CGM.L Regulatory News (CGM)

18 Dec 2006 10:22

China Goldmines PLC18 December 2006 18 December 2006 STOCK EXCHANGE RELEASE December 2006 China Goldmines plc listed on the AIM Board on the 7th February 2006 as a goldresource company with a direct interest in a gold mining project in the province of Hunan China. We are pleased to report the following activities to date Surface Diamond Drilling and Underground Channel Sampling Results Return High Grade Gold Mineralisation at the Shenjiaya Prospect Highlights of the Announcement:- • Additional underground sampling of the gold mines in the Shenjiaya Gold Prospect continues to return high grade gold values from quartz veins. Highlights include:- - Jinzhuwan Mine 1.5m @ 118.27 g/t Au - Xianglu Mine 1.37m @ 29.3 g /t Au - Zhengjiashan Mine 1.70m @ 13.10 g/t Au • Surface diamond drilling has commenced to drill test the depth and lateral extension to known mineralisation within the mines. Highlights of recent results include:- - Hole ZK03 0.75m @ 68.75 g/t Au - Hole ZK03 2.0m @ 48.45 g/t Au - Hole ZK601 2.3m @ 15.45 g/t Au - Hole ZK1001 1.4m @ 46.90 g/t Au - Hole ZK1001 1.45m @ 17.86 g/t Au • Additional mineralisation defined from 300m of strike length east of Xianglu Mine based on four (4) holes drilled. • A preliminary inferred resource estimate of this additional mineralisation is 278,000 tonnes at 3.95 g/t Au for some 35,000 contained ounces • Mineralisation remains open at depth and along strike. • Continuing run of the mine (ROM) sampling confirm extraction of ore grade material from the operating mines of between 5 g/t and 10 g/t Au. China Goldmines' CEO, Mr Frank Vanspeybroeck commented:- "We are very pleased to announce that since the commencement of our explorationactivities in April of this year the results to date far exceed ourexpectations. The geological results continually indicate high gradesdemonstrating a profitable mining operation, as a grade of 2.5 - 3 (and above) g/t Au is profitable in China. Further more our initial drilling has indicatedthat the mineralisation continues beyond our 5 km strike length project. This is a significant milestone for the Company as it will validate our ChineseJV Partner's resource calculation of one million plus ounces to a depth ofapproximately 325 metres (using Chinese resource methodology and standards). The Company looks forward to accelerate our drilling program for the 2007 yearas a pre-curser to our feasibility study for mining operations." Exploration Activities China Goldmines plc is pleased to announce the continued exploration on itsShenjiaya Gold Prospect the commencement of exploration activities on itsXiaotaoyuan Gold Project in the Hunan Province, South West China. The programsincluded the commencement of surface diamond drilling, continued surveys andunderground channel sampling of all accessible underground mine workings,monitor the grade of Run of Mine Ore, mill feed, from the current producingmines and continue reconnaissance surface geological mapping to validateportions of previous geological mapping. Updated underground surveys of all the accessible underground mine workings inthe Shenjiaya Gold Prospect, has been completed. Their accurate surveyedpositions will allow for accurate positioning of future surface drill holeinterception points both lateral to and below these mine workings for ongoingresource definition. Additional underground channel sampling of the quartz veins in the lower levelsof the Shenjiaya, Zhengjiashan, Baomuyuan, Jinzhuwan and Xianglu have beentaken. All samples are now assayed by the acid digest AA finish methodology bythe accredited Hunan Institute of Mineral Resources Laboratory located inChangsha. These values continue to support and confirm previous high gold valuesfrom underground sampling conducted at Shenjiaya and Zhengjiashan by Brigade407. Significant assay values for Shenjiaya, Baomuyuan, Xiaochongzi,Zhengjiashan Jinzhuwan and Xianglu are tabulated below. Shenjiaya Baomuyuan Xiaochongzi Underground Assays at 355m below Surface Grade Sample (g/t Au) Width(m) 10.8 2.16 11.8 2.35 40.8 1.9 Zhengjiashan Underground Assays at 315m below Surface Assay (g/t Au) Sample Width(m) 13.1 1.7 Xianglu Underground Assays at 150m below Surface Assay (g/t Au) Sample Width(m) 29.3 1.37 20.7 1.33 Jinzhuwan Underground Assays at 150m below Surface Assay (g/t Au) Sample Width(m) 62.0 1.60 28.3 0.90 38.8 0.75 108.0 0.80 130.0 0.70 70.0 0.60 A second phase surface of mill feed sampling, Run of Mine Ore (ROM), for thecurrent producing mines was completed. There was no change to the programmethodology, the collection of a daily bulk composite sample obtained by thecollection of two standard shovel loads of minus 5mm diameter sized materialfrom each ore wagon. The composite sample was then reduced by conventional coneand quarter method to produce a 2 kg sample for assay. Assays were done at theWoxi Mine laboratory, by the fire assay method. They show a wide range ofvalues. Examination of the sampled material shows that there is a dilutionfactor, i.e. the presence of wall rock material a function of blasting thuscausing some of the lower grade values. Furthermore none of these miningoperations practice grade control procedures. The results of this second phase of sampling are tabulated below. Mine No. of Dates Sample Ave. Sample Period Samples Sampled Range g/t Au GradeShenjiaya Stage 2 (29 days) 29 16/4/06 to 31/4/06 0.5 - 29.8 5.02Baomuyuan Stage 2 (23 days) 23 17/4/06 to 8/5/06 0.5 - 77.0 10.11Zhengjiashan Stage 2 (28 days) 28 20/4/06 to 8/5/06 0.5 - 20.5 8.77 Once China Goldmines assumes management of the mine it will address dilutionissues. Surface diamond drilling has commenced. To date eight (8) holes, totalling 3,223metres have been completed. Four (4) holes are in progress and five (5)additional holes are planned. This drilling has intersected gold mineralisation from 300m of strike lengtheast of Xianglu Mines based on four (4) holes drilled. Two drill holes haveintersected mineralisation below the Zhengjiashan Mine workings. Updated resultsof this drilling are tabulated below. Significant intercepts greater than 1 g/t Au are tabulated below Hole ID Dip Azi Total Depth m From (m) To (m) Length (m) Au (g/t) ZK03 -75 170(o) 386.0 273.71 275.33 2.02 3.63 degrees 275.73 276.86 1.13 3.37 276.86 278.86 2.00 0.32 278.86 280.61 1.75 8.25 280.61 282.31 1.70 2.94 282.31 283.83 1.52 2.31 283.83 285.51 1.68 1.38 285.51 286.89 1.38 12.07 286.89 287.96 1.07 3.63 287.96 289.51 1.55 1.06 289.51 291.01 1.50 68.75 291.01 292.61 1.60 0.50 292.61 293.71 1.10 0.80 293.71 294.71 1.00 7.75 294.71 296.36 1.65 3.38 296.36 297.67 1.31 5.50 297.67 299.30 1.63 3.18 299.30 300.78 1.48 1.38 300.78 302.81 2.03 1.00 302.81 304.81 2.00 1.00 304.81 305.96 1.15 48.45 305.96 307.59 1.63 2.17 307.59 309.35 1.76 1.80 309.35 310.85 1.50 2.00 310.85 312.32 1.47 6.70 312.32 313.74 1.42 2.00 315.46 317.06 1.60 1.63 318.86 320.76 1.90 1.00 320.26 322.55 1.79 1.87 324.22 325.89 1.67 1.00 327.45 329.02 1.57 1.87 ZK601 -75 170(o) 386.0 250.25 252.24 1.99 3.62 degrees 252.24 253.32 1.08 2.20 253.77 255.73 1.96 2.04 258.35 260.37 2.02 3.03 260.37 261.24 0.87 1.36 261.24 262.40 1.16 1.06 262.40 263.53 1.13 2.73 263.53 265.33 1.80 1.97 265.33 266.43 1.10 1.67 282.25 284.10 1.85 2.73 284.10 286.40 2.30 15.45 313.67 314.76 1.09 3.62 326.11 327.70 1.59 1.38 328.66 330.00 1.34 2.76 330.00 331.16 1.16 1.04 ZK4501 -75 170(o) 413.0 229.15 230.30 1.15 3.24 degrees 230.80 232.20 1.40 3.09 232.20 234.31 2.11 2.94 279.27 279.97 0.70 9.64 279.97 282.01 2.04 1.07 ZK1001 -75 170(o) 464.0 158.83 160.28 1.45 17.86 degrees 337.40 338.51 1.11 16.60 338.51 339.51 1.00 3.50 357.01 358.23 1.22 1.38 358.23 359.13 0.90 1.50 360.93 362.33 1.40 46.90 362.33 363.58 1.25 6.60 363.58 364.83 1.25 2.00 367.38 368.58 1.20 9.10 • Mineralised widths reported on down hole basis, true width no yet established. • Mineralised intervals calculated on basis of lower cut-off of 1.0 g/t Au, minimum mineralised interval of 0.5m. • All samples are assayed by the acid digest AA finish methodology by the accredited Hunan Institute of Mineral Resources Laboratory located in Changsha. Resource Estimation The area east of the Xianglu Mine intersected by current drill holes has beenblock modelled using MineMap Software. Cell sizes of the block model are 10m x 5m x 2m. Nominal density (m(3)) of 2.5 applied to the model. Sectional interpretation of >1 g/t Au mineralisation outlines were imported intothe block model using the Inverse Distance Ellipsoid Algorithm with a weightingpower of 2.5. The search ellipsoid is rotated at 240degrees with a -70degrees dip to thenorth. Preliminary statistical analysis, 0.1 lognormal distributions, indicates theupper cut to be 35 g/t Au. Two separate search ellipsoids were applied, namely:- • Phase 1 X = 30m Y = 150m Z = 100m • Phase 2 X = 15m Y = 25m Z = 15m Results from this preliminary inferred resource estimation, using a 3 g/t Aulower cut-off grade and a 35 g/t Au upper cut-off grade, is some 278,000 tonnesat 3.95 g/t Au will add an additional 35,000 contained ounces. A resource upgrade on depth extension, based on underground sampling is underreview and will be announced in the near future. Metallurgical Test Work 3 bulk samples of run of mine ore have been collected from the Shenjiaya,Baomuyuan and Zhengjiashan mines. Portions of these bulk samples are to be sentto Ammtec Laboratories in Perth Australia for basic preliminary test work.Results are pending. Future Geological Works Preparations are being made for the planning of an underground developmentprogram with commensurate underground diamond drilling in the Shenjiaya GoldProject. The continued evaluation and exploration of the Shenjiaya and Xiaotaoyuan GoldProjects. Corporate Activities • The Company has established its administrative head office in Changsha,Hunan's capital. Together with its site office in Guanzhuang, the Companyincreased its staffing level to 20. • The transfer of the Shenjiaya Gold Prospect and the Xiaotaoyuan GoldProject licences to the Joint Venture Company is being processed. • Mr Tony Hespe has accepted the position of Exploration Manager andcommences duties in January 2007. Mr Hespe is a geologist with 30 yearsexperience in exploration, resource definition and mine geology. He recentlycompleted a two year assignment in China evaluating exploration properties for amajor Canadian mining company. The information in this report was derived from data compiled by HunanWestralian Mining Co., Ltd, China and reported by Mr. Ian Anderson, B.Sc. (Geol)F.A.I.M.M. (CP), M.A.I.G. Mr. Anderson is a Consultant to the Company. Mr.Anderson has sufficient experience which is relevant to the style ofmineralisation and type of deposit under consideration and to the activity whichhe is undertaking to be qualified as a Competent Person as defined by the 2004Edition of the 'Australasian Code for Reporting of Exploration Results, MineralResources and Ore Reserves'. Mr. Anderson consents to the inclusion in thereport of the matters based on his information in the form and context in whichit appears and has reviewed the contents of this press release. ---oo0oo-- About China Goldmines plc China Goldmines plc listed on the Aim Board on the 7th February 2006 as a goldresources company focussed on the discovery and development of gold projects inthe Hunan Province, China. The Company is preparing a feasibility study on its Guanzhuang Gold Project,where a resource of + 1 million ounces within the top 325m from surface and overa strike distance of 1.5 km has been identified by our Joint Venture Partner,Brigade 407 of the Hunan Region Bureau of Geology and Mineral ResourcesExploration and Development. (This resource has not been validated by CGM andtherefore cannot be categorised to a specific resource as defined in JORC CodeStandards.) The Guanzhuang Gold Project consists of eight gold mines which the Company plansto consolidate. This could enhance the production potential to a vertical depthof 1000 metres from surface. For further information on China Goldmines plc you are invited to visit theCompany's website at www.chinagoldmines.com or contact one of the following: Mr Frank Vanspeybroeck (CEO) Mobile: +61 041 116 6276 Marinko Vidovich (CFO) Mobile: +61 041 997 4744 +61 041 997 4744 +86 731 515 8211 Changsha Office +44 207 788 7621Alex Worrall (Director/Company Secretary) This information is provided by RNS The company news service from the London Stock Exchange