The Qinling Mountains form the boundary between the North China and Tarim Cratons to the north and the Yangtze Craton and Tibetan Plateau to the south. The mountains consist of an east-west trending Upper Paleozoic-Mesozoic thin-skinned fold and thrust system formed by north-south compression. Devonian sedimentary formations consist of fine grained clastic sediments, calcareous sandstones, shales and various types of limestone. Younger Triassic assemblages consisting of sandstone, slate and limestones have been inserted into the Devonian section by complex, north verging thrust faulting. Younger Mesozoic calc-alkaline intrusions are common in an east-west trending belt in the northern part of the region. Precambrian intermediate to basic volcanics form the core of an anticlinorium which is exposed in the southern part of the area of interest.

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Yangshan Gold Belt - Longnan Project

Location

The Gansu Longnan Properties are located in Gansu Province, within the southwest Qinling gold field, in China.

The Longnan project has been divided into three sub-projects according to geographic distribution, type, and potential of mineralization:

1. Yangshan: including five exploration permits located in the northeast extension of the Yangshan gold belt and its adjacent area; potential for gold.
   
   Oujiba Map
   
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2. Yejiaba: including four exploration permits located to the north of the Yangshan exploration permits; potential for gold and antimony.
   
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3. Xicheng East: including three exploration permits to the east extension of the famous Xicheng Pb-Zn mineralization belt; potential for gold, silver, lead and zinc.

Work Program

All sub-project areas

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• Follow up on the regional stream sediment anomalies will be continued over all three sub-project areas

Yangshan sub-project area

• Mapping, sampling & trenching on top showings
• Geophysics (IP) program on Yangshanli for drill target definition

2009 Exploration

• Yejiaba Area

  Traversing, trenching and surface sampling were continued in Weiziping-Baimashi and Shajinba-Yangjiagou blocks.

  Yeijiaba Oct 2010 Click to Enlarge

  Several zones of multi-metal mineralization were discovered in the Shajinba during the 2009 exploration program which highlighted a +10 km hydrothermally altered structural zone along the regional unconformity. The width of the mineralized zone varies from 5 to 25 metres. In the southwest portion of the structural trend poly-metallic (iron - silver - lead - zinc) mineralization is located in the hanging wall while the gold mineralization is located in the footwall in the northeast portion of the structural trend.

  In the Shajinba area, a large poly-metallic mineralized zone 5 to 25 metres in width was identified during the 2009 exploration program which consisted of traversing and trenching. The regional unconformity divides massive hanging wall limestone with the heavily folded thin-bedded footwall limestone which are intruded by highly altered dykes. High contents of iron, silver, lead and zinc are characteristic for this style of mineralization in the Shajinba area.

  Channel Sample Results completed are as follows:

  Sample No.	Width (m)	Average Grade				Alteration
  		Ag(g/t)	Pb(%)	Zn(%)	Fe(%)
  YJB-09-2250 to YJB-09-2252	2.3m	89.00	0.27	0.01	-	Silicification with limonite and antimonite
  YJB-09-2269 to YJB-09-2279	11.0m	4.24	5.09	0.65	29.5	Silicification with hematite, pyrolusite
  YJB-09-2430	1.1m	71.0	0.14	0.004	-	Silicification
  YJB-09-2487 to YJB-09-2494	8.0m	102.8	0.15	0.17	26.1	Silicification with hematite, pyrolusite
  YJB-09-2561 to YJB-09-2563	3.0m	117.9	0.55	0.18	31.5	Silicification with hematite, pyrolusite
  YJB-09-2585 to YJB-09-2589	5.0m	100.2	1.25	0.11	46.6	Silicification with hematite, pyrolusite
  YJB-09-2631 to YJB-09-2632	2.0m	169.7	1.15	0.32	41.5	Silicification with hematite, pyrolusite

• Yangshan Area

  Traversing and trenching were continued in Jiangjiashan-Henjiawan and Oujiaba-Dianziping blocks. Amount of work completed is as follows: trenching - 167.0 km, trenching - 971.9 lineal m, channel sampling - 387 samples, chip sampling - 253 samples, grab sampling - 428 samples.

• OUJIABA Area

  The Oujiaba property, located 25 kilometres east of the Anba gold deposit, is part of the Company's 100% owned Longnan Project which is located within the Yangshan Gold Belt

  In 2009, Minco Gold discovered a large gold zone on its 100% owned Oujiaba property, within the Yangshan Gold Belt, Gansu Province P.R.C. The discovery has been traced for approximately 6 kilometres and has the same host lithologies as the Anba gold deposit. The Anba deposit is considered to be a Carlin-type gold deposit and the Anba deposit is estimated to have over 10 million oz Au.

  Continuous channel samples were taken in 4 places along the 6 km mineralized structure and returned averaged gold results of:

  			Line 0		1.18 g/t Au over 4.7 metres
  			Line 400		13.2 g/t Au over 10.0 metres
  			Line 496		0.33 g/t Au over 4.0 metres
  			Line 608		80.60 g/t Au over 1.5 metres

  The gold enriched, hydrothermally altered structural trend has been discovered during the 2009 exploration program which consisted of traversing and trenching. The mineralization has a width ranging from 5 to 10 metres and is hosted along the contact of hanging wall limestone and heavily folded footwall phyllite which is intruded by numerous intrusive dykes.

• Xicheng East Area

  Verification soil sampling and trenching were completed in Caopingshan zone of Chengjiashan-Heiwanliang block..

  In 2009, verification of soil gold anomalies in Caopingshan area and trenching in high-value spots resulted in findings of argillization and silicification zones in metasandstone. The assays received for trenching samples in Caopingshan area confirm that soil anomalies correspond with elevated gold concentrations in bedrock. Nine trenches in total were completed in the vicinity of trench TC1-1, one of them intersected a zone of weak silicification with inclusions of fine arsenopyrite, average gold content is 0.33 g/t Au over 2.3 metres. Due to the negative results no exploration works were completed in this area during the fourth quarter.

Ownership

Minco Gold's wholly-owned subsidiary, Minco China, presently holds the 12 exploration permits (in 3 sub-project areas) in the Longnan region of south Gansu Province, within the southwest Qinling gold field, in China.

Background

In August 2005, the Company initiated a regional stream sediment geochemical survey within the Yangshan, Yejiaba, and Xicheng East permits. The survey covered approximately 913 km2 and involved the collection of 3,036 stream sediment samples from active drainages. Twenty geochemical anomalies (gold, arsenic, antimony, and silver) were delineated in the famous Yangshan gold trend, 12 geochemical anomalies in Yejiaba area, and 11 anomalies in the Xicheng East area.

Geology and Mineralization

All thirteen exploration permits are located over regional geochemical gold anomalies with host rocks and structures similar to other gold deposits in the region. The local geology and exploration results within the three sub-project areas are described below.

Results

Exploration programs in 2006 focused on the most significant anomalies. Infill sampling, geological mapping, and trenching programs were conducted over the areas of interest and evidence of gold, silver, antimony, lead, and zinc mineralization has been discovered in all the three sub-project areas.

• Yuezhao Permit - The 12 km2 Yuezhao permit belongs to the Yangshan sub-project area. Gold mineralization at an abandoned tiny pit at the Yuezhao gold occurrence is more than 10 metres in width and contains samples ranging from 1.0 to 7.3 grams per tonne gold and two mineralized zones can be traced along strike. Zone ZT-1 has been traced for about 1,000 metres (m) at surface along the NE60-70° strike direction and varies from 2.0m to 3.6m in width with an average gold grade of 1.52 grams per tonne (g/t). Zone ZT-2 was located 35m north of zone ZT-1, has been traced for more than 400 metres, and varies in width from 1.3m to 6.1m with an average gold grade of 3.54g/t.

• Yangshanli Permit - The 42 km2 Yangshanli permit belongs to the Yangshan sub-project area. Stream sediment sampling outlined a number of strong gold, antimony, and arsenic anomalies. Nine composite Au-As-Sb-Ag anomalies have been delineated in the Yangshanli permit area and peak values from 0.1 to 0.8g/t gold have been detected in soil samples in most of these soil anomalies. Five alteration and mineralization zones, characterized with structural breccias, chloritization, silification, pyritization, limonitization, and anomalous gold from 0.1 to 0.65g/t in silty phyllite and phyllite, have been delineated within the gold anomalies. Preliminary follow up for the area where a peak gold value of 0.8g/t was detected in soil has defined an alteration zone of 400m in length and more than 10 meters in width. A gold mineralization zone of 200m in length and 1 to 2m in width with grades ranging from 1 to 3g/t was further delineated within the alteration zone.

• Chachashi Permit - The Chachashi permit belongs to the Xicheng East sub-project area where a significant anomalous zone measuring 1000m in length and 400m in width was contoured with a threshold of 0.5g/t silver in soil samples at the contact zone between a granite intrusion and the Proterozoic metamorphosed siltstone and sandstone. 12 soil samples within the anomaly contain 5 to 15g/t silver and 0.1% lead and zinc.