CGM.L Regulatory News (CGM)

17 May 2006 07:00

China Goldmines PLC17 May 2006 CHINA GOLDMINES PLC(COMPANY NUMBER 5529561)www.chinagoldmines.com 17 May 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 Geological Results Confirm High Grade Mineralisation at the Shenjiaya Prospect Highlights of the Announcement:- • Underground sampling of the Shenjiaya Gold Prospect confirms the economic grade of the gold bearing quartz veins. • Run of the mine (ROM) sampling have verified that the current Chinese gold miners operations are profitable. • New discovery in the southern portion of our exploration licence within Shenjiaya of gold bearing quartz veins. (E.g. 1.170 kgs gold specimen discovery). • Company has established its operational office and logistic camp site in Guanzhuang which was officially opened on the 2nd April 2006 by Senior Chinese Governmental Delegates. • 4000 metres of diamond drilling, using 2 diamond drill core rigs, is planned during the next quarter to test economic continuation of ore bodies at depth. Exploration Activities China Goldmines plc is pleased to announce that exploration programs havecommenced on its Shenjiaya Gold Prospect in the Hunan Province, South WestChina. The programs included detailed surveys of all accessible underground mineworkings, underground channel sampling, determining the grade of Run of MineOre, mill feed from the current producing mines, and reconnaissance surfacegeological mapping to validate portions of previous geological mapping. One new exploration permit, covering the eastern extension of the Shenjiayagroup of mines, has been submitted. Underground surveys of the four accessible underground mine workings in theShenjiaya Gold Prospect, the Shenjiaya, Zhengjiashan, Baomuyuan and DeshengMines has been completed. Their accurate surveyed positions will allow foraccurate positioning of future surface drill hole interception points bothlateral to and below these mine workings for resource definition. Underground channel sampling of the quartz veins in the lower levels of theShenjiaya, Zhengjiashan and Baomuyuan mines has been completed. All samples havebeen assayed by the fire assay method at the Woxi Gold Mines Assay Laboratorywhich has been approved and accredited by the Chinese National MeasurementAuthentication Organization. These values support and confirm previous goldvalues from underground sampling conducted at Shenjiaya and Zhengjiashan byBrigade 407. Assay values for Shenjiaya, Zhengjiashan and Baomuyuan areillustrated and tabulated below. Shenjiaya Underground Assay Values at 43m below sea level elevation - March 2006Sample No. Grade Sample Weighted Average Orebody (g/t Au) Width(m) Grade(g/tAu) width(m)Shenjiaya-H35 13.50 1.20 7.36 2.36Shenjiaya-H36 1.00 1.16Shenjiaya-H37 3.80 1.10 7.62 2.24Shenjiaya-H38 11.30 1.14Shenjiaya-H39 8.80 1.45 6.59 2.98Shenjiaya-H40 4.50 1.53Shenjiaya-H27 7.80 1.68 7.80 1.68 Zhengjiashan Underground Sample Results at 95m Below Sea Level Elevation - March2006 Assay Weighted Average Ore bodySample No. (g/t Au) Sample Width(m) Grade(g/t Au) width(m)358-H16 7.00 1.29 5.31 2.50358-H17 3.50 1.21358-H18 3.50 1.28 6.43 2.59358-H19 9.30 1.31358-H23 7.30 1.17 8.86 4.62358-H24 1.50 1.30358-H25 1.00 1.15358-H26 29.30 1.00358-H27 15.30 1.19 13.39 2.39358-H28 11.50 1.20 Baomuyuan Underground Assay Values at 1m Above Sea Level Elevation - March 2006 Assay Weighted Average Ore bodySample No. (g/t Au) Sample Width(m) Grade(g/t Au) width(m)H22 4.50 1.05 4.28 2.15H23 5.25 1.10H27 2.72 1.10 4.17 5.66H28 5.25 1.27H29 4.75 1.11H30 5.80 1.13H31 2.00 1.05H32 3.00 1.12 3.27 3.66H33 4.50 1.26H34 2.30 1.28H44 0.50 1.53 22.19 2.86H45 47.15 1.33 A two phase surface sampling exercise was implemented to determine the grade ofmill feed, Run of Mine Ore (ROM), for the current producing mines. The oneprogram was for a period of 21 days. This involved the collection of a dailybulk composite sample by the collection of two standard shovel loads of minus 1"diameter sized material from each ore wagon. The composite sample was thenreduced by conventional cone and quarter method to produce a 2 kg sample forassay. All assays were done by the Woxi Mine laboratory, by the fire assaymethod. Assays show a wide range of values. Examination of the sampled materialshows that there is a dilution factor, i.e. the presence of wall rock material afunction of blasting, the reason for some of the lower grade values. Furthermorenone of these mining operations practice grade control procedures. This exercisewill be repeated in May and June to ascertain the variance in ore grade fromeach operation. Once China Goldmines earns its 80% interest in these mines, it will assumemanagement of the mine and address these dilution issues. Zhengjiashan Daily Mill Feed SamplesSample No. Assay Result Sample Date g/tAu0316BH1 1.50 Sampled on 16th March0317BH1 2.80 Sampled on 17th March0318BH1 5.50 Sampled on 18th March0319BH1 5.50 Sampled on 19th March0320BH1 6.80 Sampled on 20th March0321BH1 9.80 Sampled on 21st March0322BH1 16.80 Sampled on 22nd March0323BH1 2.30 Sampled on 23rd March0324BH1 5.80 Sampled on 24th March0325BH1 18.80 Sampled on 25th March0326BH1 9.30 Sampled on 26th March0327BH1 8.00 Sampled on 27th March0328BH1 8.00 Sampled on 28th March0329BH1 6.30 Sampled on 29th March0330BH1 4.30 Sampled on 30th March0331BH1 2.50 Sampled on 31st March0401BH1 3.00 Sampled on 1st April0402BH1 2.50 Sampled on 2nd April0403BH1 5.50 Sampled on 3rd April0404BH1 9.30 Sampled on 4th April Zhengjiashan One Days Sampling of Mill FeedSample. Assay Result Sample DateNumber g/tAu0405B001 2.50 Sampled on 5th April0405B002 5.80 Sampled on 5th April0405B003 2.30 Sampled on 5th April0405B004 5.80 Sampled on 5th April0405B005 6.50 Sampled on 5th April0405B006 14.00 Sampled on 5th April0405B007 5.80 Sampled on 5th April0405B008 1.50 Sampled on 5th April0405B009 4.30 Sampled on 5th April0405B010 21.50 Sampled on 5th April Baomuyuan Daily Mill Feed SamplesSample Assay Result Sample DateNumber g/t Au0316CH1 7.50 Sampled on 16th March0317CH1 1.50 Sampled on 17th March0318CH1 2.30 Sampled on 18th March0319CH1 0.80 Sampled on 19th March0320CH1 1.00 Sampled on 20th March0321CH1 0.80 Sampled on 21st March0322CH1 6.50 Sampled on 22nd March0323CH1 1.80 Sampled on 23rd March0324CH1 0.80 Sampled on 24th March0325CH1 1.00 Sampled on 25th March0326CH1 4.50 Sampled on 26th March0327CH1 9.50 Sampled on 27th March0328CH1 2.00 Sampled on 28th March0329CH1 4.50 Sampled on 29th March0330CH1 4.00 Sampled on 30th March0331CH1 5.80 Sampled on 31st March0401CH1 11.80 Sampled on 1st April0402CH1 2.00 Sampled on 2nd April0403CH1 2.30 Sampled on 3rd April0404CH1 1.80 Sampled on 4th April Baomuyuan One Days Sampling of Mill FeedSample Assay Result Sample DateNumber g/t Au0405C001 8.80 Sampled on 5th April0405C002 1.00 Sampled on 5th April0405C003 0.50 Sampled on 5th April0405C004 1.00 Sampled on 5th April0405C005 10.00 Sampled on 5th April0405C006 4.50 Sampled on 5th April0405C007 40.80 Sampled on 5th April0405C008 4.00 Sampled on 5th April0405C009 11.80 Sampled on 5th April0405C010 1.30 Sampled on 5th April0405C011 1.50 Sampled on 5th April0405C012 3.00 Sampled on 5th April0405C013 4.50 Sampled on 5th April0405C014 3.50 Sampled on 5th April0405C015 7.30 Sampled on 5th April0405C016 2.30 Sampled on 5th April0405C017 1.00 Sampled on 5th April0405C018 2.30 Sampled on 5th April0405C019 1.00 Sampled on 5th April0405C020 10.80 Sampled on 5th April Reconnaissance surface geological mapping has been concentrated to the south ofthe Shenjiaya mine. This mapping has been successful in the discovery of ananomalous gold bearing quartz vein and gold bearing vein quartz material. Oneof several specimens were found, one weighing in at 1.170 kgs. These findingsdemonstrate that the area is under explored for gold. Reconnaissance mapping inconjunction with surface sampling will continue. Future Geological Works Having completed successfully part one of our exploration program, as outlinedin our admission document and our investors presentation earlier thananticipated and based upon the positive sampling results we move forward todrill test the ore bodies at depth. In the June quarter some 4,000 metres of drilling, using 2 conventional surfacediamond drill core rigs will be used to test the depth continuation of existingeconomic grade. Contingent upon these results follow up drilling will continueto define a JORC compliant resource. As geological mapping and follow up sampling of outcrop reveals mineralisationadditional drilling will be planned to better evaluate extent of mineralisationand grade potential at any of the discoveries made. Structural mapping, surface costeaning (trenching) and 3D modelling are ongoing. Exploration of the Xiaotaoyuan Gold Project area will commence in the Septemberquarter. Corporate Activities • The directors are pleased to announce that since the listing of China Goldmines plc on the 7th February 2006, the company is well advanced in completing stage 1 of its program as outlined within the Admission Report:- - Structural mapping, detailed sampling and re-surveying of the existing underground mine developments. - Preliminary metallurgical test work. - 3D computer modelling of all geology, assay and survey data to assist in identifying the controls on mineralisation. - Diamond drilling to test identified structural, geological and geophysical targets, along with more systematic resource definition drilling. • The company is pleased to announce the appointment of Mr Quan Xue (David) as our Exploration Geological Manager. Mr Xue is a Chinese educated Geologist residing in Sydney. Mr Xue brings to the company a wealth of experience and knowledge of the geological region, together with immediately adopting to the two cultures. • The company will be releasing its half yearly interim financial figures ending on the 25th March 2006 on the 25th June 2006. Successful Establishment of its Chinese Office and Exploration Camp Site The company has established its operational office and logistic camp site in theGuanzhuang. This site was well received by the local community and wasofficially opened on the 2nd April 2006 by the following government officials. The representatives come from the different government departments andenterprises participating Guanzhuang office opening ceremony of Hunan WestralianMining Co. Ltd. The parties are as follows: • Department of Land and Resources of Hunan Province• Bureau of Geological and Mineral Resources Exploration and Development of Hunan Province• Huaihua City People's Government• Department of Land and Resources of Huaihua City• Department of Commerce of Huaihua• Huaixing, Huaihua branch of Industrial and commercial bank of China• Yuanling County People's Government• Department of Land and Resources of Yuanling County• Guanzhuang Town People's Government• Brigade 407 of Hunan Bureau of Geological and Mineral Resources Exploration and Development• China Geochemical Survey Institute of Hunan Province• Hunan Chenzhou Mining Co. Ltd (Woxi Gold Mine)• Shenjiaya Eight Mines 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) London: +44 207 788 7621China Goldmines plc Perth: +61 8 9488 8830 Mr Jamie Cumming +44 141 221 7733Bell Lawrie The information in this report was compiled by Mr. Ian Anderson, B.Sc. (Geol)F.A.I.M.M. (CPGeo), F.A.I.G. Mr. Anderson is a full time Consultant of theCompany. Mr. Anderson has sufficient experience which is relevant to the styleof mineralisation and type of deposit under consideration and to the activitywhich he is undertaking to be qualified as a Competent Person as defined by the2004 Edition of the 'Australasian Code for Reporting of Exploration Results,Mineral Resources and Ore Reserves'. Mr. Anderson consents to the inclusion inthe report of the matters based on his information in the form and context inwhich it appears and has reviewed the contents of this press release. This information is provided by RNS The company news service from the London Stock Exchange