LRL Leyshon Res

RNS Number:6661Q
Leyshon Resources Limited
25 March 2008



25 March 2008

                     Capital Cost Estimate for Zheng Guang
                               Gold Zinc Project

Leyshon Resources Limited ("Leyshon") (AIM & ASX: LRL) is pleased to report that
the capital cost estimate for the Zheng Guang gold zinc project in Northeast
China, as prepared by the Changchun Design Institute, is RMB 323.2 million
(USD45.5 million), which is lower than the Company's previous estimate of RMB
400 million.

The cost estimate has been prepared by the Company's engineering consultants,
the Changchun Design Institute, for a combined carbon in leach and flotation
plant which will be capable of processing both oxide and sulphide ore types. The
circuit has been designed to allow for the maximum flexibility in terms of ore
type and has the capacity for significant additional throughput.

Details of the estimate are as follows:

                                                    RMB

Mechanical Equipment 8                            9,071,000
Electrical and Instrumentation                   39,786,000
Other Equipment                                  27,594,000
Civil Engineering
(including earthworks and tails dam)            120,644,000
Management                                       46,074,000

Total                                           323,169,000 (USD45.5 million)

The estimate is considered to be robust and achievable. Competition between
suppliers remains strong and combined with close management of costs, it is
hoped that the inflationary pressures currently being experienced in a number of
areas can be offset to hold this overall estimate in RMB terms throughout the
construction period of the project.

The Changchun estimate does not include any allowance for inflation or
unbudgeted costs. The Company has assumed a contingency of up to RMB 33 million
(USD4.6 million) representing 10% of the capital estimate to allow for these
items.

The Changchun estimate, combined with this contingency, is in total
approximately 11% less than the RMB 400 million the Company forecast in 2006,
however much of this gain has been eroded in USD terms due to the appreciation
of the RMB during this period.

Supply contracts worth RMB 43.9 million (USD 6.2 million) have already been
placed for over 50% of the major equipment including all the major long lead
time items. Each contract has been individually negotiated by Leyshon's
procurement team, led by Project Manager Dr Ye Dong Ping, which is based in the
city of Changchun and is working closely with the Design Institute.

As previously announced, the Company has placed orders for the manufacture and
delivery of two ball mills at a cost of RMB15.2 million (USD 2.1 million). The
order was placed with Shenyang Heavy Engineering Company, one of China's largest
engineering groups based in the neighbouring province of Jilin. The 4.6 metre
diameter 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.

Orders totalling RMB12.1 million (USD 1.7 million) have also been placed with
the Chinese subsidiary of Metso Minerals, the world's leading rock and mineral
processing group for the supply of a Nordberg C125 Primary jaw crusher and two
Nordberg HP4f Cone crushers, delivered and installed by September 2008.

Rapid progress is being made in a number of areas as designs, orders and
approvals are finalised in anticipation of the commencement of development in
the next few months.

Managing Director Paul Atherley commented:

"Our strategy has been to work closely with Changchun Design Institute to
combine the benefits of low Chinese capital and operating costs with the latest
Australian metallurgical design. We are delighted with the plant's flexible
design and the capital cost estimate which has held steady in USD terms for the
past two years."


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 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. Over
80% of employees 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 immediately available.

Hellman and Schofield Pty Ltd of Australia has reported a JORC compliant
resource estimate of 1.21 million ounces of gold, 3.72 million ounces of silver
and 94,000 tonnes of zinc. Full details of the resource estimate are included in
an AIM/ASX release dated 19 March 2007.

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 as a Qualified Person as defined in the AIM
Rules. 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

END
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