China Clipper signs deal in central China

Ottawa-based China Clipper Gold Mines (CXX-A) will gain interests in various projects in China’s Shaanxi province.

The interests are specified in a 3-component agreement signed by China Clipper and the government of Tongguan Cty.

* The company will gain a 55% stake in the Tongguan smelter by paying US$3 million, with an option to increase this to 70%. Concentrate grades from Tongguan-area mines average 35 grams gold per tonne, and daily capacity is being upgraded to 50 from 20 tonnes.

* The company will acquire a 60% stake in the Lijia mine by spending US$6 million over four years on exploration and mine development in the surrounding area, known as Eight Kilometre. The area comprises 14 sq. km in the Little Qinling gold belt, where at least 34 mineralized quartz veins have been outlined by past exploration.

China Clipper is also required to spend US$4 million to upgrade the daily milling capacity at Lijia to 450 from 130 tonnes.

* The Tongguan County Gold Company, owned by the local government, has offered China Clipper a 49% joint-venture interest in three of its producing mines, in return for spending commitments of US$2 million. By spending an additional US$1 million, China Clipper can increase its interest to 75%.

In related developments, the Beijing Corporation for International Economic Cooperation (BIECO) has entered into a private placement with China Clipper for 162,000 shares at $1.25 each for a total of more than $200,000. BIECO may assist China Clipper in its mine expansion programs.

BIECO, a trading organization under the jurisdiction of Beijing’s municipal government, was established in 1982 and now has offices in 17 countries.

Revenue for 1996 totalled $80 million.

In other news, the joint venture in the Beijing area between China Clipper and Minco Mining & Metals (MMM-V) has been terminated. China Clipper will sell its interests in the Emperor’s Delight, Stone Lake and Crystal Valley projects to Minco for $175,000.