China Gold International Resources Co has received positive results from an independent feasibility study carried out for the phase II expansion of its Jiama Copper-Polymetallic Mine in Tibet Autonomous Region.  1

Mining One has produced the NI 43-101-compliant report based on the Phase II Expansion Project feasibility study, prepared by the Changchun Gold Design Institute in conjunction with independent consulting engineers and the company’s management.

Jiama is a large-scale polymetallic deposit located about 68km east-northeast of Lhasa, the capital city of Tibet Autonomous Region, along the Sichuan-Tibet Highway within the Gangdise Copper Metallogeny Belt in Central Tibet, China and represents one of China’s largest copper-gold mines.

Phase I of the project commenced commercial production in September 2010 and included the development of the Tongqianshan and Niumatang open pits. These pits annually produce 1.8 million tonnes of run-of-mine ore. The ore from these mines is processed via two processing plants with a combined daily processing capacity of 6000 tonnes of ore.

The company plans to expand daily production capacity to 50,000 tonnes with the addition of a new flotation plant, the development of two additional open-pits (Jiaoyan and South pits) and the expansion of the underground mining operation. Total production is planned to increase from its current annual rate of 1.8 million tonnes to 16.5 million tonnes of ROM ore with 9.9 million tonnes from open pit sources and 6.6 million tonnes from underground operations. Metal concentrate will be sold to smelters within China.

A new mineral resource estimate was also prepared by Mining One with measured and indicated resources growing by 41% to 1.486 billion tonnes @ 0.41% copper. Proven and probable reserves increased to 441 million tonnes at a grade of 0.61% copper from 363 million tonnes. Contained copper in the resources increased to 6.138 million tonnes from 4.64 million tonnes.

The phase II plant capacity is expected to come online in two stages in 2015 and 2016. The ramp-up to an annual processing capacity approximating 16.5 million tonnes is expected to happen during 2017 and is expected to continue until 2039 when the reserves from the open pit mines are exhausted. After 2039, operations will continue from the underground mine until 2049 at an average annual rate of 5.4 million tonnes.

At the completion of operations the total recovered metal is estimated to be 5.3 billion pounds of copper, 192.4 million pounds of molybdenum, 101.3 million ounces of silver, 1.5 million ounces of gold, 828.2 million pounds of lead, and 314 million pounds of zinc.

Average annual metal production is estimated to be 67,000 tonnes of copper, 2400 tonnes of molybdenum, 2.8 million ounces of silver, 42,000 ounces of gold, 10,400 tonnes of lead and 4000 tonnes of zinc.

The estimated capital expenditure for the expansion is US$716.2 million or $1.59 per tonne of ore, estimated total operating costs are $23.48 per tonne of ore, of which mining costs are $11.50 per tonne, processing costs are $10.06 per tonne, fixed costs are $0.33 per tonne and overhead costs are $1.58 per tonne.

China Gold International Resources CEO Dr Xin Song says, “This feasibility study indicates a significant increase in our resources and reserves. The project’s economics are strong with an NPV (at a discount rate of 9%) of over $1.3 billion and IRR of 24% even when using prudent assumptions about metals prices. We are planning to grow the project from 6000 to 50,000 tonnes per day instead of previously announced 40,000 tonnes. We are also planning a longer mine life, close to 35 years. We are very pleased with the results of this study and the long-term outlook for this strategic asset.”

China Gold International Resources is based in Vancouver, BC, Canada and operates both profitable and growing mines - CSH Gold Mine in Inner Mongolia and Jiama Copper-Gold Polymetallic Mine in Tibet Autonomous Region.

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