1 Million Ounce Gold Resource
Location
The Changkeng gold deposit is located approximately 45 km southwest of Guangzhou, the fourth largest city in China with 13 million people and the capital city of Guangdong Province. The project is adjacent to Minco Silver Corporation's world-class Fuwan Silver deposit and situated close to well established water, power, and transportation infrastructure.
Work Program
- 12,000 metres of drilling completed in 2008.
- Updated Resource Estimate completed.
- Preparation & submission of the National Exploration Report.
Ownership
Guangzhou Minzhong Mining Co., Ltd. ("Minzhong") owns a 100% interest in the Changkeng Exploration Permit and is a cooperative joint-venture established among Minco Mining (China) Co., Ltd. ("Minco China"), Guangdong Geological Exploration Corporation ("GGEC"), and two private Chinese companies to jointly explore and develop the Changkeng Gold Property.
Under the terms of the agreement, Minco China, a wholly owned subsidiary of Minco Gold, has earned a 51% equity interest in Minzhong.
Background
Gold was discovered at Changkeng in early 1990 by systematic follow up of stream sediment and soil geochemical anomalies identified from surveys completed by the Guangdong Provincial government. Illegal, small scale mining began in 1991 and removed most of the oxidized, near surface mineralization.
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Based on 13 surface trenches and 81 diamond drill holes, P&E Mining Consultants Inc. ("P&E") of Brampton, Ontario, prepared an initial NI 43-101 compliant resource estimate on the deposit in March of 2008. The Company then conducted a comprehensive exploration program on the project including approximately 12,000 metres of combined step out and in-fill diamond drilling in 61 holes. The updated (March 25, 2009) detailed resource estimate is provided below.
Geology and Mineralization
The Changkeng-Fuwan gold and silver deposits occur within the Sanzhou basin, which is a triangular-shaped, Upper Paleozoic fault-bounded basin. Upper Paleozoic and Mesozoic sedimentary units are folded into an open syncline with a northeast-trending axis. A shallow dipping fault zone developed near the unconformity separating Lower Carboniferous limestone and Upper Triassic clastic sedimentary units hosts the gold and silver deposits at Changkeng and Fuwan.
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The Changkeng gold mineralization occurs as lenses of brecciated and silicified Triassic clastic rock associated with barite, fluorite, carbonate, and pyrite. Three gold-bearing mineralized zones exist: zone CK1 has a strike length of 750 metres; zone CK2 has a strike length of 1010 metres; and zone CK3 has a strike length of 310 metres.
Resource Estimate
An updated independent resource estimate was calculated by P&E Mining Consultants and released on March 25, 2009. The estimate contains indicated gold ("Au") resources of 4.0 million tonnes @ 4.89 g/t Au for a total of 623,100 oz Au and inferred resources of 4.0 million tonnes @ 3.01 g/t Au for a total of 386,800 oz Au.
Diamond drill data from a total of 127 drill holes and 13 surface trenches were used for the resource calculation of which 59 are new holes completed in 2008. The drilling to date was conducted on an approximate 40 metre section spacing with holes on section between 20 metres to 80 metres apart. Drilling prior to 2007 was undertaken by the Chinese Government 757 Exploration Team. Grade interpolation was undertaken with the inverse distance squared estimation method.
Table 1: Changkeng Gold Deposit Resource Estimate
1 @ 1.2 g/t AuEq* Cut-Off Grade.
| Classification |
Tonnes |
Au
(g/t) |
Au
(oz) |
Ag
(g/t) |
Ag
(oz) |
AuEq *
(g/t) |
AuEq *
(oz) |
| Indicated |
3,961,000 |
4.89 |
623,100 |
11.2 |
1,423,000 |
5.08 |
646,800 |
| Inferred2 |
4,001,000 |
3.01 |
386,800 |
9.5 |
1,218,000 |
3.16 |
407,000 |
* The AuEq grade was calculated from metal prices of US$800/oz Au and US$14/oz Ag with respective recoveries of 95% and 90%. The calculated Au:Ag ratio was 60:1.
- Mineral resources which are not mineral reserves do not have demonstrated economic viability. The estimate of mineral resources may be materially affected by environmental, permitting, legal, title, taxation, sociopolitical, marketing, or other relevant issues.
- The quantity and grade of reported inferred resources in this estimation are conceptual in nature and there has been insufficient exploration to define these inferred resources as an indicated or measured mineral resource and it is uncertain if further exploration will result in upgrading them to an indicated or measured mineral resource category.
The
Table 1 Changkeng gold resource was defined using approximate January 31, 2009 24-month trailing average metal prices of US$800/oz Au and US$14/oz Ag. Costs of US$12/tonne for mining, US$13/tonne for processing/tailings management, and US$5/tonne for G&A for a total of US$30/tonne and a process recovery of 95% for Au and 90% for Ag yield a cut-off grade of 1.2 g/t AuEq.
The mineral resources were estimated using the Canadian Institute of Mining, Metallurgy and Petroleum (CIM), CIM Standards on Mineral Resources and Reserves, Definitions and Guidelines prepared by the CIM Standing Committee on Reserve Definitions and adopted by CIM Council December 11, 2005.
Drilling Hole Maps
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