Pacific Min advances 217

Vancouver — Pacific Minerals (PMZ-V) has launched a mine development scoping study for the 217 gold project in China’s Inner Mongolia region. The junior has hired the Chinese Design Institute to provide an independent assessment of the economic potential of the project and determine a range of capital and operating costs modelled on a 10,000-tonne-per-day open-pit mine.

Measured and indicated resources stand at 35 million tonnes grading 0.85 gram gold per tonne, equivalent to 953,000 contained ounces gold. The inferred resource is pegged at 85 million tonnes grading 0.93 gram gold, or 2.5 million oz. The in-pit measured and indicated resource, using a 2-to-1 stripping ratio and a cutoff grade of 0.5 gram gold, is 26.6 million tonnes grading 0.96 gram gold, with 11 million tonnes grading 1 gram gold in the inferred section.

SGS Lakefield Research Canada is testing the heap-leachability of the mineralization as part of the scoping study. Additional, bulk heap-leach tests will be conducted in China later this year to increase the level of confidence in gold recoveries. Preliminary metallurgical tests performed earlier this year by SGS Lakefield achieved overall gold extraction exceeding 95% for both the oxide and sulphide mineralization using gravity separation and cyanidation. The scoping study will determine the optimal processing method between heap leaching and conventional milling and flotation.

Assay results for the latest, 6,000-metre drilling program will be announced in mid-October.

Pacific Minerals has a 55% interest in the 217 project and can acquire a further 41.5% by making staged payments of US$2.75 million. Ivanhoe Mines (IVN-T) can acquire a 60% interest in the project by completing a production feasibility study by July 1, 2006, and maintaining the schedule of payments to the Chinese partner. Upon completion of the production feasibility study, Ivanhoe will have six months to acquire an additional 16.5% effective interest in the project by arranging financing on or before July 1, 2007, to take the property into production.