Minco Gold Corporation - QwikReport

MINCO GOLD CORPORATION : http://www.mincogold.com/ : QwikReport

White Silver Mountain Spin-Off

Location

The White Silver Mountain Project is located in Gansu Province close to the city of Baiyin, which serves as the operational base for the Baiyin Non-ferrous Metals Corporation (BNMC). Ore mined from the Baiyin district is treated at BNMC's milling and smelting facitities in Baiyin. BNMC also operates an aluminum smelter using concentrate shipped via rail to Baiyin. The city is connected to other major centres in China by a well developed highway and rail network, and has access to an abundant water supply through a pipeline from the Yellow River. An international airport is located 100 km south of the city near Lanzhou, the provincial capital.

Work Program

spin-off to Minco Base Metals Corporation fall 2007
resume drill programs once all permits and titles have been transferred
test depth extensions of the Xiaotieshan Mine (300 metres of underground drifting, development of four new drill stations, and 4,000 metres of drilling)
increase the resource potential of 3.5 million tonnes averaging 6.3% Pb, 10.3% Zn, 1.6% Cu, 3.8 g/t Au, and 148 g/t Ag (Teck Corporation)
enter commercial production (all mining and processing infrastructure is in place)

Ownership

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The Gansu Keyin Mining Co. Ltd (Keyin) is a fully licensed Sino-foreign joint venture company created in 1998 to hold the mineral interests of Minco and BNMC. Minco currently holds 61% interest in Keyin as a result of expenditures. Keyin controls 3 exploration licences totalling 18,949 ha covering the area beneath and immediately surrounding the past and present mine workings but does not include the mine workings themselves.

Background

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Baiyin rapidly grew into a major base metal producing district following its discovery by Chinese exploration teams in the late 1940's. The district is the host to 4 past and presently producing volcanogenic massive sulphide deposits (Table 1) and there are presently 2 active underground mining operations exploiting the depth extension of the Zheyaoshan deposit and the Xiaotieshan deposit.

Minco formed a joint venture with BNMC in 1997 to explore the area surrounding and beneath the known deposits. In 1998, Minco granted Teck Corporation (now Teck Cominco) an option to earn 70% of Minco's share of the Keyin joint venture. Teck Corporation contributed $2.3 million to exploration from 1998 to 2002, which was credited to Minco. During this period, 850m of underground development for drill access was completed at the Xiaotieshan mine and 17 intersections from the target horizon were obtained. The drilling program was successful in intersecting the downward extensions of ore lenses mined in the Xiaotieshan mine but the resource potential did not meet Teck Cominco's criteria and they withdrew from the joint venture in 2002.

Table 1. Tonnage and grade for the 4 major deposits in the Baiyin district

Note: Figures for Zheyaoshan, Houyanshan, and Tongchanggou are historical mined tonnages and grades and the figures for Xiaotieshan are mined plus remaining reserves. These estimates were made by BNMC (1999) and are not on Minco's property.

Geology and Mineralization

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The volcanogenic massive sulphide deposits in the Baiyin district are hosted in a Cambrian-Ordovician volcanic and volcaniclastic sequence. Mineralization and host rocks are comparable to Rio Tinto district in Spain or the Roseberry deposit in Tasmania, Australia. The deposits at Baiyin are developed at specific favourable horizons within the volcanic sequence and the largest deposit (Zheyaoshan) and third largest (Xiaotieshan) deposit occur along the same stratigraphic horizon. The volcanic sequence and the tabular ore lenses have been rotated into a near vertical orientation from deformation processes. Metamorphic events have moderately recrystallized ore zones resulting in coarse grained economic sulphide minerals that are amenable to conventional milling and concentrating techniques.

Much of Minco's past exploration effort was focused on testing for the depth extensions of ore zones presently being mined at Xiaotieshan. These efforts were influenced by a perceived westward plunge of the Xiaotieshan ore system. Subsequent interpretation from compilation of a large amount of historical exploration and production data highlighted a rich ore shoot with a vertical to slightly easterly plunge on the east side of the deposit. This ore shoot remains open at depth and to the east. Evaluation of a narrow but high grade intersection (XM1544-14) on the west side of the deposit suggests a possible re-appearance of massive sulphide along the Zheyaoshan-Xiaotieshan stratigraphic position. There are no drill holes located at the same depth and west of the Minco's holes.

Results

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Much of Minco's past exploration effort was focused on testing for the depth extensions of ore zones presently being mined at Xiaotieshan. These efforts were influenced by a perceived westward plunge of the Xiaotieshan ore system. Subsequent interpretation from compilation of a large amount of historical exploration and production data highlighted a rich ore shoot with a vertical to slightly easterly plunge on the east side of the deposit. This ore shoot remains open at depth and to the east.

Twenty underground diamond drill holes were completed for a total of 7,901.8 m from 1998 to 2001 on extensions of the massive sulphide lenses exploited in the Xiaotieshan mine. Comparison of the geology in holes XM1544-12, -16, and -17 with exposures in the Xiaotieshan mine suggests these holes may be located on the western edge of the eastern massive sulphide lobe.

Table 2. Significant intersections from the underground drilling program

Drilling conducted by Teck Corporation (now Teck Cominco Limited) from 1998 to 2001.

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This page was created on Thu Sep 9, 2010 at 6:55:17 AM Pacific Time.