Vancouver — A new estimate for the 217 deposit, in the Inner Mongolia region of northern China, has boosted the project’s gold resource.
GeoSystems International tabled the NI 43-101-compliant estimate, which is based on a cutoff grade of 0.5 gram gold and a gold price of US$400 per oz.
Jinshan Gold began pilot mining at the open-pit operation in 2004. So far, about 100,000 tonnes of oxide mineralized material have been extracted for heap-leach and bulk-tonnage processing, which will begin in mid-2005. The pilot plant consists of a 1,000-tonne-per-day crusher-and-conveyor system, which will deliver ore to two 50,000-tonne leach pads. Trial leaching will test both run-of-mine and single-stage crushed ore. As well, a 250-metre decline is being constructed to provide access to deeper, sulphide mineralization for testing.
The 217 project is in 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 oz.) and Sukhoi Log (40 million oz.).
The 217 deposit is in 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: Northeast, Southwest and Central. Drilling has primarily focused on the Northeast and Southwest zones, with more than 20,000 metres completed to date.
Jinshan Gold has earned a 55% interest in the project from Chinese partner Brigade 217. An additional 41.5% can be acquired by making staged payments totalling $750,000 over three years. Brigade 217 is entitled to further payments totalling $2 million upon mine site construction and startup.
Jinshan’s 38.6% shareholder,
With 48.5 million shares outstanding, Jinshan sports a $39-million market capitalization at its recent trading level of 80 per share.
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