MAC/20: Mines and Communities

Continental Minerals To Develop Xiangcun Copper-gold Mine In Tibet

Published by MAC on 2007-05-28
Source: Interfax China Metals

Continental Minerals to develop Xiangcun copper-gold mine in Tibet

The Continental Minerals Corporation's Xiangcun copper-gold deposit in Tibet is due to start development in the near future, a source close to the situation said Thursday. Continental Minerals is a publicly-traded mining company based in Canada, and is a member of Hunter Dickson Inc., a Canadian private company providing geological, engineering, executive and administrative services to its 10 company members.

The Xiangcun project, which has an estimated life span of 12 years, has proven reserves of 220 million tons of porphyry copper-gold, with an estimated annual output of 50,000 tons of copper metal, over 6 tons of gold and 60 tons of silver, HDI's chief representative in China, Jonathon Guo, said at the Western China Mining Summit 2007, held in Sichuan, the provincial capital of Chengdu.

The Xiangcun copper-gold project is situated approximately 240 kilometers west of the Tibetan capital of Lhasa, in Continental Mineral's Xietongmen copper-gold mining site. The Xiangcun copper project has a total investment of $450 million and is wholly owned by Continental Minerals through its subsidiaries Highland Mining Inc. and Tibet Tian Yuan Minerals Exploration Ltd. with Gansu Jinchuan Group as a strategic partner, Guo said. Being the largest nickel producer in China, Jinchuan Group entered into a framework agreement with Continental Minerals in February of this, which includes two signed memorandums of understanding for a copper concentrate off-take for the Xietongmen project and project capital financing. Jinchuan Group will probably increase its interests in Continental Minerals to 12 percent in the near future.

Prospecting began at the Xietongmen mining site in 2005, with all drill holes registering positive for porphyry copper at a maximum of 1.00 percent copper equivalent, which has led to the expansion of the mine site from an initial 12 square kilometers to a current 120 square kilometers.

In 2006, an additional site, named Newtongmen, was discovered 3 kilometers from the Xietongmen site and contains similar amounts of porphyry copper reserves. Guo commented that the Xietongmen site has excellent metallurgy, with copper continuity in excess of 90 percent, and does not require cyanide for copper recovery. The site has excellent logistic links, being only 3 kilometers from a paved road, and rail links, including the Tibet-Xinjiang railway, which are due to be fully completed by the time the mine commences operation.

During 2007, Continental Minerals intends to complete the feasibility study and obtain a mining license for the Xietongmen project, as well as list on the Hong Kong Stock Exchange and carry out 10,000 meters of drilling in the Newtongmen site.

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