China Gold International Resources (CGG-T) is working hard to impress the market with its Jiama copper mine in China, as
it boosts resources and looks to undergo a major mine expansion.
Formerly known as Jinshan Gold Mines, China Gold is 39.3%-held by state-owned China National Gold, the largest gold producer in China.
The company announced on Aug. 25 that it boosted resources at the Jiama mine, located in Tibet’s Gandise metallogenic belt, by more than 400%.
The mine now hosts 1 billion measured and indicated tonnes grading 0.41% copper and containing 4.08 million tonnes copper, a 443% increase from the previous 185.1 million measured and indicated tonnes of 0.74% copper for 1.38 million tonnes contained copper.
“The increase in resources and production at Jiama is one of the cornerstones underlying the significant organic growth in resources,” Xin Song, China Gold’s CEO, said in a press release.
The spike resulted from the infill 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 downdip.
Jiama also hosts 0.044% molybdenum, 5 grams silver per tonne 0.10 gram gold per tonne, 0.02% lead and 0.02% zinc in the measured and indicated category.
China Gold, which acquired the open-pit mine last December, is contemplating ramping up the 6,000-tonne-per-day throughput to 40,000 tonnes. The company is conducting a feasibility study on the major expansion, due in 2012 or earlier.
China Gold will use the improved resource estimate to design a new conceptual mine model and support its ongoing expansion feasibility.
The cash-rich company has budgeted US$5.6 million to drill 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,” Song said.
The company currently has US$300 million in hand.
Along with expanding resources, production and revenue, the company aims to be one of the most environmentally friendly mines in the world, Frank Lagiglia, the company’s investor relations representative, says.
He adds that the local community supports Jiama because the mine generates jobs and revenue for the region.
On the updated resource news, China Gold’s shares moved up 6% to $4.42.
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