LRL Leyshon Res

RNS Number:0834J
Leyshon Resources Limited
04 December 2007

4 December 2007

              Ball Mills Ordered For Zheng Guang Gold Zinc Project

Leyshon Resources Limited ("Leyshon") (AIM & ASX: LRL) is pleased to announce
that it has placed orders for the manufacture and delivery of two ball mills at
a total cost of US$2 million for its Zheng Guang gold zinc project Heilongjiang,
northeast China.

Following extensive negotiations with China's major ball mill suppliers the
order has been placed with Shenyang Heavy Machinery Group one of China's largest
engineering groups based in the neighbouring province of Jilin.

The 4.6 metre diameter 750,000 tonnes per annum capacity mills are amongst the
largest of their type to be manufactured in China and the first is scheduled to
be delivered in August 2008 for the oxide circuit and the second in September
2009 for the sulphide circuit.

The total cost of RMB 15 million (US$2.03 million dollars) spread over 2 years
is in line with budget estimates and compares very favourably with that for
overseas manufactured and supplied mills. The delivery time of 8 months, is less
than a third of that being quoted for some international projects.

The commercial terms include free installation, a 10% retainer for quality
assurance and in the case of any delay a penalty of 1% of the total value of the
contract will be deducted for each week delivery of the mill is delayed.

In addition to the order of the ball mills, the local power authority, Nenjiang
Power Bureau, has been contracted to engineer the supply of 10 MW of electrical
power from the local grid via 35KV high voltage overhead transmission lines.

Heilongjiang is an energy rich province with abundant coal and gas supplies.
State Grid, the provincial power authority, is expanding its installed
electrical generating capacity by 80% to 2.2 terawatts (million megawatts) by
2010.

The province enjoys an average price of electricity half of that in China's
southern provinces and as a result the company expects to be able to negotiate a
very attractive power tariff compared with international standards.

Leyshon's Project Manager Dr Ye Dong Ping and the project construction team
continue to work closely with Chanchung Design Institute with a view to having
the engineering design completed in first quarter 2008.

An important step in the mining licence application has been achieved with
approval of the layout of the open pit, process plant and tailings dam by the
department of lands and resources (DOLAR). The various other approval processes
are well advanced and a number of the required reports and studies have been
submitted by various consultancies and approved by the relevant authorities.

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.

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.

The Company has cash on hand of US$15,000,000.

Managing Director Paul Atherley commented: "Our strategy is to rapidly bring
Zheng Guang into production combining the benefits of low Chinese capital and
operating costs with smart Australian metallurgical design.

The cost and lead time of the ball mills compare very favourably with
international standards and when combined with the remarkable infrastructure
levels in Heilongjiang its hard to imagine a better location in the world to be
developing a gold project right now."

For further information contact:

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

Pelham Public Relations
Charles Vivian
Tel: +44 (0)207 743 6672
Mob: +44 (0)7977 297 903

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

Seymour Pierce
Jonathan Wright
Tel: +44 (0)207 107 8050

                        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 first ever Sino Foreign
owned mine in the mineral rich province of Heilongjiang's 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 immediately available.

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.

Competent Persons Statement

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.

Mr 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'. Mr 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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