Jinshan Gold doubles 217 resource (March 07, 2005)

Vancouver — A new estimate on Jinshan Gold Mines’ (JIN-V) 217 gold deposit, located in the Inner Mongolia region of northern China, has significantly boosted the project’s gold resource.

The study increases measured and indicated resources by over 100%, to 83 million tonnes grading 0.82 grams gold per tonne (2.2 million oz. gold contained). Additionally, inferred resources have been bumped up to 37 million tonnes averaging 0.89 grams gold (1 million oz. gold contained). The NI43-101-compliant estimate, based on 2004 drilling, was conducted by engineering firm GeoSystems International using a 0.5 gram gold cut-off and a US$400 per ounce gold price.

In 2004, Jinshan Gold commenced an open-pit pilot-mining operation. About 100,000 tonnes of oxide mineralized material was extracted for heap-leach and bulk-tonnage trial processing, scheduled to commence in mid-2005. The pilot plant consists of a 1,000 tonne-per-day crusher and conveyor system that will deliver the ore material to two 50,000-tonne leach pads. Trial leaching will test both run-of-mine and single-stage crushed ore. Additionally, a 250-metre decline is being constructed to access the deeper, sulphide mineralization for testing.

The 217 gold project lies within the Tien Shan Gold Belt, which extends from northern China, through Mongolia and into Russia. The belt hosts some of the largest gold deposits in the world including Murantau (140-million ozs.) and Sukhoi Log (40-million ozs.).

The deposit is hosted within a package of sheared Proterozoic sediments in the south limb of a syncline. Gold mineralization is fine grained and generally emplaced with thin quartz-sulphide seams and stringers along bedding plane shears.

There are three mineralized zones at 217, the Northeast, Southwest and Central. Drilling has primarily focused on the Northeast and Southwest zones, with over 20,000 metres so far completed.

Jinshan Gold has earned a 55% interest in the project to date, from Chinese partner Brigade 217. An additional 41.5% can be acquired by making staged payments totaling $750,000 over three years. Brigade 217 is entitled to further payments totaling $2 million upon mine-site construction and commencement of operations.

Jinshan’s 38.6% shareholder Ivanhoe Mines (IVN-T) has elected to participate in the project on a 50-50 basis.

With 48.5 million shares outstanding, Jinshan sports a $39-million market capitalization at its recent trading level of 80 per share.