Partners Southwestern Gold (SWG-T) and Global-Pacific Minerals (CPJ-V) plan to form a joint-venture with the Ministry of Geology and Mineral Resources of Heilongjiang province to explore four areas in northeastern China.
The agreement covers a 15,000-sq.-km land package situated 1,400 km northeast of Beijing. The region covered by the agreement is within the largest known alluvial gold area of China, with past production and known resources estimated to total 11 million oz.
The partners say little exploration work has been carried out to find the source of the alluvial gold, though reconnaissance geochemistry has defined numerous targets within zones related to Hercynian granites intruding sediments.
The joint venture’s land package surrounds (but does not include) two known deposits; Du Boa Shan, a porphyry copper-gold deposit with proven reserves of 650 million tonnes grading 0.47% copper and 0.16 gram gold per tonne; and the Tuanjigou gold deposit, where reserves are estimated at 20 million tonnes grading 6 grams gold.
Work to date has defined a large copper-gold soil anomaly and four gold anomalies on the joint-venture lands. A program of gridding and mapping is planned, along with geochemical and geophysical surveys. Drilling will follow.
The agreement calls for Southwestern and Global to make an initial payment of US$100,000 on signing of a formal joint venture and spend US$2.4 million on exploration. At this point, the partners would have earned a 50% interest, to be shared 70% by Southwestern and 30% by Global.
The juniors can earn a further 30% by producing a bankable feasibility study on one deposit. Once the 80% is earned, Southwestern will have a 56% working interest and Global a 24% working interest in the foreign joint-venture company.
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