VANCOUVER, CANADA -- Jinshan Gold Mines Inc. (TSX: JIN) is pleased to announce that gold production from the CSH Gold Mine in China has reached 13,926 gold doré ounces, or 10,143 ounces of gold, since the company commenced operations on July 29th. Silver makes up approximately 30% of each doré bar. All production at Jinshan's CSH gold mine is un-hedged and sold at the prevailing Shanghai Gold Exchange price, which closely tracks the London Gold Fixing price. Jinshan's most recent shipment of gold was sold at a price of approximately US$749 per ounce.
With mine production now underway, Jinshan is focusing on advancing its other corporate milestones over the next several months. In particular, Jinshan has two drill programs underway and is conducting brown-field exploration work along a nine kilometre potential extension to the known mineralized zone at the CSH gold mine. In summary, the following initiatives are progressing and are expected to be completed by the end of 2007 or early in 2008.
CSH Gold Mine Operational Milestones:
- Continued ramp up of production to nameplate capacity of approximately 10,000 ounces of gold per month;
- Reserve update to include recent drilling and mineralized material from the Southwest zone; and
- Expansion study to potentially increase the mine production from approximately 120,000 ounces of gold per year to 180,000 ounces per year.
Exploration Milestones:
- Global resource update at the CSH gold mine based on approximately 11,000 metres of drilling expected in 2007;
- Results from brown-field exploration work along a nine kilometre potential extension to the main gold bearing zone at the CSH gold mine; and
- New resource estimate at the Dadiangou project in Gansu province based on approximately 11,500 metres of drilling expected in 2007.
Operational Discussion
Steady progress has been made towards reaching design capacity of the mine. Mining is going well with 3.2 million tonnes of ore placed on the leach pad. Leaching is progressing efficiently with flow of pregnant solution to the process plant at 85% of design capacity. Gold recovery to carbon is over 50% (approximately 150 ounces per day) and improving. The CSH gold mine is in line to become the fourth largest gold producer in China.
"This is the company's first mine, and a very significant undertaking in a remote part of China. We are very pleased to have successfully opened this mine and to see this kind of progress in such a short time with no major problems identified," said Cal McKee, Jinshan's Chief Operating Officer. "We are confident that we will achieve full commercial production in the next few months, and we are already looking at ways to increase the production."
CSH Gold Mine Exploration
In addition to mining activities, significant advances have been made at the CSH gold mine by Jinshan's exploration group. The previously announced 5,000-metre, near-mine exploration drilling campaign has more than doubled in scope with approximately 11,000 metres currently drilled or planned for the remainder of 2007. At the Southwest zone, drilling has focused on extending the strike length of the known resource and upgrading some of the Inferred resources to the Measured and Indicated categories. At the Northeast zone, a drill program is underway beneath the currently planned open-pit. Drill holes have tested the zone approximately 100 to 150 metres below previous drilling with the goal of defining additional resources below the current reserves. Updated resource estimates for the Southwest and Northeast zones are expected to be completed at the beginning of 2008.
Outside of the known deposits at the CSH gold mine, a detailed grid rock-sampling program is underway to test for additional gold mineralization in the highly prospective near-mine environment. Sampling has covered a nine kilometre strike-length targeting mapped extensions of the host stratigraphy. Significantly anomalous areas will be followed up with large-scale trenching and/or drilling.
Dadiangou Exploration and Resource Delineation
At the Dadiangou project, Jinshan is pleased to report that the previously announced 5,000 metre, Phase II diamond drill program has been expanded to 6,500 metres. The additional metres will be used to test the Dadiangou North Anomaly and for additional infill drilling in the central portions of the Dadiangou Main Zone. Phase II drilling is expected to be completed in early November at which point Jinshan will have completed approximately 11,500 metres in 48 holes this year. A resource estimate will be prepared for the Dadiangou Main Zone once final results are received and reviewed and is expected early in the new year.
Qualified Persons
Cal McKee, Jinshan's Chief Operating Officer and a qualified person as defined by National Instrument 43-101 supervised the scientific and technical disclosure in this news release regarding the CSH (217) project.
Keith Patterson, Jinshan's Vice President of Exploration and a qualified person as defined by National Instrument 43-101, supervised the scientific and technical disclosure in this news release regarding the Dadiangou and CSH exploration projects.
About Jinshan
Jinshan is a Canadian mining company focused on the start of commercial production at the CSH Gold Mine in China. In addition, the company is actively exploring its portfolio of gold exploration properties and continues to evaluate additional gold opportunities.
Investors: Deanna Kress +1.604. 609.0598 / Media: Bob Williamson: +1.604. 609.0598
Email: [email protected] Website: www.jinshanmines.com
Forward-Looking Statements: Statements in this release that are forward-looking statements, including the expected increase in gold production at the CSH 217 Project, the results of an ongoing engineering study at the CSH 217 Project, the improvement of gold recovery to carbon, the potential resource and reserve estimates on the CSH 217 Project, the timing for completion of the Phase II drilling and a potential resource estimate at the Dadiangou Project, and ongoing exploration programs are subject to various risks and uncertainties concerning the specific factors disclosed under the heading "Risk Factors" and elsewhere in the company's MD&A, financial statements and other periodic filings with Canadian securities regulators. Such information contained herein represents management's best judgment as of the date hereof based on information currently available. When used in this document, words such as "could", "planning", "estimate", "expect", "intend", "may", "potential", "should", and other similar expressions are forward looking statements. The company does not assume the obligation to update any forward-looking statement.
