China Gold International Resources (CGI) is continuing to use the technical and operating experience of its controlling shareholder China National Gold Group Corporation (CNG) to improve operations at its mines and increase production while minimizing costs.
The plan is part of the company’s growth strategy which also involves CGI working with other interested parties to identify potential international mining opportunities which can be readily and quickly brought into production.
CGI also has plans to drill up to 30,000 metres at its Jiama mine this calendar year after strong financial results for the first 2013 quarter.
The company’s consolidated revenues of US$76.7 million for the quarter ended March 31, 2013, were consistent with US$77.6 million earned in the corresponding 2012 quarter. Revenues from the Chang Shan Hao Gold Mine (CSH Mine) accounted for 62% of total revenue for the quarter. The remaining revenue came from the Jiama Copper-Gold Polymetallic Mine with US$29.3 million for the quarter.
CGI made significant reductions to its cost of sales for the quarter, primarily due to CSH’s reduction of waste rock removal expenditures, in addition to the optimization of ore processing at both mines. Cost of sales as a percentage of revenue for the company decreased to 62% from 67% for the three months ended March 31, 2013 compared to 2012. Mine operating earnings increased by 15% to US$29.3 million for the quarter while income from operations increased by 13% to US$22 million.
This is despite gold production at CSH decreasing 5% to 32,163 ounces for the March quarter. The major reasons are decreased gold grade in the pregnant solution in the processing cycle, and lower grade ore being placed on the leach pad during the first quarter of 2013 as compared to the same period in 2012.
At CGI’s Jiama mine, copper production significantly increased by 62% to 3083 tonnes for the quarter due to an increased volume of ore processed and improved copper grade. Based on these figures, the company has reaffirmed its 2013 outlook of expected production of 145,000 ounces of gold from CSH and production of 26.5 million pounds of copper from Jiama.
At CSH CGI is building a new 30,000 tonne/day stand-alone crushing, heap leaching and ADR (absorption, desorption and refining) plant system in addition to the existing facility, with the expansion expected to be completed in the fourth quarter of 2013.
The company expects to complete the Jiama Phase II Independent Feasibility Study and to release an updated NI43-101 compliant report by July. Expansion at this mine is planned in two stages and includes a new 20,000 tonne/day mill that will assist the mine’s full ramp-up of capacity to 40,000 tonnes/day by 2015.
In other news, the company has received an award in China’s Top 10 Major Mineral Exploration Achievements. The Geological Society of China announced nominations in the awards earlier this year, with CGI’s program on the east and west wings of CSH among the shortlist.
This 13-month program was undertaken with subsidiary Inner Mongolia Pacific Mining and Jinyou Geological Exploration and was completed in April 2012.
The exploration program was carried out in strict compliance with Chinese and international technical standards, utilizing advanced drilling equipment and high precision deviation control technology. 43 drilling rigs completed 58,170 metres of drilling over 101 boreholes, at a cost of US$8.5 million. Three resource update reports were completed and approved by relevant authorities based on the exploration outcomes. The potential resource increase from this exploration program marks a major step forward in the exploration and exploitation of low grade gold deposits.