unit Economic Cost In Project Financial
Area Value analysis
---------------------------------------------------------------------------
Tongqianshan Pit RMB276.5/t (US$40.78/t) RMB133.2/t (US$19.65/t)
---------------------------------------------------------------------------
Niumatang Pit RMB249.0/t (US$36.73/t) RMB128.9/t (US$19.01/t)
---------------------------------------------------------------------------
Underground (+4,600 m) RMB276.5/t (US$40.78/t) RMB201.0/t (US$29.65/t)
Sublevel Stoping
---------------------------------------------------------------------------
Underground (-4,600 m) RMB249.0/t (US$36.73/t) RMB201.0/t (US$29.65/t)
Panel Sublevel Stoping
---------------------------------------------------------------------------
Below are the estimated skarn-type ore reserves for the Jiama Property as at June 30, 2010.
Skarn-Type JORC Ore Reserve Category
----------------------------------------------------------------------
Grade
------------------------------------------------------
Cu Mo Au Ag Pb Zn
Kt % % g/t g/t % %
----------------------------------------------------------------------
Total Reserve: Proved
----------------------------------------------------------------------
53,541 0.83 0.038 0.32 16.3 0.06 0.04
----------------------------------------------------------------------
Total Reserve: Probable
----------------------------------------------------------------------
52,358 0.85 0.040 0.29 16.5 0.11 0.05
----------------------------------------------------------------------
Total
----------------------------------------------------------------------
105,899 0.84 0.039 0.31 16.4 0.08 0.05
----------------------------------------------------------------------
----------------------------------------------------------------------
Contained Metals
------------------------------------------------------
Cu Mo Au Ag Pb Zn
Kt kt kt t t kt kt
----------------------------------------------------------------------
Total Reserve: Proved
----------------------------------------------------------------------
53,541 442.8 20.31 17.1 874 29.6 21.3
----------------------------------------------------------------------
Total Reserve: Probable
----------------------------------------------------------------------
52,358 442.8 20.96 15.2 864 55.4 27.2
----------------------------------------------------------------------
Total
----------------------------------------------------------------------
105,899 885.6 41.27 32.3 1,728 85.0 48.6
----------------------------------------------------------------------
Mining and Production
Open pit mining will be conducted using hydraulic excavators loading onto 45t and 20t trucks. Underground mining will include open stope mining, with flatter, thick zones backfilled and steeply dipping zones not backfilled. These two mining methods will account for around 90% of the ore reserves. For zones where open stoping methods are not appropriate, room and pillar or shrinkage stoping mining methods are planned.
Skyland is developing the mining facilities in phases. Open pit mining at a rate of 3,000 tpd at Tongqianshan commenced in late July 2010, while open pit mining at an additional 6,000 tpd is scheduled to commence at Niumatang in early 2011. Underground mining is scheduled to commence, at an initial rate of 3,000 tpd, in 2012. The mine design contemplates installation of two 6,000 tpd processing plants. An initial plant has been installed, and is in operation, while a second plant is scheduled for installation in 2011 with full operation in late 2011 or possibly early 2012. Once both plants are fully operational, production is scheduled to amount to 12,000 tpd (3.6 million tpa).
Production will consist of copper concentrate, molybdenum concentrate and lead concentrate. Gold and silver will be separated and smelted in downstream processing.
According to BD Asia's review, the currently defined skarn-type reserves of the Jiama Mine are expected to support approximately 30 years of mine production based on an assumed production rate of 12,000 tpd (3.6 million tpa).
Operating and Capital Costs
BD Asia calculated an overall unit cost for mine operations at US$24.82 to US$34.57 with a life of mine average at US$29.60 and unit production cost (which includes total unit cost for mine operations, unit depreciation and amortization costs) of US$31.99 to US$50.04 per tonne of processed ore with a life of mine average at US$35.28 per tonne of processed ore. BD Asia also calculated a copper equivalent.(1) production in concentrate for the project based on metal in annual concentrate sales prices (excluding VAT). This calculation resulted in estimates of CuEq in annual concentrate production amounting to between approximately 28,000 to 50,000 tonnes,CuEq operating costs ranging from approximately US$2,000 to US$4,000 per tonne and CuEq production costs ranging from approximately US$2,500 to US$4,500 per tonne.
(1) Cu Eq (t) = Cu (t) + Mo (t) x 256,410.26/42,115.39 + Pb (t) x 10,683.76/42,115.39 + Au (g) x 166/42,539 + Ag (kg) x 2,318.38/42,115.39
Total capital costs are estimated at approximately US$400,000,000 to bring the project to 12,000 tpd of production. To date, approximately 56% of the capital costs have been expended, with an additional approximately US$170,000,000 to be expended in the balance of 2010 through to 2012. The mine plan estimates further sustaining capital expenditures will be required through the life of mine amounting to approximately US$230,000,000.
Economic Analysis
BD Asia completed an economic analysis of the mining operation based on its reserves. BD Asia used copper, molybdenum, and lead prices that represent the actual average metal market prices for the last 3 to 5 years in China. Gold and silver prices are slightly higher than the past 3-year actual averages, but they represent the expectation for the long-term prices for these two metals. In addition to the metal prices, a copper concentrate transportation credit of RMB200/t (US$29.50/t) of copper metal contained in the copper concentrate was applied based on the preliminary current sales contract with a copper concentrate buyer.
---------------------------------------------------------------------------
Metal Prices Used for Base Case Economic Analysis for the Jiama Project
---------------------------------------------------------------------------
Metal with Metal in Concentrate Metal in Concentrate
VAT Price(1) with VAT Price without VAT Price
Metal ------------------- ---------------------- ------------------------
RMB US$ RMB US$ RMB US$
---------------------------------------------------------------------------
Copper 55,000/t 8,112.09/t 49,275/t 7,267.70/t 41,115.39/t 6,211.71/t
---------------------------------------------------------------------------
Molyb-
denum 300,000/t 44,247.79/t 256,410.26/t 37,818.62/t
---------------------------------------------------------------------------
Gold 200/g 917.51/oz 166/g 761.53/oz 166/g 761.53/oz
---------------------------------------------------------------------------
Silver 3,500/kg 16.06/oz 2,712.5/kg 12.44/oz 2,318.38/kg 10.64/oz
---------------------------------------------------------------------------
Lead 12,500/t 1,843.66/t 10,683.76/t 1,575.78/t
---------------------------------------------------------------------------
Note: (1) VAT is 17% for all metals except gold; gold sales are not subject
to VAT.
---------------------------------------------------------------------------
Under the base case analysis, revenue from metal sales amounts to between US$200 million to US$300 million per year once full phase 2 production is achieved, with after tax cash flow amounting to approximately US$100 million per year for most years, and with negative after tax cash flow recorded in 2010 when substantial capital programs are contemplated.
BD Asia adopted a discount rate of 9% for the net present value calculation. Based on these assumptions, BD Asia calculated the after tax net present value of the discounted cash flow at US$777.2 million. Payback of capital costs was estimated at 5.2 years starting from January 1, 2010.
Sensitivity analyses indicate that the NPV of the Jiama Project is very sensitive to variations in the metal prices and processing metal recoveries, moderately sensitive to variations in operating costs, and less sensitive to variations in capital costs.
Expansion Potential
The Company has identified Jiama as having significant expansion potential. This is evidenced by the large volume of inferred resources in the skarn-type resource estimates reported above, a separate, large inferred resource from a nearby hornfels-type resource estimate and geological and geophysical work that indicates the potential presence of an underlying porphyry zone.
Hornfels-type Resource Estimate
In addition to the skarn-type resource and reserve estimates reported above, B D Asia conducted an analysis of a large, lower grade hornfels-type copper-polymetallic deposit located above the skarn-type deposit at the Jiama property. Results of geological modeling show that the hornfels-type mineralization is likely to consist of a large, massive mineralized body, over 1,500 m long, up to 1,000 m wide and up to 820 m thick. In general, the upper portion of the mineralized body is copper rich, and the lower portion of the body is molybdenum rich. A total of 3,434 assay intervals with a total length of 6,017 m are located inside the defined hornfels-type mineralized envelopes for the Jiama Project. Therefore, the average assay interval length inside the hornfels-type mineralized envelopes is 1.75 m.
BD Asia estimated hornfels-type inferred resources of 655 million tonnes with average grades of 0.23% Cu, 0.045% Mo, 0.02 g/t Au and 1.17 g/t Ag and contained metal of 1,500,000 tonnes of Cu, 290,000 tonnes of Mo, 13 tonnes of Au and 770 tonnes of Ag. The cutoff grades used are 0.3% copper, or 0.03% molybdenum, or 1% lead, or 1% zinc. The resource estimate was identified by BD Asia as being at an early stage, and the Company cautions that mineral resources that are not mineral reserves do not have demonstrated economic viability.
Qualified Person:
Dr. Qingping Deng, C.P.G. of BD Asia prepared the NI 43-101 report for the Jiama Mine on which the technical information concerning the Jiama Mine in this press release is based and has supervised the scientific and technical information regarding the Jiama Project in this press release. Dr. Deng verified the data underlying the scientific and technical information contained in this press release, including relevant sampling, analytical and test data related to such information, in the course of preparing the technical report, which verification process included site visits and review and analysis of relevant source material. Dr. Deng is independent of the Company and China National Gold, applying the NI 43-101 tests.
About China Gold International Resources Corp. Ltd.:
China Gold International Resources Corp. Ltd. is a mining company whose principal property is the CSH Gold Mine. The Company began producing gold at the CSH Gold Mine in July 2007. The Company's shares are listed on the TSX under the symbol "CGG". China National Gold Group Corporation, a Chinese state-owned enterprise owns approximately 39% of China Gold International Resources Corp. Ltd. shares.
About China National Gold:
China National Gold is a state-owned enterprise, 100% held by the State Investment Commission of the State Council of China. China National Gold is the largest gold producer in China with annual production in 2009 of 89 tonnes. China National Gold's business covers exploration, mining, engineering, construction, gold smelting, refining, processing, and gold sales.
Forward-Looking Statements:
This news release contains "forward-looking statements" within the meaning of applicable securities laws, including statements relating to the proposed transaction and its terms, the growth and strategy of China Gold International following completion of the transaction, plans for further development of the Jiama project and the economic analysis regarding the Jiama project. Readers are cautioned not to place undue reliance on forward-looking statements. Actual results and developments may differ materially from those contemplated by these statements depending on, among other things, risks that the parties will not proceed with the proposed transaction, that the ultimate terms of the proposed transaction will differ from those that currently are contemplated, that the proposed transaction will not be successfully completed for any reason (including the failure to obtain the required financing or stock exchange approval), that development and production results at the Jiama Mine may not meet management's current expectations, China Gold International's ability to secure additional financing, changes in commodity prices and general market and economic conditions. The factors identified above are not intended to represent a complete list of the factors that could affect China Gold International. Although China Gold International has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The Company does not assume the obligation to revise or update any forward-looking information or statements, except as required by law.
The Toronto Stock Exchange has not yet reviewed and does not take responsibility for the adequacy or accuracy of the content of this news release.
Frank Lagiglia China Gold International Resources Corp. Ltd. Investor Relations Manager +1.604.695.5032 info@chinagoldintl.com www.chinagoldintl.com
Source: Marketwire Canada (August 30, 2010 - 10:31 AM EDT)
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