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Sino Gold's Sanjianfang and Eastern Dragon Projects are located in Heilongjiang Province in northern China,approximately 425km north of the provincial capital Harbin.
In 2005, Sino Gold formed a joint venture with No. 707 Brigade of Heilongjiang Nonferrous Metals Geology Exploration (“Brigade 707”) in relation to the Sanjianfang Project.
In 2008, Sino Gold acquired an effective 80% interest in the nearby Eastern Dragon Lode 5 gold-silver deposit.
In 2009, Sino Gold increased its ownership of Lode 5 to 95% and also acquired 90% of the surrounding Exploration Licence. |
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In April 2009, Sino Gold's Board of Directors approved the US$65 million development of the Eastern Dragon Gold Mine. The project's Board Feasibility Review detailed the development parameters for a simple mining operation with a carbon-in-leach (“CIL”) processing plant.
Eastern Dragon is a high-grade deposit that is forecast to produce an average of 90,000 ounces per annum at approximately US$125/ounce (including silver credits) for the first five years of operation.
Exploration at Eastern Dragon has focussed primarily on Lode 5 which is a low-sulphidation epithermal quartz-adularia vein system with a near vertical dip. Gold-silver mineralisation in Lode 5 has been identified over a strike length of 800m and to a depth of 300m.
In January 2009, Sino Gold released an initial Mineral Resource estimate for Eastern Dragon totalling 0.8 million ounces gold and 7.2 million ounces silver (3.4 million tonnes at 7.1/t gold and 66g/t silver) and Ore Reserve estimate for Eastern Dragon of 0.5 million ounces and 4.4 million ounces silver (2.0 million tonnes at 8.4g/t gold and 70g/t silver).
The epithermal style of mineralisation at Eastern Dragon tends to form clusters of similar deposits and thus the area surrounding Lode 5 is considered highly prospective. Sino Gold's 2009 exploration program is aimed at extending and upgrading the Lode 5 resource and discovering new lodes in the surrounding large exploration licence.
Eastern Dragon is planned to be an operation comprising:
- Open-pit mining to approximately 60m below surface with an underground mine below using the benching mining method;
- Staged construction of a carbon-in-leach (“CIL”) processing plant with overall recoveries of approximately 95% for gold and approximately 80% for silver;
- CIL processing plant initially treating 150,000 tonnes per annum of open-pit ore with a reserve grade of 11.5g/t gold. It is anticipated that the plant will be expanded to 360,000 tonnes per annum;
- Average cash operating cost (C1) of approximately US$125 per ounce (after silver credits) over the first five years of production;
- Current mine life of approximately seven years;
- Total development capital cost of approximately US$65 million; and
- Construction period of approximately 15 months.
Sino Gold aims to bring Eastern Dragon into production as quickly as possible to become the Company’s third operating mine. Construction work at the mine site commenced in the September 2009 Quarter and, subject to the completion of permitting, is expected to be completed during 2010.
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