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China Gold International Resources Provides Preliminary 2012 Operating, Production and Exploration Highlights and 2013 Outlook

January 29, 2013

VANCOUVER, January 29, 2013 - China Gold International Resources Corp. Ltd. (TSX: CGG; HKEx: 2099) (the "Company") is pleased to provide a preliminary report on 2012 operating, production and exploration progress on both of its mines and share its goals for 2013. 

2012 Expected Production, Operating and Drilling Highlights

  • Gold production from the CSH mine increased by 4.4% from 133,541 ounces in 2011 to 139,443 ounces in 2012. This growth is partially due to finer size of crushed ore to the leach pad, increased average flow of leaching solution, improved carbon absorption and higher recoveries.
  • Cumulative gold recovery at CSH has been steadily increasing over the last few years: from 39% in 2010, to 46% in 2011, and to over 51% by the end of 2012.
  • Mine expansion feasibility study to double CSH mine's processing capacity to 60,000 tpd has been completed in November of 2012. Gold production will nearly double from its 2012 level of 139,443 ounces to about 260,000 ounces in 2015. Estimated capital expenditure for the expansion is US$213 million. The expanded CSH mine is expected to generate US$1.25 billion of undiscounted cash flow over 11 years of mine life. The after-tax NPV of the project is US$642 million at a 9% discount rate.
  • Copper production from the Jiama mine increased by 20% from 21,563,193 pounds in 2011 to 25,821,000 pounds in 2012. This is the second full year of increasing production for the Jiama mine.
  • 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 tpd in 2012 to 40,000 tpd in 2016. By 2016, copper production expected to reach 176,400,000 pounds up from its 2012 level of 25,821,000. Expected capital expenditure for this expansion is US$705 million. The expanded Jiama mine is expected to generate more than US$3.6 billion of undiscounted cash flow over its 31 year mine life. 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, "During 2012, we have achieved significant progress with operating efficiency, production growth and strong financial results. Our future priority is to timely advance our existing mines to their full production potential, identify accretive M&A opportunities and deliver positive returns to local communities and our shareholders".

2013 Production and Operating Guidance and Drilling Plans

The Company's outlook for 2013 remains positive with the objective of building new capacity, increasing production at its operating mines and acquiring additional projects with support from the Company's largest shareholder and the largest gold producer in China, China National Gold Group Corporation. 

Jiama - 2013 outlook

After successfully completing 40,496 meters of drilling in 2012, the Jiama mine is actively engaging in the recommended work set out in the pre-feasibility report. The company expects to complete the feasibility study and release the 43-101 report in the second quarter of 2013. The feasibility study will incorporate additional work completed in 2012 and 2013, including new drillings completed in 2012, additional geological structure study, geotechnical and geo-hydrological studies for open pit slope deign, and further metallurgical test to fine tune the floatation process.

In 2013, the Company plans to drill about 30,000 meters at a cost of approximately US$9.5 million. Main goals of the 2013 drilling program are:

  • further delineating the South Pit ore body to define a potentially larger final pushback
  • infill drilling to further define main high grade ore body in current underground mining area
  • further delineating the gold deposit discovered in 2012 on the east side of the South Pit
  • either confirming the area for waste dump (condemnation drilling) or identifying if there is a potential for another hornfels open pit
  • testing porphyry anomaly on the Bayi Ranch exploration license area from 2012 geochemistry analysis

Jiama's production capacity will grow in 2 stages. At the completion of stage 1, in Q4 of 2013, the new mill is expected to be able to handle the capacity of 20,000 tpd of ore. 

Stage 2 production facilities expansion will be completed by 2015. By 2016, Jiama is expected to reach its full capacity of 40,000 tpd of ore. 

Jiama's expansion will be financed through project's cash flows and through securing debt facilities from banks in China.

In 2013, Jiama is expected to mine and process 1.8 million tonnes of ore, producing about 26,500,000 pounds of copper, 9,000 ounces of gold, and 800,000 ounces of silver. The stripping ratio is expected to be 3.8. 

CSH - 2013 outlook 

CSH is building a new 30,000 tpd stand-alone crushing, heap leaching and ADR plant system in addition to the existing 30,000 tpd facility. The new plant will be similar to the existing one but instead of using the C160 jaw crushers, a new gyratory primary crusher will be used.

This expansion construction is expected to be completed in Q4 of 2013. First ore from this new facility is expected to be placed on the leach pad in Q4 of 2013 as well. 

The 2013 gold production at CSH is expected to be about 145,000 ounces.

CSH's expansion is self-financed through the project's cash flows. 

Community Involvement and Awards

Both CSH and Jiama continue to be awarded for harmonious mine and community development plans and promoting 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, 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.

Final Year-End 2012 Results and Conference Call

China Gold International will report its Year-End 2012 Results at the end of March, 2013 and the results will be available on the company's website and SEDAR. In connection with the release, management will hold a conference call to discuss year-end results and performance. The Company will provide further details about precise timing of the release date and the call at a later date.

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 China. CGG'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 additional information:

Elena Kazimirova
Investor Relations Manager and Financial Analyst 
Tel: +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.