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China Gold International Announces Year-End 2012 Results and 2013 Outlook

March 25, 2013
Gold Production Increases by 4%. Copper Production Increases by 20%. Revenues Grow by 7%. Both Mines Are Going Through Expansion and Continue to be Awarded for Environmental Initiative and Social Responsibility.

VANCOUVER, March 25, 2013 - China Gold International Resources Corp. Ltd. (TSX: CGG; HKEx: 2099) (the "Company" or "China Gold International Resources") is pleased to report Year-End 2012 results with record gold and copper production and revenues, and provide 2013 Outlook.

2012 Financial, Production and Operating Highlights

  • Revenues increased by 7%, or US$21.1 million, from US$311.3 million for the year ended December 31, 2011, to US$332.4 million for the year ended December 31, 2012.
  • Revenues from the Chang Shan Hao Gold Mine (the "CSH Mine", the "CSH Gold Mine" or "CSH") accounted for 67%, or US$223.8 million (2011: US$214.5 million), of total revenue for the year. Changes in CSH's 2012 revenue total included a 2% increase in gold sold and higher commodities prices.
  • Revenue from the Jiama Copper-Gold Polymetallic Mine (the "Jiama Mine" or "Jiama") accounted for 33%, or US$108.6 million (2011: US$96.8 million), of total revenue for the year. This growth mainly attributed to increased production levels and increased sales of other minerals produced by the Jiama Mine.
  • Cost of sales increased by 9% or US$16.9 million, from US$190.6 million for the year ended December 31, 2011 to US$207.5 million for the same period in 2012. The increase in cost of sales is attributable to greater amounts of waste rock mined in the process of increasing production at the CSH Mine and to the increase in underground mining at the Jiama Mine.
  • Mine operating earnings for the Company increased by US$4.1 million, from US$120.8 million for the year ended December 31, 2011 to US$124.9 million for the year ended December 31, 2012 due to increased revenue, offset by increased mining and production costs for both mines. Mine operating earnings as a percentage of revenue decreased slightly from 39% for the year ended December 31, 2011 to 38% for the year ended December 31, 2012.
  • Net income of the Company decreased by US$8.5 million from US$82.0 million for the year ended December 31, 2011 to US$73.5 million for the year ended December 31, 2012.
  • Gold production from the CSH Mine increased by 4% from 133,541 ounces in 2011 to 139,443 ounces in 2012. This growth is partially due to improvements in gold recovery through finer ore crushing to the leach pad, increased average flow of leaching solution, improved carbon absorption and higher recoveries.
  • The total production cost of gold per ounce and cash production cost of gold per ounce for the year ended December 31, 2012 both increased compared with the same periods in 2011. The primary reasons are the greater amount of waste rock mined, and higher processing costs experienced in 2012.
CSH Mine Year ended December 31,
  2012 2011
Total production cost (US$) of gold per ounce 928 876
Cash production cost* (US$) of gold per ounce 825 778
* Non-IFRS measure    
  • The accumulative project-to-date gold recovery at CSH has increased from approximately 49% in 2011 to over 53% by the end of 2012.
  • Mine expansion feasibility study to double the CSH Mine's processing capacity to 60,000 tpd was completed in November 2012. Gold production is expected to double from its 2012 level of 139,443 ounces per annum to about 260,000 ounces per annum by 2015. Estimated capital expenditure for the expansion is approximately US$213 million. The after-tax NPV of the project is US$642 million at a 9% discount rate.
  • Copper production from the Jiama Mine significantly increased by 20% from 21,563,193 pounds in 2011 to 25,820,417 pounds in 2012. This second full year of increasing production for the Jiama Mine is mainly due to higher grades and volumes of ore mined and improved recovery rates.
  • Total production cost and cash production cost of copper per tonne and per pound both decreased due to the improvement in the ore grade during the period. The Company is closely monitoring production costs at the Jiama Mine and will continue to make efforts to reduce costs.
Jiama Mine Year ended December 31,
  2012 2011
Total production cost* (US$) of copper per tonne 9,097 9,166
Total production cost* (US$) of copper per pound 4.13 4.16
Total production cost* (US$) of copper per tonne
after by-products credit***
5,683 6,151
Total production cost* (US$) of copper per pound
after by-products credits***
2.58 2.79
Cash production cost** (US$) per tonne of copper 6,695 6,727
Cash production cost** (US$) per pound of copper 3.04 3.05
Cash production cost** (US$) of copper per tonne
after by-products credit***
3,281 3,712
Cash production cost** (US$) of copper per pound
after by-products credits***
1.49 1.68

* Production costs include expenditures incurred at the mine sites for the activities related to production including mining, processing, mine site G&A and royalties etc.
** Non-IFRS measure
*** By-products credit refers to the sales of gold and silver during the corresponding period.

  • Successful 2012 drill program at the Jiama Mine upgraded a significant amount of its inferred resource to the measured and indicated ("M&I") resources. As a result, the total M&I resources increased to 1,053.1 million tonnes, containing 4.64 million tonnes of copper.
  • Preliminary feasibility study for the Jiama Mine has been completed. Jiama's processing capacity will grow nearly 7 times from 6,000 tonnes per day ("tpd") in 2012 to 40,000 tpd in 2016. By 2016, copper production expected to reach approximately 176,400,000 pounds up from its 2012 level of 25,820,417 pounds. Estimated capital expenditure for this expansion is US$705 million. The after-tax NPV of the project is US$1.24 billion at a 9% discount rate.
  • Sufficient permanent power supply to satisfy full expansion capacity of the Jiama Mine has been secured by connecting the mine to the recently completed DC Qinghai-Tibet Power Grid Interconnection Project ("QTPGI").

Dr. Xin Song, CEO of the Company, commented, "We are very pleased with the operational progress on both mines. Record production was achieved for the fifth consecutive year at the CSH gold mine. The Jiama Copper Polymetallic Mine achieved its second full year of increasing production. This higher production and improvements on both mines translated into combined revenue growth for the company. There is more growth and progress to come in 2013 and in the future. With our strong balance sheets, two growing and profitable mines, a diverse portfolio of high-quality potential acquisitions, powerful partnership with China National Gold, and with the skills and expertise of our management and employees China Gold International is in a superb position to keep delivering on our goals. We believe that our employees are the key to our global growth and success. I would like to thank all members of our team at China Gold International. Your remarkable efforts and commitment has ensured another good year for the company. We greatly appreciate our board and shareholders as well, who continue to believe in and support us in our efforts."

The Company - 2013 outlook

  • Expected production of 145,000 ounces of gold from the CSH Mine in 2013.
  • Expected production of 26.5 million pounds of copper from the Jiama Mine in 2013.
  • At CSH, the Company is building a new 30,000 tpd stand-alone crushing, heap leaching and ADR (Absorption, Desorption and Refining) plant system in addition to the existing 30,000 tpd facility. Expansion construction is expected to be completedin the fourth quarter of 2013, at which time the first ore is to be placed on the leach pad in the fourth quarter of 2013.
  • The Company expects to complete the Jiama Mine's Phase II Independent Feasibility Study and to release an updated NI43-101 compliant report in the second quarter of 2013.
  • Jiama's production capacity expansion will be done in two stages. Stage one, planned for completion during the fourth quarter of 2013, includes completion of a new 20,000 tpd mill. Stage two is expected to be completed by 2014. By 2015, Jiama is expected to reach its planned full capacity of 40,000 tpd of ore.
  • The Company plans to drill approximately 30,000 meters at the Jiama Mine during 2013.
  • The Company will continue to leverage the technical and operating experience of the Company's controlling shareholder, China National Gold Group Corporation ("CNG"), to improve operations at its mines, increase production and minimize costs.
  • To fulfill its growth strategy, the Company is continually working with CNG and other interested parties to identify potential international mining opportunities, mainly outside of China, which can be readily and quickly brought into production with the possibility of further expansion through continued exploration.

Community Involvement and Awards

Both CSH and Jiama continue to be recognized for adhering to the highest standards of occupational health, production safety and environmental protection.

On December 17, 2012, Mr. Jerry Xie, China Gold International's Executive Vice President and Corporate Secretary, co-chaired a Canadian Cancer Society charity event. As a gold-level sponsor of the event, China Gold International helped raise over $228,000 for the Canadian Cancer Society.

On December 12, 2012, the Jiama Mine, was selected to enter the "2012 Global Compact China Network Yearbook" by the Global Compact China Network. This honor recognized Company's ongoing efforts to improve social responsibility and sustainable development and cooperation with local community.

On December 12, 2012, Mr. Xin Song, the Company's CEO, received an award as one of the "Influential Figures of Chinese Non-ferrous Metals Industry in 2012" by China Non-ferrous Metals Industry Association. The award recognizes Mr. Song's achievements in the reorganization of resources, international strategy, market development, technological innovation and fulfilling corporate social responsibilities since he became the CEO of China Gold International Resources in 2009.

Global Conference Call to Discuss Year-End 2012 Results

Management will hold a global conference call from Hong Kong on March 27th, 2013 at 7 a.m. (Hong Kong time) or March 26th, 2013 at 4:00 p.m. (Pacific Time). During the call the Year-End 2012 results and performance will be discussed and the question and answer period will be held.

Analysts, investors, media and general public are encouraged to dial in and ask questions.

Dial-In Instructions:

Country Toll Free Number Toll Number Access Code
Canada 1855 790 8866 +1647 426 9158 218227#
USA 1866 9789970 +1 85 57532229 218227#
China 8008 0361 03 400 681 6405
400 658 8165
Hong Kong 3027 5500 +852 3027 5500 218227#
United Kingdom 0800 279 7785 +4420 3651 4806 218227#
Singapore 8001 206 122 +65 3157 6419 218227#

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-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).

For a detailed look at the financial statements and MD&A for the year ended December 31, 2012, please visit the Company's website at www.chinagoldintl.com, The Stock Exchange of Hong Kong Limited's website at www.hkex.com.hk or SEDAR at www.sedar.com.

For additional information:

Elena M. Kazimirova
Investor Relations Manager and Financial Analyst
+1.604.695 5031
Email: [email protected]
Website: www.chinagoldintl.com

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.