LRL Leyshon Res

RNS Number:3756F
Leyshon Resources Limited
09 October 2007

9 October 2007
                        SEPTEMBER 2007 QUARTERLY REPORT

     Rapidly Bringing Heilongjiang's First Ever Sino Foreign Gold Mine into
                                   Production

Leyshon Resources Limited (AIM/ASX: LRL) is pleased to report that during the
quarter it continued to make substantial progress on a number of fronts in the
rapid development of the Zheng Guang gold zinc project ("Zheng Guang") in
Heilongjiang, northeast China.

Drilling Programmes

The diamond and reverse circulation drilling programmes continue to progress
well ahead of schedule and both programmes have been extended to increase the
infill drilling density in important areas and test additional targets.

The programmes have been designed to upgrade the bulk of the current 1.21
million ounces of gold, 3.72 million ounces of silver and 94,000 tonnes of zinc
resource estimate to the Measured and Indicated categories ahead of project
development in 2008 and to test exploration targets across the lease.

Diamond Drilling Programme

The diamond drilling programme has completed 90 holes for 17,480 metres, ahead
of the planned 17,000 metre programme and is infilling the Main Ore Zone.The
majority of holes drilled have, as expected, intersected strong mineralisation
with broad cumulative widths demonstrating good continuity both down dip and
between important sections in the centre of the Main Ore Zone.

Reverse Circulation Drilling

The reverse circulation drilling has completed 22,304 metres, ahead of the
planned 22,000 metre programme and includes a sterilization programme over the
proposed areas for the process plant, tailings dam and other surface facilities.
These facilities are in the engineering design phase and scheduled for
construction in early 2008.

The highlight of the results from the reverse circulation drilling programme,
which are in line with previous drilling results, are the excellent intersected
drill widths and grades of the near surface mineralisation.

Further encouraging results were received from reverse circulation drilling at
the Zheng Guang North deposit with the mineralisation continuing to extend in
all directions.

This deposit, located 750 metres to the north of the Main Ore Zone, was
discovered in last year's drill programme and is showing good potential to be an
immediate source of near surface oxide material.

Regional Exploration

A regional geochemical programme designed to identify immediate drill targets
has commenced on the recently acquired 80 km2 exploration licence adjacent to
the eastern boundary of the Zheng Guang licence.

The applications for three additional exploration licences to the east of Zheng
Guang have reached the final approval stage and they are expected to be issued
during October.

Project Design

Independent metallurgical consultancy Metallurg Pty Ltd of Australia has
reported on the latest testwork programme on the proposed gold and zinc
flotation circuit undertaken by AMMTEC (Australian Metallurgical & Mineral
Testing Consultants) of Western Australia.

Recovery of gold from sulphide ore has improved from 84% to 87% based on the
leaching of gold and silver metal from a high grade concentrate produced from
the proposed whole of ore flotation circuit. Further grinding and flotation of
the same concentrate produced a saleable zinc concentrate grading 47% zinc at a
recovery of 87% zinc.

The results confirm that there will be no requirement for mining and treating
separate ore types; meaning that a single gold/zinc sulphide ore can be supplied
to the plant. This will have considerable benefits in terms of grade control and
lower mining costs as larger volumes of ore can be mined without incurring the
difficulty of separating the ore types.

Metallurgical test work is ongoing to further refine the results achieved to
date and confirm the proposed process design.

Whittle pit optimisation studies on an open pit operation have been completed in
Beijing by Australian mining specialist Micromine and are based on the March
2007 JORC compliant resource estimate by Hellman and Schofield Pty Ltd of
Australia.

Approvals

The approval processes are well underway and are being led by Project Manager,
Dr Ye Dong Ping working closely with ex Ministry of Lands and Resources official
Professor Zhang who has been coordinating the joint venture's applications over
the past 12 months. The approval processes are well advanced with various
reports submitted and meetings attended with a view to having all necessary
approvals in place to enable construction to commence in early 2008. Geological
reserve and feasibility studies completed by the joint venture in accordance
with regulatory requirements have been completed and approved by the relevant
authorities.

Engineering

Chanchung Design Institute (CGDI) continues with basic engineering design under
the direction of a highly experienced project construction team lead by Project
Manager, Dr Ye Dong Ping with a view to having the design complete early in
2008.

Procurement of long delivery items continues by CGDI and the Black Dragon
procurement team. Meeting and presentations with two major ball mill suppliers
have been conducted and orders are expected to be placed shortly. The
procurement team has built a suppliers information database for the equipment
list provided by CGDI.

Site Work and Utilities

The Qiqiha'er Institute has completed site surveys and water resource
investigations. Environmental base line studies, soil and water conservation,
health and safety and other regulatory reports are well advanced.

The project benefits from being located in a well established coal and copper
mining community with excellent infrastructure including a rail connection to
the national network, grid power, water and a range of mining contractor
services.

The project is expected to benefit further from the recently announced US$8
billion planned infrastructure investment by the provincial government in the
surrounding area. This will coincide with low energy costs resulting from the
expansion of Heilongjiang's electricity generating capacity. The average price
of electricity in Heilongjiang is reported to be half of that in southern
provinces of China.

The Company remains fully engaged in China with its Managing Director and Chief
Operating Officer based in the main operating office in Beijing. Its policy of
full engagement with the local community is bearing fruit as negotiations with
local farmers and other affected parties for land acquisition and access are
well advanced and progressing well.

Corporate

The Company has 215,610,891 ordinary fully paid shares on issue and 4.35 million
options. Cash on hand at the end of the quarter was $18,223,487.

A copy of the Company's Quarterly cashflow report can be viewed at 
www.leyshonresources.com.

For further information contact:

Leyshon Resources Limited
Paul Atherley - Managing Director
Tel: +86 137 1800 1914
Mob: +61 417 475 038

Pelham Public Relations
Candice Sgroi
Tel: +44 (0)207 743 6376
Mob: +44 (0)7894 462 114

Seymour Pierce
Jonathan Wright
Tel: +44 (0)207 107 8000

                        http://www.leyshonresources.com

Background Information

Leyshon is fully engaged in China with its main operating office in Beijing, its
Chairman, Managing Director and Chief Operating Officer all based in China and
with over 80% of employees who are either native Chinese or Mandarin speaking.

The Company is rapidly progressing the Zheng Guang gold zinc project to
production status and is aiming to jointly develop it as the first ever
Sino-Foreign owned mine in the mineral rich province of Heilongjiang in 2008.

The project benefits from exceptional infrastructure as it is located within a
well established coal and copper mining community with rail, power, water and
mining contractor services available locally.

In March 2007, Hellman and Schofield Pty Ltd of Australia reported a JORC
compliant recoverable resource estimate of 1.21 million ounces of gold, 3.72
million ounces of silver and 94,000 tonnes of zinc of which 50% was reported in
the Measured and Indicated category.

The gold equivalent of this resource estimate is over 1.7 million ounces and the
discovery cost to date has been less than US$5 per ounce reflecting the lack of
modern exploration in a major gold belt which has produced over 20 million
ounces from mainly surface and alluvial methods.

Leyshon's partner, the Qiqiha'er Brigade of the Heilongjiang Bureau of Geology
and Mineral Resources, one of the largest organizations of its kind in China, is
providing a range of services to the joint venture from its complement of 4,000
technical staff, drill rigs, laboratory and other technical facilities. This
valuable support is enabling the project to rapidly move ahead on an extremely
cost effective basis.

Geological Information

The information in this report relating to Exploration Results, Mineral
Resources or Ore Reserves is based on information compiled by Richard Seville, a
Director of the Company, who is a member of the Australasian Institute of Mining
and Metallurgy.

Richard Seville has sufficient experience which is relevant to the style of
mineralisation and type of deposit under consideration and to the activity which
he is undertaking to qualify as a Competent Person as defined in the 2004
Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves' and under the AIM mining and oil guidelines. 
Richard Seville consents to the inclusion in the report of the matters based on
his information in the form and context in which it appears.




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

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