GLOBAL SEARCH FOR GOLD — Junior explorers pin hopes on northern China — Southwestern Gold and Global-Pacific searching for gold

Partners Southwestern Gold (SWG-T) and Global-Pacific Minerals (GPJ-V) have agreed to explore a large land package in the southern part of China’s Inner Mongolia Plateau.

The companies signed their agreement with a subsidiary of the Inner Mongolia Geological Exploration Bureau of the China National Nonferrous Metals Industry Corporation. A company called Mongolia Huadi Mining is being set up to operate the joint venture.

The agreement allows the partners to explore 1,345 sq. km of exploration permits. The easily accessible desert region is 650 km north of Beijing.

Approvals are expected shortly for a further 800 sq. km of permits.

Southwestern and Global can jointly earn an 80% interest in the project by spending US$2.8 million on exploration over four years. Once this is earned, Southwestern will have a 58% working interest and Global-Pacific a 24% working interest in the joint venture.

The land package is in the main gold belt that crosses Inner Mongolia. The belt is defined by a folded sequence of Proterozoic metasediments intruded by granitoids and is believed to be geologically similar to the Tian Shan gold belt in the former Soviet Union.

The permits contain numerous gold occurrences and widespread placer deposits that have not been explored using modern methods. Work to date has identified several targets prospective for bulk-tonnage gold deposits.

The main target is a belt of carbonaceous metasediments and deformed granitoids on the southern margin of a granite batholith. Four gold prospects in this zone are reported to have a total strike length of 18 km.

Initial trench sampling of one of these prospects returned grades of 1.14 grams gold per tonne over a width of 68 metres, including 18 metres of 2.2 grams gold. Farther west along the same belt, grades of up to 5 grams over 5 to 15 metres have been obtained. The companies note that each of the four gold targets shows evidence of small-scale mining and alluvial operations by locals.

The three remaining target areas have similar settings and evidence of small-scale hard-rock and alluvial mining.

The partners have carried out reconnaissance and detailed mapping, structural studies, geochemical and geophysical surveys, and prospect trenching. Currently, they are busy defining drill targets.

Elsewhere in China, Southwestern and Global-Pacific have signed final agreements allowing them to explore a large land package in Heilongjiang province. The permitted area covers four blocks totalling 4,000 sq. km and includes numerous gold prospects.

The companies say the region is underlain by metasediments and granitoids, which represent the two most gold-productive associations in eastern Asia.

The joint-venture ground is the source for most of the province’s placer gold deposits. Past production and known resouces are estimated to exceed 11 million oz. gold.

One of the concessions is near a porphyry copper-gold deposit, though gold is the main commodity of interest on the combined land package.

The local partner is a subsidiary of the Ministry of Geology and Mineral Resources. The joint venture will be operated by Black Dragon Mining.

The area of interest is accessible and situated 1,400 km northeast of Beijing. All the selected areas have been approved and are being transferred to the joint venture.

Southwestern and Global-Pacific can jointly earn a 70% interest in the project by spending US$2.5 million over the next three years. An additional 10% stake can be acquired by funding a feasibility study on any one deposit.

Once an 80% interest is earned, Southwestern will have a 56% working interest in the joint-venture company, whereas Global-Pacific will have 24%.