GGG Ggg Resources

RNS Number:3454B
Central China Goldfields PLC
11 April 2006



                          Central China Goldfields plc
                            ("GGG" or the "Company")

                CENTRAL CHINA SIGNS MOU ON DONG MAO HUO GOLD MINE


LONDON - 11 April 2005 - Central China Goldfields plc (AIM: GGG, GGGW) has
signed a Memorandum of Understanding ("MOU") to enter into a Cooperative Joint
Venture Contract ("Joint Venture") with the Shandong Zhengyuan Geology &
Resource Co. Ltd. ("Zhengyuan") over the Dong Mao Huo ("DMH") gold mine and two
exploration properties in Inner Mongolia.

  * The Dong Mao Huo mine has total resources, reported by Zhengyuan to
    various Chinese standards, of some 4.2 tonnes or approximately 135,000
    ounces of gold.

  * The Joint Venture includes one Mining Licence covering a 0.26km2 area
    and two Exploration Licences, covering an area of 9.26km2 with a small scale
    operational gold mine within the Mining Licence area

  * The Company have contracted CSA Australia to conduct an independent
    geological evaluation of the mining and exploration potential of the Dong
    Mao Huo mine and exploration properties to estimate the commercial and
    mining parameters associated with a possible expansion of the current
    operation.

   * GGG, through a newly established 95% controlled BVI-Registered company
    can earn up to 80% of the Joint Venture Company by spending Chinese Renminbi
    (RMB) 25 million (approximately US$ 3.125 million) in exploration and
    development over 3 years and RMB 7 million (approximately US$ 875,000) as
    property payment.

   * GGG can purchase the remainder 5% of the BVI-registered company for
    cash and/or shares on the basis of an independent valuation.

Dr. Jeffrey Malaihollo, Managing Director of Central China Goldfields, 
commented: "This will be our third Joint Venture in China and the first one on a
producing mine. We are looking for ways to increase the production of DMH mine
and at the same time explore the surrounding areas. The DMH mine will compliment
our advanced exploration projects the Snow Mountain area in Sichuan and the
Xiang Shui Tan project in Hubei and our grass roots exploration in the Maqu
Block of Northern Sichuan. We have built a strong base for the Company to grow."

The DMH gold mine is located about 210 km west (3 hours' drive) of Hohhot, the
capital of Inner Mongolia, China. The area is served by paved and dirt roads.
The Joint Venture consists of one Mining Licence and two Exploration Licences.

There is a small scale operational gold mine within the Mining Licence area. The
mine is exploiting oxide gold resources hosted by 60m wide quartz porphyry dyke.
Oxidation is down to 40 metres deep. The ore is crushed and treated by heap
leach on site. Loaded carbon is sold to local refineries.

Zhengyuan reported that the mining area has total inferred resources of 4.2
tonnes of gold (135,000 oz) in the Chinese 332, 333 and 334 categories. Within
this is a resource of 800,000 tonnes @ 3.27 g/t Au (circa 2.6 tonnes or
approximately 84,000 oz. of gold), 11.8 tonnes of silver (380,000 oz.) @ 14.27 
g/t Ag and 527 tonnes of copper @ 1.04% Cu in the 332 and 333 categories. The
resources calculated comprise undifferentiated oxide and sulphide ore. These are
contained in four steeply dipping lenses with widths of 1.5-4.75 metres and
tested only to a depth of 70-150 metres. Copper oxides (malachite and azurite)
were observed in the waste pile.

The DMH mine lies at the intersection of three major structural trends: the
Bayan Obo (SE trending), the Zhartai Mountain (EW trending) and the Yinshan
Duanlong (NS trending) faults. Other mineralisation in the area consists of iron
(magnetite) with Rare Earth Metals mine (Bayan Obo, reported to be the largest
Rare Earth mine in the world, is approximately 90 km away from DMH).

The Exploration Licences cover the area surrounding the mine and include the
Nadoa Bugai area, approximately 2.5 km to the west of the DMH mine. An abandoned
pit dug by local miners exploited oxide gold at Nadoa Bugai.

The area between DMH mine and Nadoa Bugai is covered by desert cover. There is a
mine shaft about 1km west of DMH mine which is exploiting magnetite. The
magnetite is hosted by gneissic biotite diorite cut by stringers of red orange
potassium feldspar, haematite and epidote. Central China Goldfields interpreted
this to be an area of possible porphyry copper-gold mineralisation.

Central China Goldfields plc, through its 95% controlled BVI-registered company,
has the right to earn a 80% interest in the Joint Venture Company by spending
RMB 25 million (approximately US$ 3.125 million) in exploration and development
over 3 years and RMB 7 million (approximately US$ 875,000) as property payments.
Upon GGG earning the 80%, should Zhengyuan choose not to contribute further, GGG
can increase its interest to 90%. On dilution to 10% Zhengyuan would be
free-carried. The total costs of investment would be returned to the
participants prior to distribution of profit.

The property payment is scheduled such that RMB 3.5 million (approximately US$
437,500) is due upon the issuance of the Business Licence. RMB 2.1 million
(approximately US$ 262,500) is due upon the transfer of all Mining and
Exploration Licences and geological data to the Joint Venture company. The
remaining RMB 1.4 million (approximately US$ 175,000) is due 1 year after the
transfer of Licences.

Central China Goldfields plc has the right at anytime to purchase the remaining
5% of the BVI-registered company, which is held by Goalfirst International
Limited, valued by an independent third party, using cash and/or shares at the
average mid-price of the prevailing previous 20 days of trade.

The Company has contracted CSA Australia to conduct an independent geological
evaluation of the mining and exploration potential of the DMH mine and the two
Exploration Licences to facilitate an estimation of the commercial and mining
parameters associated to a possible expansion of the current operation. Legal
due diligence is being conducted by Capital Law Associates of Beijing.

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 reviewed by Ciceron
Angeles MSc. FAusIMM 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 Australasian Institute of Mining and Metallurgy. Mr. Angeles has not
verified the resources quoted.

The following Chinese Resource Classification can be obtained from the
consultants Micromine China (www.microminechina.com):

  * Probable Intrinsic Economic Rs(332): The portion at the Detailed
    Exploration stage. Only geological study done, showing economic --
    submarginal economic at the time of calculation.
  * Inferred Intrinsic Economic Rs(333): The portion at 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 Mineral Resources by comparison with similar known deposits.
    Economics uncertain.


For further information, please contact:

Central China Goldfields plc             Nominated Advisor:
Dr. Jeffrey Malaihollo                   Ruegg & Co Limited
Tel: 020 7621-0200                       Brett Miller
Email: info@ccgoldfields.com             Tel: 020 7584-3663
www.ccgoldfields.com

Public Relations:                        Brokers:
Parkgreen Communications                 Westhouse Securities LLP
Victoria Thomas / Justine Howarth        Richard Morrison / Cailey Barker
Tel: 020 7493-3713                       Tel: 020 7601-6100

                                         King & Shaxson Capital Limited
                                         Nick Bealer
                                         Tel: 020 7426-5986



                      This information is provided by RNS
            The company news service from the London Stock Exchange

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