MINERAL EXPLORATION — Minco explores Tian Shan properties in western China

Minco Mining & Metals (MMM-V) has been using a combination of hi-tech remote sensing and old-fashioned prospecting in its summer grassroots exploration program on its Tian Shan properties in northwestern China’s Xinjiang Uygur Autonomous Region.

The properties are situated on the eastern extension of the Tian Shan mineralized belt, which extends westward into Kyrgyzstan, Tajikistan and Uzbekistan, where such multi-million-ounce gold deposits as Kumtor, Kalmakyr, Kochbulak-Kyzylalmasai, Jilau and Muruntau are found.

In 1996, Minco entered into an agreement with the Xinjiang Bureau of the Ministry of Geology and Mineral Resources (MGMR-Xinjiang), giving the company the exclusive right to negotiate further and engage in joint-venture contracts relating to six licence areas in the Tian Shan. These areas total 36,240 sq.

km. and are named Yishijilike, Muzhate, Kushitai, Aikendaban, Wulansayi and Baluntai.

With the agreement, Minco can earn a 76% equity interest in the six projects by both funding exploration and completing a bankable feasibility study on one deposit. Minco is also providing project management and certain advanced equipment and technology.

For its 24% interest, MGMR-Xinjiang is releasing geological data collected to date and obtaining permits and licences.

Should any feasibility study be conducted, all subsequent capital requirements will be contributed at a rate of 81% for Minco and 19% for MGMR-Xinjiang in order to maintain their respective 76% and 24% equity interests in the joint venture.

.SLittle-explored

Within the six areas, Minco has chosen 11 properties covering 1,422 sq. km for more detailed work. Colin McAleenan, Minco’s vice-president of exploration, says the selections were based on data derived from a combination of MGMR’s regional geochemical and geological surveys complemented by satellite-derived alteration anomalies. He adds that the lack of geophysical data, particularly airborne work, is typical for western China, which remains relatively unexplored compared with the east.

Minco was not shown all the details of MGMR’s regional geochemical surveys but was shown the areas defined as anomalous. In certain areas, MGMR mapped in more detail, getting down to a 1:200,000 scale, but generally their surveys are at 1:500,000.

On the other hand, MGMR’s regional-scale geological mapping programs have typically been at a scale of 1:200,000, and, more rarely, at 1:50,000.

To add to that slim database, Minco acquired Landsat TM satellite data. The technology, previously unused in this part of the world, shows clay and iron oxide alteration anomalies that may be associated with gold deposits.

McAleenan says several new areas identified with the Landsat images had not been deemed anomalous by the geochemical or the geological surveys. However, initial checking by Minco of some of these anomalies has revealed the presence of iron-oxide weathered limestones, but little of any economic value.

“The Landsat technique has done its job in some areas,” says McAleenan. “In other areas there are some spurious anomalies, though this is to be expected.

The Landsat data are only as good as the information at the front end of the processing. If you know something about the geology and you incorporate that into the processing stage, you will get a more reliable product. If you don’t have any information going in, you’re taking it at face value and running the risk of generating spurious values based on certain rock types.” The Tian Shan area, with its lack of vegetative cover and its extensive outcropping or subcropping geology, lends itself to the use of this technology.

One drawback is that much of the Tian Shan can be snow-covered, so it is best to use Landsat data taken during the summer months, when the lower elevations are all free of snow.

.SLandsat imagery

For Xinjiang, Minco bought six Landsat scenes, each of which is representative of an area measuring 180 km by 180 km and costs between US$5,000 and US$6,000.

Some of the data were acquired in China at a lower cost than would be paid in the West.

The Chinese are at a disadvantage, however, when it comes to the next step of data analysis, being able only to produce false color images, which are used in geological interpretation.

Minco, which lacks the powerful computing facilities required to process its own data, contracts the work out to the Vancouver-based remote-sensing firm RGI Resource GIS & Imaging.

For this summer’s reconnaissance-level prospecting, the company has organized MGMR geologists to go into the field to work on Minco’s projects exclusively, using methodology laid down by Minco.

MGMR has a large network of geological teams across China, though the strength of the organization has waned in recent years as a result of spending cuts.

Within the Xinjiang bureau are a dozen geological teams that cover different parts of the province. Minco deals with two teams from the Xinjiang bureau.

The larger of the two has about 3,000 employees, consisting mostly of geologists, field technicians and support staff.

Minco has two of its own geologists based in Beijing (one a native Westerner, the other a Chinese-Canadian) who periodically travel to Xinjiang to supervise the field activities. As well, Minco brings over Western geologists on contract, as needed.

McAleenan says it is difficult to find and hire geologists who speak both Mandarin and English and have significant Western experience with an exploration or mining company.

.STraining programs

To compensate for this drawback, Minco has been training some of its Chinese staff to Western standards and, during the off-season, bringing them to the West.

For its assaying, which, at this level, entails mostly multi-element geochemical analyses, Minco uses labs in China and performs cross-checks, either within China itself or in the West.

“However,” says McAleenan, “when we have assays carrying significant values of gold and other metals, our experience has been that the Chinese labs tend to understate the grades rather than overstate them, and for some of those we will be checking carefully with Western laboratories.”

Minco already has results from some of the 11 areas, where geologists collected a large number of representative rock samples. “The results are spotty so far,” says McAleenan — “nothing you can get your teeth into.” Yet assays are pending for many areas, particularly the remote ones, and, by the beginning of October, Minco is expected to have most of its results back; the more encouraging ones will be followed up immediately with more focused programs of geochemistry and trenching before any drill targets can be generated for next season.

To aid in exploration, Minco sent Dr. Herwart Helmstaedt of Queen’s University in Kingston, Ont., to Tian Shan for several weeks during the summer. An authority on the western Tian Shan, Helmstaedt is compiling for Minco a report that will make general comparisons between the western Tian Shan and the Chinese portion.

“We’re looking for the bigger picture,” says McAleenan. “And now we’re in a position where we can bring information across the different borders.”

.SKyrgyzstani property.

In June, Minco acquired an 80% interest in a 1,800-sq.-km, gold- antimony prospect named Savoyardinskii, which is in the Karakuldzinskii region of southern Kyrgyzstan.

The property abuts the border with China and contains a 15-km strike extension of the same package of rocks that hosts the 1994 Chinese discovery at Sawayaerdun — a 3-million oz. gold deposit hosted by Upper Silurian carbonaceous clastic sediments.

Minco’s new joint-venture partners in Kyrgyzstan are Magko (an international joint-stock company based in Moscow) and the South Kyrgyzstani Geological Expedition, each of which holds a 10% interest in the property. The partners have been granted a renewable “licence for mineral-wealth usage rights” pertaining to the property.

Within the main boundaries of the Savoyardinskii property is a 2-sq.-km mining licence held by a Kyrgyzstani company (not by Minco) and which is centred on the Sav
oyardy deposit. The Savoyardy holds a resource of 5.5 million tonnes grading 7.4 grams gold per tonne (equivalent to 1.2 million contained ounces of gold) and 2.7 million tonnes grading 3.3% antimony. The structures hosting these resources strike to the northeast and southwest into Minco’s new property.

For the acquisition, Minco is paying a finder’s fee of US$35,000 and 35,000 shares. Following direct expenditures of US$1 million on the property, an additional 75,000 shares must be paid. Following aggregate expenditures of US$2 million on the property, a further 75,000 shares are payable.

At Savoyardinskii, Minco will soon be performing geophysical work in preparation for next season, when the company intends to launch a more extensive program patterned on the Chinese Tian Shan projects.

Based on regional geochemical surveys, Minco has also acquired properties in the West Kunlun region of Xinjiang, situated between China’s Tarim basin and Tajikistan, just off the China-Pakistan highway.

In this case, Minco’s partner is Xinhui, a subsidiary of the China National Non-Ferrous Metals Industry Corporation. Xinhui and Minco are following up on gold and copper geochemical anomalies discovered during last year’s regional geochemical survey.

Results from Minco’s geochemical surveying and geological prospecting on some of these anomalies are pending, and work is ongoing.