Measured and Indicated Resources grow by 41% to 1,486 Mt.
Jiama's NPV(9%) increases to over US$1.3
Billion.
VANCOUVER,
Jan. 15, 2014 /PRNewswire/ - China
Gold International Resources Co. Ltd. (TSX:CGG; HKEx: 2099) ("China
Gold International Resources" or the "Company") is pleased to
announce the results of an updated NI 43-101 compliant, Independent
Feasibility Study for the Phase II Expansion of its Jiama
Copper-Polymetallic Mine, ("Jiama" or the "Project") in Tibet
Autonomous Region, China. Mining
One Pty Ltd, has produced the NI 43-101 compliant report based on
the Phase II Expansion Project feasibility study, prepared by the
Changchun Gold Design Institute in conjunction with independent
consulting engineers and the Company's management.
Project Overview
The Jiama Project is a large scale polymetallic
(Cu, Mo, Au, Ag, Pb, Zn) deposit located approximately 68 km
east-northeast of Lhasa, the capital city of Tibet Autonomous
Region, along the Sichuan-Tibet Highway within the Gangdise Copper
Metallogeny Belt in Central Tibet, China and represents one of China's largest copper-gold mines.
Phase I of the Jiama Project commenced
commercial production in September
2010 and included the development of the Tongqianshan and
Niumatang open pits. These pits currently produce 1.8 million
tonnes per annum ("Mtpa") of run-of-mine ("ROM") ore. The ore
from these mines is processed via two processing plants with a
combined processing capacity of 6,000 tonnes of ore per day
("tpd"). The Company plans to expand the Project production
capacity to 50,000 tpd (Phase II plant capacity) with the addition
of a new floatation plant (44,000 tpd ore), the development of two
additional open-pits (Jiaoyan and South Pits) and the expansion of
the underground mining operation. Total production is planned to
increase from its current production rate of 1.8 Mtpa to 16.5 Mtpa
of ROM ore. Metal concentrate (saleable product), will be sold to
smelters within China.
Highlights
(All amounts are presented in US dollars unless
otherwise stated)
- Copper (Cu) Measured and Indicated Mineral Resources increased
to 1,486 million tonnes at 0.41% Cu from 1,053 million tonnes at
0.44% Cu;
- Copper Proved and Probable Mineral Reserves increased to 441
million tonnes at a grade of 0.61% Cu from 363 million tonnes at
0.77% Cu;
- Contained copper in the resources increased to 6.138 million
tonnes from 4.64 million tonnes;
- Total production rate is expected to grow to 16.5 Mtpa of ROM
ore: 9.9 Mtpa from open-pit and 6.6 Mtpa from underground
operations:
-
- Phase II plant capacity will come online in two stages in 2015
and 2016
- Ramp up to an annual processing capacity approximating 16.5
Mtpa of ROM ore is expected to happen during 2017 and is expected
to continue until 2039 when the reserves from the open pit mines
are exhausted
- After 2039, operations will continue from the underground mine
until 2049 at an average annual rate of 5.4 Mtpa of ROM ore
- At the completion of operations the total recovered metal is
estimated to be:
-
- 5.3 billion pounds of copper ("Cu")
- 192.4 million pounds of molybdenum ("Mo")
- 101.3 million ounces of silver ("Ag")
- 1.5 million ounces of gold ("Au")
- 828.2 million pounds of lead ("Pb")
- 314.0 million pounds of zinc ("Zn")
- Average annual metal production is estimated to be:
-
- 67 thousand tonnes of copper
- 2.4 thousand tonnes of molybdenum
- 2.8 million ounces of silver
- 42 thousand ounces of gold
- 10.4 thousand tonnes of lead
- 4.0 thousand tonnes of zinc
- Contributions by metal to total sales is: 66.5% copper, 12.7%
molybdenum, 8.6% silver, 8.3% gold, 3.5% lead and 1.3% zinc.
- Estimated life of mine is 35 years;
- Estimated capital expenditure is $716.2
million ($1.59 per tonne of
ore);
- Estimated total operating costs are $23.48 per tonne of ore, of which:
-
- Mining costs are $11.50 per tonne
of ore
- Processing costs are $10.06 per
tonne of ore
- Fixed costs are $0.33 per tonne
of ore
- Overhead costs are $1.58 per
tonne of ore
- A Net Present Value (NPV) of over $1.3
billion with nominal cash flow of $5.8 billion after-tax at a discount rate of 9%
based on metal prices of:
-
- $2.90/lb copper
- $15.5/lb molybdenum
- $0.98/lb lead
- $0.95/lb zinc
- $1,300/oz gold
- $20/oz silver
- After-tax Internal Rates of Return (IRR) of 24.0% with a
payback period of 6.72 years
Dr. Xin Song, CEO
of the Company, commented, "This feasibility study indicates a
significant increase in our resources and reserves. The Project's
economics are strong with an NPV (at a discount rate of 9%) of over
$1.3 billion and IRR of 24% even when
using prudent assumptions about metals prices. We are
planning to grow the project from 6,000 to 50,000 tonnes per day
instead of previously announced 40,000 tpd. We are also
planning a longer mine life, close to 35 years. We are very pleased
with the results of this study and the long-term outlook for this
strategic asset."
Geology
The Project is located in the central-south
portion of the Gangdise-Nianqing Tanggula Terrane. Stratigraphy
outcropping in the Project area is dominated by passive
epicontinental clastic-carbonate rocks. Three types of
copper-polymetallic mineralization are observed within the Project,
these include skarn, hornfels and porphyry hosted mineralization.
All three styles of mineralization are structurally controlled with
concentrations occurring along shear/structure zones and
mineralization offset by thrust and detachment faults as well as
associated with anticlines and synclines.
The zone of mineralization within fault hosted skarn alteration
measures kilometers in both strike and dip and remains open at
depth to the northeast.
Mining
The Phase II Expansion Project will include two
open pits and one underground mine.
The two open pits are designed to mine all three
types of mineralization, producing approximately 9.9 million tonnes
of ROM ore and removing about 20 million tonnes of waste rock per
annum with a life-of-mine (LOM) stripping ratio of 2.16. The
underground mine is designed to mine the high grade portion of the
skarn type mineralization and will produce approximately 6.6
million tonnes of ROM ore per annum.
Capex and Cash Flow Analysis
Estimated capital expenditures for the Phase II
Expansion of the Project will be approximately $716 million, including $350 million for processing and $366 million for mining.
The long term metal prices used for the
Feasibility Study are contained in Table 1 along with sensitivity
data. Prices for zinc and lead are $0.98/lb and $0.95/lb respectively.
The after-tax net present value ("NPV") is over
$1.3 billion with a discount rate of
9%, giving a payback period of 6.7 years and IRR of 24%. The
undiscounted, cumulative net cash flow is approximately
$5.8 billion.
Table 1: Jiama Copper-Polymetallic Project -
NPV and IRR Summary
Long Term Metal
Price |
|
NPV ($
Million) |
IRR |
Cu ($/lb) |
Mo ($/lb) |
Au ($/oz) |
Ag ($/oz) |
0%
Disc. rate |
7%
Disc, rate |
9% Base
Disc. rate |
11%
Disc. rate |
$2.90 |
$15.5 |
$1,300 |
$20 |
Pre-Tax |
$7,406 |
$2,461 |
$1,873 |
$1,438 |
30% |
After-Tax |
$5,785 |
$1,795 |
$1,324 |
$978 |
24% |
Mineral Resources Estimate
A Mineral Resource estimate, dated November 20, 2013, has been independently
completed by Mining One Pty Ltd in accordance with the CIM
Definitions Standards under NI 43-101. The Resource estimate
is based on information collected up to November 12, 2012. Assaying and geological
logging and testing of the core subsequent to November 2012 including an extensive drill
program conducted in 2013 will be included in future updates of the
Mineral Resources and Reserves.
During the review of the data Mining One Pty Ltd
noted that whilst the mineralization occurs within a single
mineralized body, gold and silver mineralization within the ore
body had a significantly higher spatial variability than the other
elements. As a result Mining One Pty Ltd has classified the Au and
Ag resource presented in Table 3 separately; this
classification takes into account the proposed large scale mining
techniques where Au and Ag will only be credits to the overall
products from the operations. Mining One Pty Ltd has assumed that
Au and Ag will not be assigned a single cut-off grade for a
selected mining block and will be mined in conjunction with the
other elements.
The Mineral Resources are summarized in
Tables 2 and 3. The Mineral Resources presented in
Table 3 for Au and Ag are inclusive and not in
addition to the Mineral Resources in Table 2 and
occur within the same mineralized body.
Table 2: Jiama Project - Cu, Mo, Pb and Zn Mineral
Resources
Reported at a 0.3% Cu Equivalent Cut Off Grade*, as of 20th of
November, 2013
|
|
|
|
|
|
|
|
|
|
|
Rock
Type |
Class |
Quantity
Mt |
Cu % |
Mo % |
Pb % |
Zn % |
Cu Metal
(kt) |
Mo Metal
(kt) |
Pb Metal
(kt) |
Zn Metal
(kt) |
Skarn |
Measured |
42.8 |
0.66 |
0.041 |
0.06 |
0.04 |
281 |
17 |
28 |
19 |
|
Indicated |
453.0 |
0.69 |
0.040 |
0.15 |
0.09 |
3,114 |
183 |
676 |
399 |
|
M+I |
495.8 |
0.68 |
0.040 |
0.14 |
0.08 |
3,395 |
200 |
704 |
417 |
|
Inferred |
125.5 |
0.46 |
0.038 |
0.20 |
0.10 |
577 |
47 |
248 |
125 |
Hornfels |
Measured |
54.9 |
0.23 |
0.031 |
0.03 |
0.01 |
127 |
17 |
15 |
5 |
|
Indicated |
852.9 |
0.28 |
0.030 |
0.01 |
0.01 |
2,368 |
253 |
69 |
64 |
|
M+I |
907.8 |
0.27 |
0.030 |
0.01 |
0.01 |
2,496 |
270 |
84 |
69 |
|
Inferred |
276.6 |
0.24 |
0.026 |
0.02 |
0.02 |
660 |
73 |
63 |
49 |
Porphyry |
Measured |
2.6 |
0.26 |
0.049 |
0.02 |
0.01 |
7 |
1 |
1 |
0 |
|
Indicated |
79.9 |
0.30 |
0.039 |
0.01 |
0.01 |
240 |
31 |
6 |
8 |
|
M+I |
82.4 |
0.30 |
0.040 |
0.01 |
0.01 |
247 |
33 |
6 |
8 |
|
Inferred |
4.0 |
0.24 |
0.085 |
0.01 |
0.02 |
10 |
3 |
0 |
1 |
Total |
Measured |
100.2 |
0.41 |
0.035 |
0.04 |
0.02 |
415 |
36 |
43 |
24 |
|
Indicated |
1,385.8 |
0.41 |
0.034 |
0.05 |
0.03 |
5,772 |
468 |
751 |
470 |
|
M+I |
1,486.0 |
0.41 |
0.034 |
0.05 |
0.03 |
6,138 |
503 |
794 |
495 |
|
Inferred |
406.0 |
0.31 |
0.030 |
0.08 |
0.04 |
1,247 |
124 |
312 |
174 |
Table 3: Jiama Project - Au and Ag Mineral Resources
Reported at a 0.3% Cu Equivalent Cut Off Grade* as of 20th of
November, 2013
|
|
|
|
|
|
|
Rock Type |
Class |
Quantity (Mt) |
Au g/t |
Ag g/t |
Au Moz |
Ag Moz |
Skarn |
Measured |
42.8 |
0.22 |
13.39 |
0.304 |
18.429 |
|
Indicated |
453.0 |
0.27 |
15.59 |
3.901 |
227.094 |
|
M+I |
495.8 |
0.26 |
15.40 |
4.205 |
245.523 |
|
Inferred |
125.5 |
0.19 |
11.90 |
0.750 |
47.995 |
Hornfels |
Measured |
54.9 |
0.02 |
1.32 |
0.041 |
2.330 |
|
Indicated |
852.9 |
0.03 |
1.38 |
0.909 |
37.733 |
|
M+I |
907.8 |
0.03 |
1.37 |
0.950 |
40.063 |
|
Inferred |
276.6 |
0.06 |
2.10 |
0.562 |
18.644 |
Porphyry |
Measured |
2.6 |
0.06 |
3.42 |
0.005 |
0.281 |
|
Indicated |
79.9 |
0.07 |
2.93 |
0.174 |
7.522 |
|
M+I |
82.4 |
0.07 |
2.94 |
0.179 |
7.803 |
|
Inferred |
4.0 |
0.04 |
2.25 |
0.006 |
0.287 |
Total |
Measured |
100.2 |
0.11 |
6.53 |
0.349 |
21.040 |
|
Indicated |
1,385.8 |
0.11 |
6.11 |
4.985 |
272.349 |
|
M+I |
1,486.0 |
0.11 |
6.14 |
5.334 |
293.389 |
|
Inferred |
406.0 |
0.10 |
5.13 |
1.317 |
66.926 |
Note: Figures reported are rounded which may result in
small tabulation errors.
The Copper Equivalent basis for the reporting of
resources has been compiled on the following basis:
CuEq Resources:
= (Ag Grade *
Ag Price + Au Grade * Au Price + Cu
Grade * Cu Price + Pb Grade * Pb Price + Zn Grade * Zn Price +
Mo Grade * Mo Price) / Copper Price
Mineral Reserves Estimate
A Mineral Reserve estimate, dated 20th of
November, 2013, has been independently verified by Mining One Pty
Ltd in accordance with the CIM Definitions Standards under NI
43-101.
The selected mining strategies developed by CGDI
(Changchun Gold Design Institute) consider conventional truck
shovel mining for the Jiaoyan and South open pits. Various mining
methods have been examined for the Phase II Expansion Underground
Mine with the primary method being Sub Level Stoping with fill
(Primary/Secondary/Tertiary).
The reserve estimate for the Jiama underground
mine is based on a combination of Sub Level Open Stoping with Paste
fill, Room and Pillar and Cut and Fill. Table 4
presents the Mineral Reserves estimate for the Project (Open pit
and underground mines).
Table 4: Jiama Project Statement of NI 43-101
Mineral Reserve Estimate as of 20th of Nov., 2012
|
|
|
|
|
|
|
|
Metal |
Type |
Quantity
Mt |
Cu % |
Mo % |
Pb % |
Zn % |
Au
g/t |
Ag
g/t |
Cu
kt |
Mo
kt |
Pb
kt |
Zn
kt |
Au
Moz |
Ag
Moz |
Proven |
24.96 |
0.64 |
0.04 |
0.05 |
0.03 |
0.19 |
11.35 |
160 |
10 |
12 |
8 |
0.2 |
9.1 |
Probable |
415.87 |
0.61 |
0.03 |
0.13 |
0.08 |
0.19 |
11.52 |
2,548 |
133 |
551 |
319 |
2.5 |
154.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal |
440.83 |
0.61 |
0.03 |
0.13 |
0.07 |
0.19 |
11.51 |
2,708 |
143 |
563 |
327 |
2.7 |
163.2 |
Notes: |
|
1. |
|
|
The Mineral Reserve as of 20th
November 2013. |
2. |
|
|
All Mineral Reserves have been
estimated in accordance with the JORC code and have been reconciled
to CIM standards as prescribed by the National Instrument
43-101. |
3. |
|
|
Mineral Reserves were estimated
using the following mining and economic factors: |
Open Pits: |
|
|
|
a) 5% dilution factor
and 95% recovery were applied to the mining method; |
|
|
|
b) overall slope
angles of 43 degrees; |
|
|
|
c) a copper price of
USD$ 2.9/lbs; |
|
|
|
d) an overall
processing recovery of 88 - 90% for copper |
Underground: |
|
|
|
a) 10% dilution added
to all Sub-Level Open Stoping; |
|
|
|
b) Stope recovery is
87% for Sub-Level Open Stoping; |
|
|
|
c) An overall
processing recovery of 88 - 90% for copper. |
4. |
|
|
The cut-off grade for Mineral
Reserves has been estimated at copper equivalent grades of 0.3%Cu
(NSR) for the open pits and 0.45%Cu (NSR) for the underground
mine. |
5. |
|
|
Mineral Reserve Estimates were
prepared under the guidance of Anthony R. Cameron who is a
sub-consultant to Mining One Pty Ltd. He is a Fellow of the
Australasian Institute of Mining and Metallurgy and has over 26
years of relevant engineering experience and is the Qualified
Person for Mineral Reserves. |
Project Update
As of December 1,
2013, the Company has completed a further infill drilling
program to upgrade the resource confidence and help further
optimize the mine design and reserves of the Jiama deposit. The
program consisted of 104 drill holes for a total of 43,930 meters,
including: 85 regular in-fill resource drill holes (34,923 m), 13
geo-technical drill holes (4,835 m), and 6 geo-hydrological holes
(4,172 m). Assaying and geological logging and testing of the core
from 2013 drill holes is ongoing and this information will be
included in the operational mine plans and future updates of the
Mineral Resources and Mineral reserves.
The Company is currently completing further
metallurgical testing of both skarn and hornfels ores to further
optimize the molybdenum and precious metal recoveries especially in
lower grade ores. Further testing underway in the South pit area,
will be focused on further refining the Cu-Pb-Zn separation.
Based on the above infill drilling and
metallurgical program the Company aims to continue to refine the
operational mining plans and release an update of the Mineral
Resources and Mineral Reserves in the first half of 2014.
National Instrument 43-101
Disclosure
An NI 43-101 Technical Report - Jiama Phase 2
Expansion Project Mineral Resources & Reserves for China Gold
International with an effective date of December 20, 2013 has been prepared by Mining One
Pty Ltd. The report will be available on SEDAR (www.sedar.com) and
on the Company's website within 45 days of this release.
The content of this news release has been
reviewed by Bin Guo and Anthony R.
Cameron of Mining One Pty Ltd, each of whom is a Qualified
Person in accordance with the requirements of NI 43-101. Bin
Guo is a sub-consultant to Mining One Pty Ltd and is the Senior
Vice President at CITIC Securities, responsible for valuation,
ranking and transaction of mining projects, and has been so
employed since 2011. He has 13 years' of industry and academic
experience, with specific expertise in exploration management, 3D
integrated geological and geophysical modelling / targeting and
fulfils the requirements to be a Qualified Person for the purpose
of NI 43-101.
Anthony R Cameron is a sub-consultant to Mining
One Pty Ltd and is classified as an independent author. He is a
Fellow of the Australasian Institute of Mining and Metallurgy and
has over 26 years of relevant engineering experience and is the
Qualified Person for Mineral Reserves.
About China Gold International
Resources
China Gold International Resources Corp. Ltd. is
based in Vancouver, BC,
Canada and operates both
profitable and growing mines, the CSH Gold Mine in Inner Mongolia,
and the Jiama Copper-Gold Polymetallic Mine in Tibet Autonomous
Region of the People's Republic of
China. The Company's objective is to continue to build
shareholder value by growing production at its current mining
operations, expanding its resource base, and aggressively acquiring
and developing new projects internationally. The Company is listed
on the Toronto Stock Exchange (TSX: CGG) and the Main Board of The
Stock Exchange of Hong Kong
Limited (HKEx: 2099).
Cautionary Note about Forward-Looking
Statements
Certain information regarding China Gold
International Resources contained herein may constitute
forward-looking statements within the meaning of applicable
securities laws. Forward-looking statements may include estimates,
plans, expectations, opinions, forecasts, projections, guidance or
other statements that are not statements of fact. Although China
Gold International Resources believes that the expectations
reflected in such forward-looking statements are reasonable, it can
give no assurance that such expectations will prove to have been
correct. China Gold International Resources cautions that actual
performance will be affected by a number of factors, most of which
are beyond its control, and that future events and results may vary
substantially from what China Gold International Resources
currently foresees. Factors that could cause actual results to
differ materially from those in forward-looking statements include
market prices, exploitation and exploration results, continued
availability of capital and financing and general economic, market
or business conditions. The forward-looking statements are
expressly qualified in their entirety by this cautionary statement.
The information contained herein is stated as of the current date
and subject to change after that date.
SOURCE China Gold International Resources Corp. Ltd.