23 Jan 2009 11:00
China Goldmines plc
("China Goldmines" (CGM) or the "Company")
(AIM:CGM)
CHINA GOLDMINES GUANZHUANG GOLD PROJECT QUARTERLY UPDATE
DECEMBER 2008
Highlights
| CGM has identified high-grade stopes for production and remains confident that productivity levels will increase which will achieve our target of 20,000 - 25,000 ounces of gold during the calendar year 2009. The Company has completed its 2008 drilling program of 15,000 metres for the year, with December quarter's most significant result being 4.35 metres at 24.1 g/t. Drilling in the December quarter confirms the continuity of the ore body in both strike length and depth. For the 2008 calendar year we mined ore containing 5,161 ounces of gold of which 3,130 ounces were mined during the December quarter. During the December quarter the Company has sold 390 dry metric tonnes (DMT) of gold concentrate at 68.5 g/t, and also produced 10.5 kg of Doré Bars from gravity gold. A total of 1,002 ounces of gold was sold during the quarter at an average price of US$850 per oz. The Company's cash position was USD $10.4m which, together with an additional USD $2.6m in cash equivalent assets such as gold stock and security bonds, takes total cash reserves to USD $13m at the end of December 2008. Purchase of Gekko ILR 150 free gold recovery system for commissioning by mid 2009. The Company maintains a world class safety record with no injuries to date and all licences and permits are fully compliant. |
Update Production Activity Results
The Company's mining operation is making the transition from remnant mining while refurbishing the mines and is now targeting and mining new developments, with gold grades increasing to at least 6 g/t.
December Quarter Mining Summary
| A | BMY | XCZ | SJY | DS | ZJS | XL | Total Wagons | Total Ore (t) | Grade (g/t) | Gram Au (g) | Au (Oz) |
| Oct-08 | 1,559 | 585 | 808 | 315 | 1,016 | 4,283 | 4,047 | 2.96 | 11,979 | 385 | |
| Nov-08 | 2,922 | 1,153 | 1,095 | 2,087 | 2,035 | 9,292 | 8,781 | 4.17 | 36,616 | 1,177 | |
| Dec-08 | 2,588 | 2,052 | 1,752 | 1,445 | 3,444 | 32 | 11,313 | 10,691 | 4.56 | 48,751 | 1,568 |
| Total: | 23,519 | 4.14 | 97,947 | 3,130 |
* Note: 1 wagon: 0.945T
| B | Mining contained Au | For December 2008 97,947g or 3,130Oz. |
| For calendar year 2008 is 5,161Oz. |
December Quarter Milling Activity Results:-
| BMY PLANT | Tonnes | Grade (g/t) | Tails (g/t) | Recovery % | Concentrate | Gravity | ||
| Grade (g/t) | Tonnes | Au (g) | Au (g) | |||||
| Oct-08 | 2,097 | 2.81 | 0.23 | 91.81 | 121.09 | 34.54 | 4,182 | 1,221.35 |
| Nov-08 | 3,096 | 2.42 | 0.25 | 89.87 | 92.90 | 58.63 | 5,447 | 1,298.11 |
| Dec-08 | 4,206 | 3.17 | 0.28 | 91.26 | 109.01 | 88.00 | 9,593 | 2,554.61 |
| XCZ PLANT | Tonnes | Grade (g/t) | Tails (g/t) | Recovery % | Concentrate | Gravity | ||
| Grade (g/t) | Tonnes | Au (g) | Au (g) | |||||
| Oct-08 | 1,682 | 3.14 | 0.28 | 91.08 | 69.00 | 64.92 | 4,479.48 | 338.19 |
| Nov-08 | 2,331 | 5.67 | 0.29 | 94.89 | 92.26 | 121.17 | 11,179.14 | 1,355.69 |
| Dec-08 | 2,542 | 6.54 | 0.33 | 95.00 | 82.54 | 180.07 | 14,862.99 | 922.58 |
| DS PLANT | Tonnes | Grade (g/t) | Tails (g/t) | Recovery % | Concentrate | Gravity | ||
| Grade (g/t) | Tonnes | Au (g) | Au (g) | |||||
| Oct-08 | 85 | 3.27 | 0.24 | 92.66 | 46.79 | 4.33 | 202.60 | 55.85 |
| Nov-08 | 908 | 6.33 | 0.32 | 94.94 | 61.76 | 70.25 | 4,338.64 | 1,113.37 |
| Dec-08 | 1,145 | 5.26 | 0.27 | 94.78 | 58.84 | 83.89 | 4,936.06 | 776.92 |
Total December Quarter Milling Results:-
| Production Total for three plants | |||||
| Tonnes | Grade (g/t) | Concentrate Au (g) | Gravity Au (g) | Total Oz | |
| Oct-08 | 3,864 | 2.96 | 8,864.53 | 1,615.39 | 337 |
| Nov-08 | 6,334 | 4.17 | 20,964.51 | 3,767.17 | 795 |
| Dec-08 | 7,893 | 4.56 | 29,391.98 | 4,254.11 | 1,082 |
| Total: | 2,214 | ||||
Gold Sales
The Company has sold 390 (DMT) tonnes of gold concentrate at 68.5 g/t and 10.5 kg of gravity gold. A total of 1,002 ounces of gold was sold during the December quarter. A total of 1,594 oz's of gold was sold during the 2008 calendar year at an average price of 6,012 RMB per oz (US$884 per oz) achieving revenue of approximately 9.5 million RMB (US $1.4m).
Gold Refinery/Smelter
CGM has evaluated a number of refineries and options and entered into a contract with Yantai Gold Refinery a well respected and long established refinery in the Shandong Province, to process CGM concentrate. Consideration is based on spot price (less refinery costs) on collection of concentrate under the terms and conditions of the contract.
CGM will now proceed with disposing of its concentrate to the Yantai Refinery on a monthly basis. The Company will undertake a cost/benefit capital appraisal of constructing its own gold smelter in due course.
Advance Technology - Gekko Plant
The Company has bought the Gekko ILR 150 leach reactor system with commissioning due mid 2009.
The Gekko equipment is a well proven, safe and secure system for recovering "free gold" with over 100 reference installations around the world.
The Gekko system will replace the use of amalgamation with mercury. The Gekko equipment to be installed by CGM consisted of the following:-
| three centrifugal gravity concentrators to recover free gold from the mill circuit and produce a high-grade gold concentrate. an intensive cyanidation reactor (known as a Gekko In-line Leach Reactor) to dissolve gold from the concentrate. an electro-winning cell to recover the gold from solution as metallic gold which can easily be smelted into gold bars. |
Compared with amalgamation (in current use) its main advantages are:-
| improved gold recoveries as very fine gold particles can be recovered in the centrifugal concentrator improved gold security due to the "hands-off" nature of operations; the avoidance of mercury use resulting in improved health and safety aspects. |
The Company's current plan is for the Gekko system to be installed at Xiao Chong Zi Plant. Gold concentrates from Bao Mu Yuan and De Sheng would be transported to Xiao Chong Zi for gold recovery.
The Gekko equipment would increase the proportion of free gold recovery and decrease the proportion of gold recovered of flotation concentrate. The equipment purchase was justified on the basis of improving free gold recovery from about 20% to about 40% of total gold recovery. The estimate was based on:-
| experience with Gekko installations on other plants; knowledge of the mode of occurrence of gold in CGM ores from test work and observations of plant performances. |
Exploration
Exploration drilling has achieved a total of 15,000 metres for surface drilling during the 2008 calendar year. The underground drilling has completed approximately 2,000 metres. There were issues and delays due to the availability of compressed air. Underground sampling together with underground drilling continues to confirm the continuity of the ore bodies both along strike and with depth.
Significant underground sampling results over 6g/t
| Serial Number | Sample Number | Sampling Place | Sample Length | Sample Thickness | Au (g/t) Au content | Sampling Date | Assay Date |
| 1202 | D0005432 | 5/1A/Dr | 1.1 | 1.1 | 6.12 | 2008.10.4 | 2008.10.6 |
| 1251 | D0005449 | 1/2/Dr | 0.85 | 0.85 | 14.51 | 2008.10.9 | 2008.10.11 |
| 1260 | D0005455 | 1/A/Dr | 1 | 0.95 | 14.38 | 2008.10.10 | 2008.10.11 |
| 1263 | D0005458 | 1/A/Dr | 1.1 | 1 | 9.82 | 2008.10.10 | 2008.10.11 |
| 1267 | D0005462 | 1/A/Mu | Grab Sample | Grab Sample | 8.47 | 2008.10.10 | 2008.10.11 |
| 1273 | D0005468 | 3/2/Dr | 0.4 | 0.4 | 71.63 | 2008.10.10 | 2008.10.13 |
| 1277 | U0000013 | 4/1/Dr | 0.8 | 0.8 | 8.22 | 2008.10.11 | 2008.10.12 |
| 1286 | D0005469 | 2/1/Mu | Grab Sample | Grab Sample | 13.29 | 2008.10.11 | 2008.10.12 |
| 1288 | D0005471 | 3/2/Dr | 0.5 | 0.4 | 16.23 | 2008.10.12 | 2008.10.13 |
| 1293 | D0005476 | 3/2/Dr | 0.48 | 0.41 | 23.17 | 2008.10.12 | 2008.10.13 |
| 1232 | U0000301 | 8/1/Mu | Grab Sample | Grab Sample | 14.21 | 2008.10.14 | 2008.10.15 |
| 1237 | U0000120 | 5/1A/Dr | 0.5 | 0.5 | 6.68 | 2008.10.15 | 2008.10.17 |
| 1238 | U0000121 | 5/1/Dr | 1.4 | 1.3 | 14.42 | 2008.10.15 | 2008.10.17 |
| 1244 | U0000022 | 4/1/Dr | 1.5 | 1.5 | 10.78 | 2008.10.15 | 2008.10.16 |
| 1247 | D0005485 | 3/1c/Mu | Grab Sample | Grab Sample | 34.73 | 2008.10.15 | 2008.10.16 |
| 1251 | D0005489 | 1/A/Dr | 0.4 | 0.4 | 12.82 | 2008.10.15 | 2008.10.17 |
| 1263 | U0000123 | 5/2/Dr | 1.5 | 1.3 | 6.13 | 2008.10.17 | 2008.10.18 |
| 1274 | U0000203 | 3/3/Dr | 0.7 | 0.6 | 37.96 | 2008.10.18 | 2008.10.19 |
| 1283 | U0000212 | 3/3A/St | 1.3 | 1.3 | 9.15 | 2008.10.18 | 2008.10.19 |
| 1290 | U0000217 | 3/1c/Dr | 0.4 | 0.4 | 114.93 | 2008.10.21 | 2008.10.23 |
| 1294 | U0000128 | 5/2/Dr | 1.3 | 1.05 | 9.49 | 2008.10.21 | 2008.10.22 |
| 1303 | U0000221 | 1/2/Dr | 1.1 | 0.9 | 9.84 | 2008.10.22 | 2008.10.22 |
| 1305 | U0000136 | 5/2/Dr | 1 | 0.66 | 39.22 | 2008.10.22 | 2008.10.23 |
| 1308 | U0000304 | 8/1/Xc | 0.7 | 0.6 | 7.84 | 2008.10.23 | 2008.10.24 |
| 1314 | U0000138 | 5/1A/Dr | 0.75 | 0.7 | 7.56 | 2008.10.24 | 2008.10.25 |
| 1321 | U0000224 | 3/2/Dr | 0.8 | 0.8 | 12.69 | 2008.10.26 | 2008.10.27 |
| 1325 | U0000143 | 5/2/Dr | 0.6 | 0.6 | 10.6 | 2008.10.26 | 2008.10.27 |
| 1334 | U0000146 | 5/1A/Dr | 0.8 | 0.8 | 11.9 | 2008.10.28 | 2008.10.29 |
| 1336 | U0000148 | 5/2/Dr | 1.3 | 1.3 | 8.99 | 2008.10.28 | 2008.10.31 |
| 1343 | U0000235 | 1/2/Dr | 1 | 0.9 | 35.88 | 2008.10.29 | 2008.10.31 |
| 1349 | U0000244 | 1/A/Dr | 0.8 | 0.7 | 11.2 | 2008.10.29 | 2008.10.31 |
| 1355 | U0000154 | 5/2/Dr | 0.7 | 0.7 | 9.45 | 2008.10.31 | 2008.11.1 |
| 1356 | U0000155 | 5/1A/Dr | 1.3 | 1.1 | 6.01 | 2008.10.31 | 2008.11.1 |
| 1360 | U0000239 | 3/3/Dr | 1.1 | 1 | 8.47 | 2008.11.1 | 2008.11.2 |
| 1368 | U0000160 | 5/1A/Mu | Grab Sample | Grab Sample | 22.76 | 2008.11.2 | 2008.11.5 |
| 1370 | U0000252 | 3/1c/SDr | 0.6 | 0.6 | 14.97 | 2008.11.2 | 2008.11.5 |
| 1372 | U0000254 | 3/2/Dr | 0.83 | 0.83 | 25.95 | 2008.11.2 | 2008.11.5 |
| 1373 | U0000255 | 2/1/Edr | 0.8 | 0.35 | 8.64 | 2008.11.3 | 2008.11.5 |
| 1379 | U0000039 | 4/2/Dr | 1.2 | 1.2 | 8.57 | 2008.11.4 | 2008.11.6 |
| 1385 | U0000163 | 5/1/Dr | 1.2 | 1 | 8.52 | 2008.11.4 | 2008.11.6 |
| 1387 | U0000165 | 5/0/Mu | Grab Sample | Grab Sample | 35.43 | 2008.11.4 | 2008.11.6 |
| 1390 | U0000261 | 1/A/Dr | 0.9 | 0.9 | 11.35 | 2008.11.5 | 2008.11.6 |
| 1402 | U0000268 | 1/2/Dr | 1.3 | 1.3 | 10.14 | 2008.11.7 | 2008.11.8 |
| 1414 | U0000177 | 5/2/Dr | 0.9 | 0.8 | 6.82 | 2008.11.9 | 2008.11.10 |
| 1418 | U0000274 | 2/1/Dr | 0.8 | 0.8 | 10.53 | 2008.11.10 | 2008.11.12 |
| 1432 | U0000280 | 1/A/Mu | Grab Sample | Grab Sample | 10.87 | 2008.11.12 | 2008.11.13 |
| 1437 | U0000184 | 5/1A/Dr | 1.2 | 1 | 6.75 | 2008.11.12 | 2008.11.15 |
| 1438 | U0000185 | 5/1/Mu | Grab Sample | Grab Sample | 12.5 | 2008.11.12 | 2008.11.15 |
| 1440 | U0000282 | 3/2/Mu | Grab Sample | Grab Sample | 12.82 | 2008.11.13 | 2008.11.15 |
| 1451 | U0000189 | 5/2/Mu | Grab Sample | Grab Sample | 7.67 | 2008.11.14 | 2008.11.15 |
| 1453 | U0000191 | 5/2/Dr | 0.4 | 0.4 | 8.29 | 2008.11.15 | 2008.11.15 |
| 1468 | U0000291 | 3/2/Mu | Grab Sample | Grab Sample | 6.26 | 2008.11.16 | 2008.11.17 |
| 1476 | U0000057 | 4/1/Mu | Grab Sample | Grab Sample | 9.02 | 2008.11.18 | 2008.11.19 |
| 1478 | U0000317 | Surface Exposure | Grab Sample | Grab Sample | 54.53 | 2008.11.19 | 2008.11.20 |
| 1485 | U0000295 | 1/2/Dr | 1 | 0.8 | 12.59 | 2008.11.20 | 2008.11.22 |
| 1488 | U0000298 | 3/1C/SDr | 0.8 | 0.7 | 6.28 | 2008.11.20 | 2008.11.22 |
| 1489 | U0000299 | 3/1C/SDr | 1.2 | 1 | 23.29 | 2008.11.20 | 2008.11.22 |
| 1496 | U0000063 | 4/1/Dr | 1 | 0.9 | 35.99 | 2008.11.21 | 2008.11.22 |
| 1497 | U0000064 | 4/1/Mu | Grab Sample | Grab Sample | 6.9 | 2008.11.21 | 2008.11.22 |
| 1500 | U0000601 | 5/2/Mu | Grab Sample | Grab Sample | 13.12 | 2008.11.22 | 2008.11.23 |
| 1506 | U0000406 | 3/1C/SDr | 1 | 1 | 6.49 | 2008.11.23 | 2008.11.25 |
| 1515 | U0000415 | 3/1C/SDr | 1 | 1 | 11.51 | 2008.11.23 | 2008.11.25 |
| 1518 | U0000418 | 3/2/Mu | Grab Sample | Grab Sample | 6.25 | 2008.11.23 | 2008.11.25 |
| 1519 | U0000603 | 5/1A/Dr | 0.9 | 0.8 | 18.75 | 2008.11.24 | 2008.11.25 |
| 1521 | U0000605 | 5/1/Mu | Grab Sample | Grab Sample | 7.13 | 2008.11.24 | 2008.11.25 |
| 1525 | U0000069 | 4/1/Mu | Grab Sample | Grab Sample | 6.2 | 2008.11.24 | 2008.11.27 |
| 1529 | U0000073 | 4/1A/Dr | 0.9 | 0.8 | 9.57 | 2008.11.26 | 2008.11.28 |
| 1534 | U0000422 | 1/2/Dr | 1 | 0.8 | 11.13 | 2008.11.26 | 2008.11.28 |
| 1535 | U0000423 | 1/2/Dr | 1.25 | 1.1 | 6.62 | 2008.11.26 | 2008.11.28 |
| 1536 | U0000424 | 1/2/Dr | 1 | 0.8 | 13.08 | 2008.11.26 | 2008.11.28 |
| 1538 | U0000426 | 1/2/Dr | 1.2 | 1.1 | 15.26 | 2008.11.26 | 2008.11.28 |
| 1540 | U0000428 | 1/2/Dr | 1 | 0.9 | 11.53 | 2008.11.26 | 2008.11.28 |
| 1558 | U0000077 | 4/1/Dr | 0.4 | 0.4 | 7.27 | 2008.11.28 | 2008.11.29 |
| 1574 | U0000442 | 3/1C/Mu | Grab Sample | Grab Sample | 29.2 | 2008.11.30 | 2008.12.03 |
| 1576 | U0000079 | 4/1/Dr | 1.4 | 1.3 | 61.56 | 2008.11.29 | 2008.12.09 |
| 1579 | U0000329 | 8/1/Dr | 1 | 1 | 15.21 | 2008.12.02 | 2008.12.03 |
| 1585 | U0000621 | 5/1/Mu | Grab Sample | Grab Sample | 28.56 | 2008.12.03 | 2008.12.05 |
| 1609 | U0000466 | 3/4/Dr | 1 | 1 | 7.1 | 2008.12.03 | 2008.12.06 |
| 1632 | U0000500 | 7/4/Mu | Grab Sample | Grab Sample | 12.82 | 2008.12.08 | 2008.12.09 |
Table 1. Production Results for the Dec 2008 quarter, 79 samples with results over 6g/t.
Drilling Results
| Drill hole | Beijing Grid East (m) | Beijing Grid North (m) | Beijing Grid RL (m) | From (m) | To (m) | Interval (m) | Au (g/t) |
| Au (g/t) | From (m) | To (m) | Interval (m) |
| SJDD0026 | 37498084 | 3159178 | 257.42 | 60 | 61 | 1 | 1.54 |
| 1.54 | 60 | 61 | 1 |
| SJDD0037 | 37501178 | 3160304 | 265.75 | 430.05 | 433 | 2.95 | 6.25 | Includes | 7.09 | 430.05 | 431 | 0.95 |
| and | 5.75 | 431 | 432 | 1 | ||||||||
| and | 5.96 | 432 | 433 | 1 | ||||||||
| SJDD0037 | 435.85 | 437.25 | 1.4 | 1.35 |
| 1.35 | 435.85 | 437.25 | 1.4 | |||
| SJDD0037 | 452 | 453 | 1 | 1.64 |
| 1.64 | 452 | 453 | 1 | |||
| SJDD0042 | 37501253 | 3160342 | 206.81 | 433.7 | 434.45 | 0.75 | 2.62 |
| 2.62 | 433.7 | 434.45 | 0.75 |
| SJDD0045 | 37501677 | 3160256 | 403.84 | 45 | 45.85 | 0.85 | 1.49 |
| 1.49 | 45 | 45.85 | 0.85 |
| SJDD0048 | 37501447 | 3160324 | 313.82 | 425 | 434 | 9 | 3.00 | Includes | 4.31 | 425 | 426 | 1 |
| and | 2.26 | 426 | 427 | 1 | ||||||||
| and | 1.91 | 427 | 428 | 1 | ||||||||
| and | 1.34 | 428 | 429 | 1 | ||||||||
| and | 8.35 | 429 | 429.83 | 0.83 | ||||||||
| and | 1.56 | 429.83 | 431 | 1.17 | ||||||||
| and | 5.21 | 431 | 431.67 | 0.67 | ||||||||
| and | 1.72 | 431.67 | 433 | 1.33 | ||||||||
| and | 2.45 | 433 | 434 | 1 | ||||||||
| SJDD0048 | 478 | 479.17 | 1.17 | 1.64 |
| 1.64 | 478 | 479.17 | 1.17 | |||
| SJDD0048 | 482.3 | 486.65 | 4.35 | 24.09 | Includes | 4.00 | 482.3 | 483.2 | 0.9 | |||
| and | 53.20 | 483.2 | 484 | 0.8 | ||||||||
| and | 26.90 | 484 | 485 | 1 | ||||||||
| and | 30.30 | 485 | 486 | 1 | ||||||||
| and | 2.18 | 486 | 486.65 | 0.65 |
Table 2. Significant assay results - over 1g/t (Au).
| Drill hole | From (m) | To (m) | Interval (m) | Au-AA25 | Au-AA25D | Au-SCR21 | Au-SCR21 | Au-SCR21 | Au-SCR21 | Au-SCR21 | Potential % change |
| Au | Au | Au Total (+)(-) Combined | Au (+) Fraction | Au (-) Fraction | WT. + Frac Entire | WT. - Frac Entire | |||||
| ppm | ppm | ppm | ppm | ppm | g | g | % | ||||
| SJDD0022 | 480.95 | 481.75 | 0.80 | 0.99 | 1.01 | 1.01 | 2.31 | 1 | 5.63 | 984.4 | 2% |
| SJDD0022 | 486.00 | 487.00 | 1.00 | 1.21 | 1.06 | 1.13 |
| 1.14 | 6.75 | 973.3 | -7% |
| SJDD0022 | 492.00 | 493.00 | 1.00 | 2.56 | 2.77 | 2.95 | 19.75 | 2.67 | 14.06 | 815.9 | 15% |
| SJDD0022 | 493.00 | 494.00 | 1.00 | 2.42 | 2.26 | 2.59 | 36.4 | 2.34 | 6.67 | 913.3 | 7% |
| SJDD0037 | 430.05 | 431.00 | 0.95 | 7.14 | 7.07 | 7.09 | 5.46 | 7.11 | 10.45 | 891.6 | -1% |
| SJDD0037 | 431.00 | 432.00 | 1.00 | 5.71 | 5.79 | 5.75 | 6.01 | 5.75 | 6.49 | 1031.5 | 1% |
| SJDD0037 | 432.00 | 433.00 | 1.00 | 5.2 | 6.07 | 5.96 | 48.7 | 5.64 | 7.37 | 975.6 | 15% |
| SJDD0037 | 435.85 | 437.25 | 1.40 | 0.91 | 1.12 | 1.35 | 48 | 1.02 | 6.46 | 900.5 | 48% |
| SJDD0048 | 425 | 426 | 1 | 3.63 | 4.2 | 4.31 | 29.4 | 3.92 | 15.44 | 984.6 | 19% |
| SJDD0048 | 426 | 427 | 1 | 1.62 | 1.84 | 2.26 | 49.6 | 1.73 | 12.49 | 1107.5 | 40% |
| SJDD0048 | 427 | 428 | 1 | 2.06 | 1.75 | 1.91 | 2.37 | 1.91 | 13.92 | 1086 | -7% |
| SJDD0048 | 428 | 429 | 1 | 1.31 | 1.25 | 1.34 | 7.13 | 1.28 | 11.49 | 1038.5 | 2% |
| SJDD0048 | 429 | 429.83 | 0.83 | 7.5 | 7.68 | 8.35 | 72.1 | 7.59 | 13.96 | 1166 | 11% |
| SJDD0048 | 429.83 | 431 | 1.17 | 1.5 | 1.56 | 1.56 | 5.67 | 1.53 | 9.52 | 1230.5 | 4% |
| SJDD0048 | 431 | 431.67 | 0.67 | 5.4 | 5.06 | 5.21 | 4.11 | 5.23 | 16.32 | 1113.5 | -4% |
| SJDD0048 | 431.67 | 433 | 1.33 | 1.75 | 1.72 | 1.72 | 0.84 | 1.74 | 15.47 | 1234.5 | -2% |
| SJDD0048 | 433 | 434 | 1 | 2.49 | 2.43 | 2.45 | 1.6 | 2.46 | 13.11 | 1187 | -2% |
| SJDD0048 | 478 | 479.17 | 1.17 | 1.73 | 1.53 | 1.64 | 2.65 | 1.63 | 15.47 | 1134.5 | -5% |
| SJDD0048 | 482.3 | 483.2 | 0.9 | 3.66 | 2.62 | 4 | 37.9 | 3.14 | 32.47 | 1277.5 | 9% |
| SJDD0048 | 483.2 | 484 | 0.8 | 35.2 | 36.1 | 53.2 | 1050 | 35.7 | 20.15 | 1140 | 51% |
| SJDD0048 | 484 | 485 | 1 | 22.8 | 23.8 | 26.9 | 176 | 23.3 | 29.21 | 1201 | 18% |
| SJDD0048 | 485 | 486 | 1 | 23.2 | 23.5 | 30.3 | 412 | 23.4 | 18.66 | 1021.5 | 31% |
| SJDD0048 | 486 | 486.65 | 0.65 | 2.2 | 2.02 | 2.18 | 7.27 | 2.11 | 15.83 | 1084 | -1% |
Table 3 : Oversize fraction (Au-SCR21 / Au(+) Fraction) results for drill holes SJDD0022, 37 & 48 showing the potential under-estimation of total gold within the samples.
Au-AA25 - Standard Au assay protocol
Au-AA25D - Duplicate of Au-AA25 samples
Au-SCR21 - Using both minus and plus fractions for a full determination of gold present. Effectively provides a weighted average of 10% increase in contained gold. For resource purposes, only the Au-AA25 results will be used for consistency.
Au results - ppm is equivalent to g/t.
Exploration - Satellite imagery
As part of the regional exploration program, a series of Aster and LandSat images were acquired to allow interpretation and confirmation of past interpreted structures and geology mapping. Exploration targets were also developed from the images and the key findings were as follows:
The interpreted structural boundaries correlate well with the Brigade 407 (B407) results.
Lithologically, the satellite images suggest that B407 mapping has been completed satisfactorily in the northern part of the tenements, but in the southern half the interpreted geology is more complex than indicated by B407. This may be a result of the poor access to this area and does not pose significant difficulties at this stage.
Satellite interpretation distinguishes the main NE trending structures that host Au mineralisation currently exploited by HWM's eight mines. Also NW structures have been identified intersecting the main NE structures.
A number of anomalous zones have been indentified and may have to be tested by several reconnaissance drillholes to quantify alteration and targets generated from satellite images.
Exploration Targets
From the satellite imagery several regional exploration targets can be generated.
North Eastern corner of current EL and applied EL boundaries - already previously identified by Mobile Metals Ion (MMI) program;
North of SJY and ZJS near to current EL boundary;
South west corner of current EL and applied EL boundaries;
Several structural intersections along the known mineralised strike;
MMI programs may have to be considered for regional exploration, at a relatively cheap cost, to rank the areas of interest.
Mine Summary Update
Shen Jia Ya (SJY) Mine
Development of -40 Highway from SJY to De Sheng Mine is progressing well and breakthrough is expected in early 2009.
Active stopes at level 3 with 13,500t @ 14.5 g/t and level 4 with 10,800t @ 9.8 g/t.
Planning for SJY level 5 ore extraction was carried out and development of SJY decline 5 started.
Bao Mu Yuan (BMY) Mine
Mining is ongoing with two stopes at level 2 for 10,500t @ 4.7 g/t.
Xia Chong Zi (XCZ) Mine
Two stopes are active at level 1 for 18,900t @ 6.3 g/t.
De Sheng (DS) Mine
Development of DS decline 3 to -40 level started and is progressing well. In early 2009 decline 3 will reach the ore drive that connects with SJY mine. A steel pipe line for compressed air line was installed and construction of a new explosives magazine was completed. There are two active stopes on level 1 for 9,100t @ 4.3 g/t and 5,400t @ 27 g/t respectively and one stope for 7,300t @ 12 g/t on level 2.
Two stopes for 10,950 t @ 12 g/t are identified on level 3.
Zhen Jia Shan (ZJS) Mine
Refurbishment of office infrastructure was completed to house the mining, survey and geologist departments.
Production is ongoing at level 1 with a stope for 22,000 t @ 6.6 g/t and a stope on level 1A for 8,000t @ 6.6 g/t. Stopes identified for development at level 2 total 25,000t @ 6.6 g/t.
Jiu Fa (JF) Mine
Refurbishment of decline 3 was completed and rehab of decline 4 is in progress. Breakthrough to -40 Highway is expected in early 2009 to start the -40 Highway development towards the Jin Zhu Wan Mine.
Jin Zhu Wan (JZW) Mine
The Jin Zhu Wan ventilation was established. Survey pick-ups of decline 2 to decline 5 has been scheduled for January 2009.
Xiang Lu (XL) Mine
Refurbishment of decline 3 was completed and stoping commenced in late December.
Stopes are identified at level 1 for 12,000t @ 8 g/t, level 2 for 7,000t @ 11 g/t and at level 3 for 59,000 t @ 22g/t.
Central Decline Project/Review of Costs
In light of the unstable financial climate associated with capital markets, currency movement (GBP to USD) and the gold price, the Board has considered it appropriate to undertake a review of all expenditure with a view to reducing costs throughout 2009. The review is wide ranging:
Corporate and overhead costs are under review.
Assessment of further exploration drilling within the EL Tenement, while maintaining our drilling program within the ML and production region.
In September 2008 the Board decided not to fast-track the "Central Decline Project", but rather to remain on course with the original development plan scheduled to start mid 2009.
Human Resources and Safety
CGM has an excellent safety record for underground mining/processing in China, and the Company is proud that no time has been lost through injury during the December quarter. This has been achieved through extensive training and safety development programs.
-ENDS-
| China Goldmines plc | |
| Frank Vanspeybroeck (CEO) | +86 731 518 8200 |
| Alex Worrall (Director/Company Secretary) | +44 207 788 7621 |
| Marinko Vidovich (CFO) | +61 8 6216 5200 |
| Guanzhuang Site Office Brewin Dolphin Ltd (Nomad) | +86 745 463 9900 |
| Alex Dewar (Nominated Adviser) | +44 131 529 0276 |
Notes to Editors
China Goldmines plc is a UK mining company listed on AIM on 7 February 2006 as a gold resources company focussed on the discovery and development of gold projects in Hunan Province, China.
CGM's Gold Project is known as the Guanzhuang Gold Project. Based on an Independent Geological Report, the project has an estimated inferred resource of 1.8m ounces within the top 325m from the surface and over a strike distance of 1.5km. The resources have been identified from CGM's 100% owned/controlled Shen Jia Ya Prospect, which is within the Guanzhuang Gold Project.
The Shen Jia Ya Prospect consists of eight gold mines that have now been converted into a single mining licence. The Company plans to consolidate all eight individual mines. That consolidation will result in a mining operation with a long life producing 150,000 oz Au/pa, beginning in the near future. At the same time as mining the existing eight mines, China Goldmines will continue to investigate the potential of the project area that remains under-explored.
The information in this report was derived from data compiled by Hunan Westralian Mining Co. Ltd, China and reported by John Warner B. App. Sc. (App. Geol), MAIG, MGAA. John Warner is the Group Geology Manager to the Company. He has the required experience of the style of mineralisation and types of deposit under consideration and of the activity he is undertaking so that he is qualified as a Competent Person as defined by the 2004 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves.' John Warner consents to the inclusion in the report of matters based on his information in the form and context in which it appears and has reviewed the contents of this announcement.