Drive for half an hour southwest of Guangzhou — China’s fourth largest city of 13 million people across the border from Hong Kong — and you’ll come across Minco Gold‘s (MMM-T, MGH-X) Changkeng gold project.
Based on diamond drill data from 81 drill holes and 13 surface trenches, the Canadian junior is reporting an indicated resource of 2.1 million tonnes grading 5.61 grams gold per tonne for a total of 379,000 oz. gold.
The initial resource estimate also indicates an inferred resource of 2.2 million tonnes grading 4.82 grams gold for a total of 333,400 oz. gold.
The resource estimate was defined using approximate 24-month trailing average metal prices of US$650 per oz. gold and US$12.50 per oz. silver.
Cost estimates came in at a total of US$30 per tonne, based on a process recovery of 95% for gold and 90% for silver at a cut-off grade of 1.50 grams per tonne gold equivalent.
Under its joint-venture agreement, Minco has the right to earn a 51% equity stake in the project.
Beneath the Changkeng gold dominant zones are silver dominant zones that form part of the Fuwan silver deposit and are geologically distinct from the gold dominant zones.
The 51% interest Minco Gold held in the silver dominant zones on the Changkeng exploration license were assigned to Minco Silver in 2004.
The Changkeng-Fuwan gold and silver deposits lie within the Sanzhou basin a triangular Upper Paleozoic fault-bounded basin.
The Changkeng gold mineralization occurs as lenses of brecciated and silicified Triassic clastic rock.
Two gold-bearing zones are exposed at surface and merge at depth and along strike to the northeast. The deposit is open to the east, south, and down-dip from the outcropping mineralization.
At mid-day in Toronto, Minco was trading down 1 to $1.36 on a trading volume of 28,980.
Minco has 42.9 million shares outstanding and a 52-week trading range of 67 to $2.18.
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