) click to enlarge |
The Chang Shan Hao Gold Mine (CSH Mine) is one of China's largest gold mines, placing China Gold International Resources Corp Ltd in an important leadership role. The gold mine is the first step in China Gold International Resource Corp Ltd growth strategy to becoming a globally significant gold producer.
The company commenced pre-commercial production in July 2007 and commercial production in July 2008. The total commercial production in 2008 was approximately 33,671 ounces of gold. The total commercial production in 2009 was approximately 83,570 ounces. The total production in 2010 was approximately 111,000 ounces of gold.
The CSH mining operations also completed the installation of a 30,000 ton of ore per day crusher. The installation and testing of the crusher were completed in quarter one of 2010. Currently 30,000 tons per day of sulphide ore are crushed to P80-9mm. Measured and indicated resources for China Gold International Resources Corp Ltd are at 4.99 million ounces with a cut-off grade at 0.30g/t.
Mineral Reserves
An updated mine plan for the CSH Gold Project has been developed by Nilsson Mine Services (NMS) of Vancouver, British Columbia, Canada. This plan has been prepared for heap leaching with a crushing plant throughput rate of 30,000 tonnes per day, with full capacity expected by the end of the first quarter of 2010. Mineral reserves have been reported for the final pit designs at a positive net value cutoff that corresponds to a gold grade cutoff of approximately 0.3 grams per tonne gold as scheduled in the mine plan. The proven and probable reserves at CSH mine as of December 31, 2009 stand at approximately 138 million tonnes of ore with an average grade of 0.67 g/t gold, representing approximately 3.0 million ounces of contained gold. In the previous March 2008 ITR, the company reported 99 million tonnes of reserves at an average grade of 0.71 g/t gold, consisting of 35 million tonnes of proven reserves averaging 0.74g/t gold and 64 million tonnes of probable reserves averaging 0.69 g/t gold at 0.28 g/t gold cut-off grade. The new reserves are summarized below:
CSH 217 Reserves by category, Northeast and Southwest pits combined December 2009
Category |
Cutoff Au (g/t) |
Ore (M tonnes) |
Cutoff Au (g/t) |
Contained Au (kOz) |
Contained Au (kgs) |
Proven |
0.30 |
83.6 |
0.70 |
1,868 |
58,100 |
Provable |
0.30 |
55.2 |
0.64 |
1,133 |
35,240 |
Total |
0.30 |
138.8 |
0.67 |
3,001 |
93,340 |
Resource Estimate
The new CSH 217 resource estimate was prepared by Mario Rossi, M.Sc., Min.Eng., of Geosystems International Inc. The 2008 drilling campaign added significant tonnages above cutoff and also improved the grade, partly due to the confirmation of grades and upgrade in resource classification down-dip and laterally. The CSH deposit in the Southwest (SW) area is now well delineated, and still significant potential exists for down-dip extensions to the mineralization. Mineralization at depth in the Northeast (NE) has been confirmed, with increases in both tonnages and confidence.
At the end of December 2009, the project's Measured and Indicated Gold Resources, using 0.3 g/t Au cut-off grade, stand at 243 million tonnes averaging 0.64 grams per tonne (g/t) gold. This translates into 4.99 million ounces of gold (inclusive of reserves) in the deposit after two and half years mining. In the previous March 2008 ITR, 183 million tonnes of Measured and Indicated resources average 0.69 g/t gold were reported with the same 0.30 g/t gold cut-off grade. Details of the new resources are summarized in the news release on March.04th 2010.
Project Economics
According to the new mine plan, the CSH 217 mine life is extended from 2018 to 2023 with four more years of leaching afterwards. Prior to installation of the crushing facility, the CSH mine experienced low and slow gold recoveries for various reasons, among which, the ore in the lower portions of the categorized weathered zones was actually mixed oxide and sulphide ore with low leaching recovery when not crushed. In addition, Run-of-Mine (ROM) ore size has been difficult to control. By the end of 2009, approximately 20 million tonnes of ROM ore were put under leach. The observed recovery from this uncrushed ROM material based on gold poured has been 37.3%. It is estimated that the ultimate recovery rate for the uncrushed ROM ore already on pad will be over 53%. With the new crushers having achieved design capacity of 30,000 tpd, it is expected that the gold recovery will be greatly improved. According to the column test done by Metcon Research of KDE in 2009, the recovery rate for the crushed ore is a function of the ore grade. The higher the ore grade the higher the recovery rate, which ranges from the lowest of 62.1% in the SW pit to the highest of 80.9% in the NE pit. According to the new mine production plan, approximately 2.35 million ounces of gold will be produced in the next 15 years starting with annual production of approximately 132,000 ounces in 2010, and gradually increasing to over 150,000 ounces in 2014 and then to over 200,000 ounces in 2021.
In the previous technical report released in March 2008, a 600 US dollar per ounce gold price was used to estimate the project economics and the Pre-Income Tax NPV was only US$87 million at 10% discount. In the estimate, the base gold prices for the next 5 years used are $1,032 per ounce, $1,033 per ounce, $955 per ounce, $970 per ounce and $849 per ounce corresponding to the years of 2010, 2011, 2012, 2013 and 2014 respectively. For long-term gold price after 2014, $849 is used as the long-term gold price estimate. Using the new gold prices, the project Pre-Income Tax Net Present Value (NPV) as of the end of December 2009 at a 9% discount rate, stands at US$ 517 million at the exchange rate of one US dollar to 6.83 RMB yuan. Gold prices and recovery rate are still the two most sensitive factors for the project economics.
Exploration
Currently China Gold International Resources Corp Ltd has initiated a new drill program at its CSH 217 gold mine in Inner Mongolia, China. The company has engaged a third party (Sinorex Drilling (Beijing) Co., Ltd) as its drill contractor. The new exploration program consists of 4,500 meters of diamond drilling and 2,000 cubic meters of surface trenching with a budget at 4.86 million RMB Yuan (USD$712,000). The program is focused on two targets: one is to test the mineralization at depth in both the NE deposit and SW deposit and the other is to test a possible new zone of mineralization to the north of the SW deposit.
Based on all previous drilling, the gold mineralization at the CSH mine is fully open at depth and in places the gold grade tends to increase down dip. Significant potential exists for down-dip extensions to the mineralization. The other target is located about 300 meters north of the SW zone, and has been designated the NW Zone. This zone is outside the current Mining Permit, but still within the company's existing Exploration Permit. No drilling has been done in the NW Zone, but some trenching was done by the company's Chinese JV partner in 2000.The current work program including surface trenching and diamond drilling will confirm the existence and extent of the NW zone gold mineralization. Drill results are expected in the fall of 2010.
A total of 8 holes, (4187.57 meters) of diamond drilling were completed in 2010 including 6 holes (3428.29 meters) drilled to test for higher grade mineralization at depth, and 2 holes (759.28 meters) drilled to test the surface trenching intercepts of a new NW zone of gold mineralization discovered on the Company's contiguous exploration permit.
Highlights of the 2010 exploration program include intercepts of 144.50 meters grading 0.92 grams per tonne (g/t) gold in hole DDH101-1,134.30 meters grading 0.68 grams per tonne (g/t) gold in hole DDH9950-00, 14 meters grading 4.26 grams per tonne (g/t) gold in trench TC4 and 28 meters grading 0.34 grams per tonne (g/t) in trench TC2. Although the two holes drilled below the above two trenches failed to intercept significant gold mineralization, anomalous gold values were discovered and further drilling is planned for next field season to fully evaluate the potential for the NW zone.
The following is a briefly summary of the 2010 drilling and trenching results:
Table 1: Gold intercepts from 6 diamond drill holes in the permitted mining area:
| Location | Drill Hole | From (m) | To (m) | Interval (m) |
Gold (g/t) |
|---|---|---|---|---|---|
| SW Pit | DDH77-1 |
243.2 |
258 |
14.8 |
0.59 |
(including) |
251.25 |
256 |
4.75 |
1.13 |
|
268.4 |
332 |
63.6 |
0.49 |
||
DDH79-1 |
278 |
297.8 |
19.8 |
0.42 |
|
303 |
368 |
65 |
0.52 |
||
(including) |
314.4 |
325.3 |
10.9 |
1.07 |
|
374.5 |
390.1 |
15.6 |
0.67 |
||
| NE Pit | DDH9950-1 |
515.8 |
537.9 |
22.1 |
0.42 |
544.7 |
603.5 |
58.8 |
0.59 |
||
609.1 |
613 |
3.9 |
1.03 |
||
620 |
754.3 |
134.3 |
0.68 |
||
(including) |
620 |
641.5 |
21.5 |
1.09 |
|
DDH101-1 |
195.5 |
232 |
36.5 |
0.54 |
|
243.8 |
253.7 |
9.9 |
0.64 |
||
268.6 |
413.1 |
144.5 |
0.92 |
||
(including) |
309 |
378 |
69 |
1.43 |
|
DDH103-1 |
229 |
264.12 |
17.12 |
0.36 |
|
409 |
441.6 |
32.6 |
0.85 |
||
447.64 |
547 |
99.36 |
0.69 |
||
553.5 |
566 |
12.5 |
0.35 |
||
DDH105-1 |
366.4 |
470.6 |
104.2 |
0.35 |
Notes:
- All grades reported are "length weighted averages" (LWA) of individual samples.
- The intervals are a drill intercept widths, while the true widths of the intervals are unknown.
| Trench | From (m) | To (m) | Interval (m) | Gold (g/t) |
|---|---|---|---|---|
| TC2 | 67.00 | 95.00 | 28.00 | 0.34 |
| (including) | 75.00 | 90.00 | 15.00 | 0.50 |
| TC4 | 57.00 | 71.00 | 14.00 | 4.26 |
| 258.00 | 268.00 | 10.00 | 0.29 |
Notes:
- All grades reported are "length weighted averages" (LWA) of individual samples.
Mario Rossi, M.Sc., Min. Eng., of Geosystems International Inc., an Independent Qualified Person as defined by National Instrument 43-101 has reviewed the drill program, supervised the preparation of the scientific and technical information and verified the data supporting such scientific and technical information contained in this news release.
Throughput Expansion Update Internal Technical Report and Independent Technical Report
The updated mine plan, resource and reserve estimate on the CSH217 project are based on a report compiled by KD Engineering. Behre Dolbear Asia, Inc. (BDASIA) has been conducting an independent technical review of the CSH217 project, including the recent resource/reserve estimates and metallurgical testing, and a technical report titled "Independent Technical Report on the Chang Shan Hao Gold Mine in Inner Mongolia Autonomous Region, the People's Republic of China".
Qualified Persons
Mario Rossi, M.Sc., Min.Eng., of Geosystems International Inc. is an Independent Qualified Person as defined by National Instrument 43-101 and is responsible for the CSH 217 resource estimates. Mr. Rossi last visited the CSH 217 site in January 2009. Mr. John W. Nilsson, M. Sc., P. Eng., of Nilsson Mine Services Limited, is an Independent Qualified Person as defined by National Instrument 43-101 and is responsible for the CSH 217 mine design and reserve estimate, and visited the property during the period 19 through 26 September 2009. Mr. Joseph Keane, P. Eng., of KD Engineering (KDE) of Tucson, Arizona is an Independent Qualified Person as defined by National Instrument 43-101 and is responsible for the metallurgical testing and mineral processing portions and is the leading QP for the updated mine plan and reserve estimate. He has visited the CSH mine site several times with the most recent trip in September 2009. Dr. Qingping Deng, Ph.D., CPG., President of Behre Dolbear Asia, Inc. is an Independent Qualified Person as defined by National Instrument 43-101 and is responsible for reviewing the CSH 217 project and preparation of the BDASIA technical report to be filed, who has visited the project several times in 2009 with the most recent trip in late October 2009. The QP's have supervised the preparation of the scientific and technical information.
Technical Reports
Independent Technical Report on the CSH Gold Mine
Photos
|
|
|
||||||||||||||||||||||||||||||
|
|
|
||||||||||||||||||||||||||||||
|
|
|
||||||||||||||||||||||||||||||
)
)
)
)
)
)
)
)
)
 |
Windows Media Player is required to view the video/audio clips. You may download the free player (Windows Media Player) from Microsoft's web site. |