Nimu Copper-Molybdenum Deposit
May 11 2006 - 4:55AM
UK Regulatory
Central China Goldfields plc
("GGG" or the "Company")
CENTRAL CHINA SIGNS AGREEMENT
ON THE NIMU COPPER-MOLYBDENUM DEPOSIT
LONDON - 11 May 2006 - Central China Goldfields plc (AIM: GGG) has signed an
agreement to enter into a cooperative joint venture contract ("Joint Venture")
with the Sichuan Bureau of Metallurgy and Geological Exploration ("SBMGE") over
the Nimu Copper-Molybdenum Project ("the Project") in Tibet.
* The Nimu Copper-Molybdenum Porphyry Project has total inferred resources,
reported to various Chinese standards (not compliant to International
Standards), of some 600,000 tonnes of copper oxide (over 1.3 billion
pounds) at an average grade of 1.1% Cu. There is also 212,000 tonnes of
sulphide copper (over 467 million pounds) at grades of 0.29% Cu with
molybdenum grades between 0.02-0.08%.
* The Project includes seven exploration licences. Five licences are
contiguous (Bairong, Gangjiang, Ruigangmeng, Xiaqing and Dubuqu) and two
licences (Zongxung and Tinggong) are separate, although these are within
2km of the other five licences.
* Initial geological field investigation and data checking has been completed
by both CSA Australia and Central China Goldfields.
* GGG can earn an interest of up to 75% by contributing RMB 216 million
(~US$27 million) to the Joint Venture company over six years. The initial
30% will be vested upon property payment of RMB 32 million (~US$4.0
million) within nine months anniversary of the transfer of title. The next
15% will be vested upon GGG contributing RMB 68 million (~US$8.5 million)
for exploration and development within four years of the formation up of
the Joint Venture company. The last 30% will be vested upon GGG
contributing the remainder RMB 116 million (~US$14.5 million) within six
years of the formation of the Joint Venture company.
* Upon GGG earning the 75%, should SBMGE choose not to contribute further,
GGG can increase its interest to 84%. On dilution to 16% SBMGE would be
free-carried. The total costs of investment would be returned to the
participants prior to distribution of profit.
Dr. Jeffrey Malaihollo, Managing Director of Central China Goldfields,
commented: "This is our second Joint Venture with the Sichuan Bureau of
Metallurgy and Geological Exploration, which is our partner at the Snow
Mountain Gold Project. On the basis of reported Chinese standards and current
metal prices the Nimu Project represents over US$6.2 billion worth of metals in
the ground. This demonstrates the huge potential of this project and we will
start exploration work with the aim of assessing the economics of the project
and moving some of the resources up to International Standards."
"There are only a handful of porphyry copper belts in the world and the Nimu
Project, coupled with the agreement with HNEGT to explore the De Ming Ding
area, means that Central China Goldfields now has some of the best grounds
within the relatively unexplored Gangdese copper porphyry belt. These projects
have transformed Central China Goldfields from a single commodity company into
a substantial mineral exploration and development company focussed on
developing world-class resources in China."
Geology:
The Nimu Copper-Molybdenum deposit is located about 160 km west (4 hours'
drive) of Lhasa, the capital of Tibet. The area is served by paved and dirt
roads and there is a new railway connecting Lhasa to Golmud and the rest of
China.
The Project consists of five contiguous exploration licences (Bairong,
Gangjiang, Ruigangmeng, Xiaqing and Dubuqu) and two (Zongxung and Tinggong)
separate licences, which are within 2km of the other licences.
Geologically these licences are part of the Gangdese arc. This arc in the past
few years has been shown to host large copper deposits such as the Qu Long
deposit which has 5 million tonnes of contained copper and the Xietongmen
deposit which has measured resources of 106 Mt. @ 0.49% Cu and 0.7 grammes per
tonne ("g/t") Au for 1.3 billion lbs of contained copper and 2.7 Moz. of
contained gold.
The Nimu Project area includes a cluster of porphyry Cu-Mo mineral occurrences
with enriched supergene oxide copper blankets. Three of the mineral
occurrences, Tinggong, Bairong and Gangjiang show higher grades. The SBMGE
reported a total inferred resources, which were not reported according to JORC
and CIM NI-43-101 estimation standards, of approximately 600,000 tonnes (over
1.3 billion pounds) of supergene oxide copper at average grades of 1.1% Cu and
212,000 tonnes (over 467 million pounds) of hypogene sulphide copper at average
grades of 0.29% Cu. The molybdenum grades vary from 0.02-0.08%. The Bairong
property was also reported to have 10,700 tonnes of contained molybdenum.
All of the mineral occurrences are open on along strike and at depth. Further
exploration is needed to confirm reported resources, delineate the size of the
deposits and to identify additional targets within the tenements.
The Company has contracted CSA Australia, who went to the field earlier this
month, to perform an initial field assessment of the Nimu Project.
The table below shows the current size and average grade of the various
deposits reported to Chinese 333 and 334 standards. The 333 standard is defined
as Inferred Intrinsic Economic Standard whereas the 334 standard is defined as
Reconnaissance Standard.
The resources quoted here have not been verified by CSA Australia or the
Company and further work will be required to assess the economic potential of
the project.
Table of Inferred Resources and average grades (Data from SBMGE):
Tinggong (14.93km2
Name Cu Oxide Cu Sulphide Cu 333 standard
grade (Tonnes) (Tonnes)
(Tonnes)
Bairong Oxide 1.07% 60,700
(23.89km2)
Sulphide 0.29% 212,000
333 Standard 65,800
)
Oxide 1.1% 28,400
Sulphide 23,700
Gangjiang Oxide 1.1% 516,500
(29.87km2)
Zongxung Undifferentiated n/a 79,500
(28.96km2)
Xiaqing Undifferentiated n/a 18,800
(6.47km2)
Ruigangmeng No resources yet
(14.93km2)
Dubuqu Undifferentiated n/a 7,200
(14.94km2)
TOTAL 605,600 341,200 65,800
The Agreement:
Central China Goldfields plc has the right to earn a 75% interest in the Joint
Venture Company by spending RMB 216 million (~US$27 million) over six years.
The initial 30% will be vested upon property payment of RMB 32 million (~US$4.0
million) within nine months anniversary of the transfer of title. Property
payment schedule is:
Upon signing of the Agreement RMB 3.2 million (~US$ 400,000)
Upon transfer of title RMB 12.8 million (~US$ 1.6 million)
Within 6 months of transfer of title RMB 8 million (~US$ 1 million)
Within 9 months of transfer of title RMB 8 million (~US$ 1 million).
The next 15% will be vested upon GGG contributing RMB 68 million (~US$8.5
million) for exploration and development within four years of the formation of
the Joint Venture company. The last 30% will be vested upon GGG contributing
the remainder RMB 116 million (~US$14.5 million) within six years of the
formation of the Joint Venture company.
There is minimum annual contribution of:
Year 1 - RMB 4,000,000 (~US$ 0.5 million)
Year 2 - RMB 16,000,000 (US$ 2 million)
Year 3 - RMB 20,000,000 (US$ 2.5 million)
Year 4 - RMB 28,000,000 (US$ 3.5million)
Year 5 - RMB 36,000,000 (US$ 4.5 million)
Year 6 - RMB 80,000,000 (US$ 10 million)
Upon Central China Goldfields plc earning its 75% interest, further exploration
costs will be funded according to the participants' percentage interest in the
Joint Venture Company, although SBMGE cannot be diluted below 16%. Should the
project go into production, the costs of exploration and development incurred
will be returned to each of the participants prior to the distribution of
profit.
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 these figures and consider them to be
relevant.
Technical information in Company news releases has been reviewed and approved
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, 2004 ("The
Reporting Code") prepared by the Australasian Institute of Mining and
Metallurgy and the Australian Institute of Geoscientists. Mr. Angeles has not
verified the accuracy or otherwise of the Resource stated to Chinese Standards
quoted.
The following Chinese Resource Classification can be obtained from the
consultants Micromine China (www.microminechina.com):
* 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 Westhouse Securities LLP
Dr. Jeffrey Malaihollo Richard Morrison / Cailey Barker
Tel: 020 7621-0200 Tel: 020 7601 6100
Email: info@ccgoldfields.com
www.ccgoldfields.com
Public Relations: King & Shaxson Capital Limited
Parkgreen Communications Nick Bealer
Victoria Thomas / Justine Howarth Tel: 020 7426-5986
Tel: 020 7493-3713
END
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