Resources jump 443% at China Gold’s Jiama

China Gold International (CGC-T) is working hard to impress the market with its Jiama copper polymetallic mine in Tibet as it boosts resources and looks to undergo a major mine expansion.

Formerly known as Jinshan Gold Mines, China Gold is 39.3%-controlled by state-owned China National Gold, the largest gold producer in China.

The company announced today that it boosted resources at the Jiama mine, situated in Tibet’s Gandise metallogenic belt, by more than 400%.

The mine now hosts 1 billion measured and indicated tons grading 0.41% copper containing 4.08 million tons copper, a 443% increase from the previous 185.1 million measured and indicated tons of 0.74% copper for 1.38 million tons of contained copper.

“The increase in resources and production at Jiama is one of the cornerstones underlying the significant organic growth in resources,” said Xin Song, China Gold’s CEO, in a press release.

The spike resulted from the in-fill and step out drilling that the company conducted last year to enhance Jiama’s inferred resources.

The updated resource is based on more than 120,000 metres of drilling in 300 holes on the project. The mineralized bodies at Jiama include: skarn, hornfels and porphyry. All three remain open along strike and down dip.

Jiama also hosts 0.044% molybdenum, 5 grams silver per ton, 0.10 gram gold per ton, 0.02% lead and 0.02% zinc in the measured and indicated category.  

China Gold, which acquired the open-pit mine in December 2010, is contemplating ramping up the 6,000-tonne-per-day throughput to 40,000 tonnes. Currently, the company is conducting a feasibility study on the major expansion, which is due in 2012, or earlier.

China Gold will use the updated resource to design a new conceptual mine model and in the ongoing expansion feasibility.

China Gold has budgeted US$5.6 million to punch 31, 200 metres in 56 diamond drill holes at the project this year. The drilling is expected to be completed by November, while initial results should be out by year end.

“We are excited to begin exploring a standalone gold deposit and other porphyry deposits within the Jiama deposit area in 2011,” said Song.

On the news, China Gold’s shares moved up 7% to $4.47.