Proposed New Joint Venture
July 05 2005 - 5:17AM
UK Regulatory
RNS Number:4831O
Central China Goldfields PLC
05 July 2005
Central China Goldfields plc
XIANG SHUI TAN JOINT VENTURE
LONDON - 5 July 2005 - Central China Goldfields plc (AIM: GGG, GGGW) has signed
a Memorandum of Understanding to enter into a Cooperative Joint Venture Contract
("Joint Venture") with the Hubei North East Geological Team ("HNEGT") over the
Xiang Shui Tan Project ("XST") in the Luotian County, Hubei Province.
* The Xiang Shui Tan Project in Hubei Province has a resource, reported to
various Chinese standards, of some 200,000 oz. of gold, 4 million oz. of
silver, with base metal credits.
* The Project includes 4 deposits, one polymetallic (Au-Ag, Cu-Pb-Zn) and
three Au-Ag. Our partner reports that the Cheng Lin Gou polymetallic deposit
consists of several ore bodies with grades of 1.3-9.9 g/t Au, 77-130 g/t Ag,
0.5-0.7% Cu, 0.3-3.1% Pb and 0.1-1.6% Zn. The other three Au-Ag deposits
have average grades of 1.4-14.1 g/t Au and 11.7-347.8 g/t Ag.
* CCG can earn 70% by spending RMB 8.58 million (approximately US$ 1
million) over 3 years. Upon earning the 70%, should HNEGT choose not to
contribute further, CCG can increase its interest to 85%. On dilution to 15%
HNEGT would be free-carried. The total costs of investment would be returned
to the participants prior to distribution of profit.
The XST licence covers an area of just over 21 km2 and is located in Northeast
Hubei about 3 hours drive from Wuhan City. The Project consists of 4 separate
deposits and 2 prospects. Mineralisation appears to be associated with
Yanshanian (Mesozoic) intrusives (granodiorite) and controlled by NNE-SSW and
E-W faults.
HNEGT has drilled 8 drill holes in the last 2 years and using this data together
with previous drilling data and underground developments, they have defined an
inferred resource containing a total of 6.6 tonnes of gold (circa 200,000 oz),
119 tonnes of silver (circa 4 Moz.), 1,178 tonnes of copper, 5,790 tonnes of
lead and 3,242 tonnes of zinc of Inferred Resources to Chinese 332, 333 and
334-1 Standards (these are not as yet compliant to International Standards).
Details of the resource and average grades are provided in the table below.
Chris Ford, Exploration Manager, observes that "Gold and base metal
mineralisation, discovered by our partners occurs in a series of quartz veins
along major structures. The potential for production has been demonstrated by
recent small-scale mining from adits which is estimated by our partners to have
yielded a total of 600kg Au. Limited drill hole and adit intersections indicate
grades in some of the veins to average between 8 and 14 g/t Au. We are also
interested in reported alteration associated with gold and copper which may
indicate the proximity to porphyry copper and also skarn mineralisation as seen
in the lower Yangtze valley. We will use various geophysical, geochemical,
mapping and remote sensing techniques to explore for the extension of known
veins and for identifying potential porphyry and/or skarn targets."
Central China Goldfields plc, through its wholly owned BVI-registered subsidiary
Central China Minerals Limited ("CCM"), has the right to earn a 70% interest in
the Joint Venture Company. Upon the issuance of a Business Licence for the Joint
Venture Company, CCM can start earning its interest by spending RMB 5.88 million
for exploration and meet property payments of RMB 2.70 million over the next 3
years, for a total commitment of RMB 8.58 million (approximately US$ 1 million).
The property payments are scheduled such that RMB 540,000 (20%) is payable in
year 1, RMB 810,000 (30%) in year 2 and the remainder RMB 1.3 million (50%) in
year 3. Minimum annual contribution, including the property payments, is RMB 2.5
million (circa US$ 300,000).
Upon CCM earning its 70% interest, further exploration costs will be funded
according to the participants' percentage interest in the Joint Venture Company,
although HNEGT cannot be diluted below 15 percent. Should the project go into
production, the costs of exploration and development incurred will be returned
to each participants prior to the distribution of profit.
Dr. Jeffrey Malaihollo, Managing Director, comments "This is our second Joint
Venture agreement in China and the first Joint Venture for precious and base
metals in the Hubei Province. The Xiang Shui Tan project complements the Snow
Mountain Gold Project in having higher grade gold with significant silver and,
in some areas, substantial base metal credits. The existing work and smaller
size of the property means that we will be able to focus and add value to the
property more rapidly. We will utilise our technical ability and network of
contacts to continually grow the Company by adding high quality projects to our
portfolio".
Table of Inferred Resources and average grades:
Name Gold Silver Au Ag Cu Pb Zn
Resource Resource Grade Grade Grade Grade Grade
Cheng Majiagou 1.67 t 33.1 t 6.1 113.3 0.5% 3.1% 1.6%
Lin 1,2,3
Gou Chenligou 0.58 t 11.7 t 1.3 109.7
1
Chenligou 3.2 100.7
2
Wujiafan 1 0.47 t 2.3 t 5.2 81.7
Wujiafan 2 4.9 45
Wujiafan 3 10.2 84 0.9% 0.4% 0.2%
Fangjiadawan 0.41 t 1.5 t 6.6 40
1
Fangjiadawan 1.1 2.5
2
Fangjiadawan 1.7 12.9
3
Fangjiadawan 10.1 242
4
Jiang I 1.83 t 8.0 t 14.1 101.3
Jia II 4.3 31.0
Zui III 5.4 29.0
IV 3.4 23.6
V 13 25.7
Shuang I 0.61 t 4.3 t 1.4 11.7
He II 4.6 68.1
Kou III 1.4 21.0
Guo Yu I 1.16 t 44.9 t 8.4 314
Nao II 8.2 347.8
III 6.3 307.2
IV 5.4 19.6
Kang Jia Bian
Occurrence 2.4 81.4
Hou Jia Shan
Occurrence 2.4 27 0.15% 0.5% 2%
These resources are not defined in accordance with Internationally recognised
standards such as JORC, NI 43-101 or CMMI and should not be relied upon.
Nevertheless, management has received data supporting these figures and consider
them to be relevant.
Technical information in Company news releases has been received and approved by
Chris Ford MSc. who is the Company's Exploration Manager and is qualified as a
Competent Person under the Code for the Reporting Mineral Exploration Results,
Mineral Resources and Mineral Reserves ("The Reporting Code") prepared by the
Institute of Mining and Metallurgy.
For further information, please contact:
Central China Goldfields plc Ruegg & Co Limited
Dr. Jeffrey Malaihollo Brett Miller
Tel: 020 7621-0200 Tel: 020 7584-3663
Email: jeff@ccgoldfields.com
www.ccgoldfields.com
Parkgreen Communications Phillip Securities (UK) Limited
Victoria Thomas / Justine Howarth Nick Bealer
Tel: 020 7493-3713 Tel: 020 7426-5986
NOTES TO EDITORS
Central China Goldfields plc brings together a high level management team with
many years of experience of working in China. The Company listed on 30 March
2005 and has approximately #2m in cash. There are 52,245,000 Shares outstanding,
and 51,351,250 warrants issued, of which 31,580,000 are listed warrants (AIM:
GGGW).
Central China Goldfields plc is focused on exploration, discovery and
development of gold deposits in the People's Republic of China. The Company has
two properties: the Snow Mountain Gold Project in the Sichuan Province, which
has potential for hosting Carlin-like deposits and the recently acquired Xiang
Shui Tan Project in Hubei Province. CCG also has first right of refusal to apply
for licences over two areas totalling 4,600km(2) with the western Qinling Belt.
The XST project is located about 3 hours drive to the northeast of the capital
of Hubei Province, Wuhan. There is a sealed road up to 10 km from the property.
Wuhan is served by an international airport with regular connections to Hong
Kong, Beijing, Shanghai and Chengdu (where CCG's regional office is located).
The following Chinese Resource Classification can be obtained from the
consultants Micromine China (www.microminechina.com):
* Probable Intrinsic Economic Rs(332): The portion reached the Detailed
Exploration stage. Only geology study done, showing economic -- submarginal
economic at the time of calculation.
* Inferred Intrinsic Economic Rs(333): The portion reached the Prospecting
stage. Only geology study done, showing economic and submarginal economics
at the time of calculation.
* Reconnaissance Rs(334): Mineralisation potential area defined by
regional geology research results, anomalies of aero, remote sensing,
geophysics and geochemistry or very minor engineering. Belongs to
undiscovered MRs by comparison with similar known deposits. Economics
uncertain.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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