The Jiama deposit is a structurally controlled stratiform skarn-type copper-polymetallic system. The majority of high grade mineralisation is associated with shear zone contacts between the Duodigou and Linbuzong formations and shear related folding. The zone of mineralisation within fault hosted skarn alteration measures kilometres in both strike and dip and remains open at depth to the northeast.

Mineralisation is also associated with granite porphyry dykes intruding the ‘Duodigou Marble’ and observed within the overlying hornfels of the Linbuzong Formation.

Although both deposit types are of lower grade than that of the skarn, the hornfels style of mineralisation may potentially be of further economic value in the future.

Three types of copper-polymetallic mineralisation are recognised in the project area, these include skarn, hornfels and porphyry hosted deposits.

High grade copper-polymetallic mineralisation is associated with skarn type alteration within shear zone contacts between the Duodigou and Linbuzong formations. This stratiform fault zone is tabular to lenticular in shape, has a variable dip, strikes west-northwest and hosts the primary lode.

The mineralised body itself has a 60° near surface dip angle which flattens to an average dip of 10° with depth. Thicknesses vary between 2 m to 240 m, averaging 33 m, its strike length is approximately 2,400 m and its length down dip ranges between 150 to 1,900 m. It is primarily divided into two zones of mineralisation; the Niumatang Zone and the Jiama Zone. A number of smaller, lenticular shaped skarn-type mineralised bodies have also been identified below and to the southeast of the primary body, however they are generally discontinuous and of limited strike (<200 m) and thickness.

Copper mineralisation shares associations with chalcopyrite, bornite and chalcocite and is hosted by either thin veinlets, as disseminated sulphide crystals or as massive sulphide zones.

Hornfels hosted mineralisation is of lower grade than that of the skarn type deposits and occurs predominantly as disseminated sulphides. Mineralisation is fine grained and consists of copper in association with chalcopyrite, bornite and molybdenum. No massive sulphide zones or veining has been recognised within the texturally massive and highly fractures rock mass. Earlier observations of copper associated with pyrite and pyrrhotite coating fracture planes has been attributed to secondary enrichment.

The mineralised body shows no preferential orientation, it is shallow, tabular shaped and approximately 1,200 m in length, 1,000 m wide and generally 10 to 50 m thick, although a maximum thickness of 826 m was intercepted in drillhole ZK3216. It pinches out in the westsouthwest and in general is thinner towards both the west-northwest and east-southeast.

Mineralisation in porphyritic granodiorite and monzogranite is characterised by molybdenum with lesser amounts of chalcopyrite and bornite. Sulphides are medium to coarse grained and confined to a thin horizontal pipe shaped body with a maximum known thickness of 476 m. The porphyritic host lies beneath the Duodigou Formation and appears intruded into the sheared contact between the two basement units.

Conventional mining methods have been proposed for the open pit and underground operations.

China Gold currently mine the Jiama deposit as an open pit and underground mine and intend to continue and expand both operations. The Jiama underground workings are currently accessed via declines and adits, with future plans to include a conveyor drive for ore haulage, vertical shaft for waste haulage and decline expansion for improved access. The current mining activity is limited to hand-held air leg mining for both development and stoping.

Conventional selective mining methods using truck and shovel are planned to be employed to extract the mineralised material from the proposed open pits. Mining is planned to occur on shallow flitches, typically 3m to 4m high, which will enable better grade control of the mineralised zones.

The open pits are the Jiaoyan and South Pit. The Jiaoyan pit will be mined in two stages and South pit four stages.

Mining of Phase II will commence in two open pits and an extensive underground mine including; Jiaoyan Pit, South Pit and the underground mine respectively. The open pits and underground expansion will be developed simultaneously. The Open pits will be separated from the underground operation by a crown pillar that will be maintained between the base of South Pit and the upper Underground Mine. Stope voids will be progressively backfilled beneath the base of the pit floor to reduce the potential for open pit and underground mine interaction. The two underground mining methods considered in this area are cut & fill mining and sub-level caving. The area under the pit is not planned to be designed in the initial 10 years of operation. The pit should be finished by this time which would make sub-level caving a possible option here.

Huatailong No. 1 Plant:

China Gold will operate the two site processing plants and prov de comprehensive technical support across all facets of the operation.

The 6,500 tpd Huatailong processing plant commenced operation in 2010, and was designed to treat both Copper-Molybdenum and Copper Molybdenum-Lead-Zinc ores. For treatment of the copper-molybdenum ores, only the flotation cells installed to separate lead from copper concentrates are not in operation, and if the Mo content is too low to be economic, the coppermolybdenum separation flotation circuit is shutdown.

Currently, Copper-Molybdenum ore from the Tongquianshan and Niumatang open cut mines is being treated. The molybdenum content of these ores is too low to be economic and only copper concentrate containing gold and silver credits is being produced, through a conventional beneficiation circuit suitable for treatment of the skarn ore.

For treatment of Copper-Molybdenum-Lead-Zinc ore, ........