Pre-Feasibility Study for the Phase II Expansion of the Jiama Project

Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and 

Hong Kong Securities Clearing Company Limited take no responsibility for the contents of this 

announcement, make no representation as to its accuracy or completeness and expressly disclaim 

any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any 

part of the contents of this announcement. 

CHINA GOLD INTERNATIONAL RESOURCES CORP. LTD. 

(a company incorporated under the laws of British Columbia, Canada with limited liability) 

(Hong Kong Stock code: 2099) 

(Toronto Stock code: CGG) 

Pre-Feasibility Study for the Phase II Expansion of the Jiama Project 

Vancouver -Nov. 20, 2012 - China Gold International Resources Co. Ltd. (TSX: CGG, HK: 

2099) (the "Company") is pleased to announce the final results of an updated NI 43-101 

compliant, independent pre-feasibility study for the Phase II Expansion of its Jiama 

Copper-Polymetallic Mine, (the “Jiama Project”) in the Tibet Autonomous Region, China. 

The pre-feasibility study was completed by Minarco-MineConsult (MMC), part of the Runge 

Limited Group of Companies, in conjunction with independent consulting engineers and 

management. 

Please see below for more details. 

Hong Kong, November 21, 2012 

By order of the Board 

China Gold International Resources Corp. Ltd. 

Mr. Sun, Zhaoxue 

Chairman 

As of the date of this announcement, the executive Directors of the Company are Mr. Sun, 

Zhaoxue, Mr. Song, Xin, Mr. Wu, Zhanming and Mr. Jiang, Xiangdong, the non-executive 

Director is Mr. Liu, Bing and the independent non-executive Directors of the Company are 

Mr. He, Ying Bin Ian, Mr. Chen, Yunfei, Mr. Hall, Gregory Clifton and Mr. Burns, John King. 

______ 

Tel: 604-609-0598 Fax: 604-688-0598 E-mail: info-chinagoldintl@chinagoldintl.com, www.chinagoldintl.com

China Gold International Resources Corporation 

Limited 

Jiama Copper-Polymetallic Project 

Metrorkongka County, Tibet Autonomous Region 

People’s Republic of China 

FINAL 

Pre-Feasibility Study Technical Report 

Qualified Person: 

Mr. Jeremy Clark, Principal Consulting Geologist (MAIG) 

Mr. Anthony Cameron (FAUSIMM) 

Dr. Andrew Newell (MAusIMM (CP) 

Effective date of this report: 12 th of November 2012 

Project No. ADV-HK-03709 

ADV-HK-03709 China Gold Tibet Jiama Gold NI 43-101_PFS_signed 

This report has been prepared for the sole use of China Gold and must be read in its entirety and is subject to the 

third party disclaimer clauses contained in the body of this report.

DATE AND SIGNATURE 

Jeremy Lee Clark 

Room 2101, Tower A, Ping An International Financial Centre 

No. 3 Xinyuan South Road, Chaoyang District, 

Beijing 100027, China 

Phone: +86 10 6410 4800 

jclark@runge.com.au 

I, Jeremy Lee Clark, am working as a Geologist for Minarco-MineConsult, of Room 2101, Tower A, Ping An International 

Financial Centre No. 3 Xinyuan South Road, Chaoyang District Beijing 100027, China. This certificate applies to the Pre- 

Feasibility Study Technical Report on the Jiama Copper-Polymetallic Project, Metrorkongka County, Tibet Autonomous 

Region, China, prepared for China Gold International Resources Corporation Limited dated 12 th of November 2012 (the 

“Technical Report”), do hereby certify that: 

1. I am a registered member of the Australian Institute of Geoscientists (“AIG”). 

2. I am a graduate of the Queensland University of Technology and hold a B App Sc in Geology, which was awarded in 

2001. In addition, I am a graduate of Edith Cowan University in Australia and hold a Graduate Certificate in Geostatistics, 

which was awarded in 2006. 

3. I have been continuously and actively engaged in the assessment, development, and operation of mineral projects 

since my graduation from university in 2001. During my professional career I have gained a wide range of experience in 

resource estimation techniques including at least 5 years actively working in metasomatic sedimentary type deposits 

which have similar styles of mineralisation to the Mineral Resource. This experience includes working and estimating 

resources both in underground and open pit operations in Western Australia, including the Saint Barbara gold operations 

at Southern Cross from 2001-2006, the gold Leonora operations in 2006 and the Jaguar mine (Pb-Zn-Ag) during his work 

with Jabiru mines in 2007. During this time Jeremy completed internal estimations (not public release) for the Marvel 

Loch, Golden Pig, Blue Haze, Jaccoleti, Nevoria, Jaguar, and Gwalia Deeps deposits, which have similar style of 

mineralisation to the skarn type mineralisation that host the mineralisation within the Project. As a Runge employee since 

2007 to the present, I have worked on numerous epithermal base and precious metals deposit throughout the world 

including China, Central Asia, Europe, Africa, and North and South America. This work has included resource estimation 

of deposits which have similar styles of mineralisation to the Jiama deposit. All of these deposits were estimated in 

accordance with the JORC Code (Australia, Africa, Europe and Asia) or the NI-43.3-101 code (Canada, and South 

America) and resulted in public releases or Technical Reports, of which Jeremy was a Component or Qualified person and 

are available on the Australian Stock Exchange (ASX) or the Toronto Stock Exchange (TSX). 

4. I am a Qualified Person for the purposes of the National Instrument 43-101 of the Canadian Securities Administrators 

(“Ni 43-101”). 

5. I inspected the Jiama Copper-Polymetallic Project during the week of 29 th April 2012 for 3 days. 

6. I am responsible for the preparation and supervision and final editing of all portions of the Technical Report. 

7. I have had no prior involvement with the properties that are the subject of the Technical Report. 

8. To the best of my knowledge, information and belief, the Technical Report contains all scientific and technical 

information that is required to be disclosed to make the Technical Report not misleading. I am not aware of any material 

fact or material change with respect to the subject matter of the Technical Report that is not reflected in the Technical 

Report, the omission to disclose which makes the Technical Report misleading. 

9. I am independent of China Gold International Resources Corporation Limited in accordance with the application of 

Section 1.4 of NI 43-101. 

10. I have read NI 43-101 and Form 43-101F1 and the Technical Report has been prepared in compliance with that 

instrument and form. 

11. I consent to the filing of the Pre-Feasibility Study Technical Report with any stock exchange or any other regulatory 

authority and any publication by them for regulatory purposes, including electronic publication in the public company files 

on their website and accessible by the public, of the Technical Report. 

Dated at Beijing, China, this 12 th of November, 2012 

“Jeremy Lee Clark” (QP) 




Anthony Robert Cameron 




Phone: +86 10 6410 4800 

tony@cameronmining.com 

I, Anthony Robert Cameron, am working as a Mining Engineer sub-contracted to Minarco-MineConsult, of Room 2101, 

Tower A, Ping An International Financial Centre No. 3 Xinyuan South Road, Chaoyang District Beijing 100027, China. 

This certificate applies to the Pre-Feasibility Study Technical Report on the Jiama Copper-Polymetallic Project, 

Metrorkongka County, Tibet Autonomous Region, China, prepared for China Gold International Resources Corporation 

Limited dated 12 th of November 2012 (the “Technical Report”), do hereby certify that: 

1. I am a Fellow of The Australian Institute of Mining and Metallurgy (“AUSIMM”). 

2. I am a graduate of the Queensland University and hold a BE (Mining), which was awarded in 1988. In addition, I have 

been awarded a Graduate Diploma in Business by Curtin University in Western Australia as well as a Masters in 

Commercial Law by Melbourne University. 

3. I have been continuously and actively engaged in the assessment, development, and operation of mineral projects 

since my graduation from university in 1988. As an independent mining consultant for the past 8 years, I have completed a 

range of projects including technical valuations, life-of-mine designs and scheduling, pit optimisation, development of 

economic models, mine reserves estimation and reporting. Prior to becoming a mining consultant Tony worked with a 

number of underground and open cut mining companies in coal and metalliferous mines in various roles. My management 

roles included Area Manager for Macmahon Contractors, Mining Manager for Tiwest, and open cut Mining Superintendent 

for Sons of Gwalia and St Barbara Mines. 


(“Ni 43-101”). 

5. I inspected the Jiama Copper-Polymetallic Project during the week of 29 th April 2012 for 3 days. 

6. I am responsible for the supervision and final review of Chapter 15, 16, 21 and 22 of the Pre-Feasibility Study Technical 

Report. 







Section 1.4 of NI 43-101. 

10. I have read NI 43-101 and Form 43-101F1 and the Technical Report has been prepared in compliance with that 





Dated at Beijing, China, this 12 th of November, 2012 

“Anthony Robert Cameron” (QP) 




Andrew James Haigh Newell 

Level 12, 333 Ann Street 

Brisbane, Queensland 

Australia, 4000 

Phone: +61 7 3100 7200 

andrew.newell@pincock.com 

I, Andrew James Haigh Newell, am working as a Processing Engineer (Executive Consultant) for Pincock, Allen and Holt 

(fully owned by Runge Ltd), of Level 12, 333 Ann Street, Brisbane, Queensland, Australia, 4000. This certificate applies to 

the Pre-Feasibility Study Technical Report on the Jiama Copper-Polymetallic Project, Metrorkongka County, Tibet 

Autonomous Region, China, prepared for China Gold International Resources Corporation Limited dated 12 th of 

November, 2012 (the “Technical Report”), do hereby certify that: 

1. I am a Chartered Professional with the Australasian Institute of Mining and Metallurgy (“MAusIMMCP (Met)”) and a 

Chartered Professional of the Institute of Engineers, Australasia (“MIEA CP”). 

2. I am a graduate of the University of Melbourne (Australia) and hold a B. E. (1st Class Honours) in Metallurgical 

Engineering, which was awarded in 1976. Additionally, I am a post graduate of the same institution in M.Eng. Sc. (Mineral 

Processing), which was awarded in 1985 and hold a doctorate (PhD, Mineral Processing) from the University of Cape 

Town (South Africa), which was awarded in 2008. 

3. I have been continuously and actively engaged in the assessment, development, and operation of mineral processing 

projects since 1978. 

4. I have worked on a large number of relevant projects in various technical and review capacities over this period in 

copper, copper-molybdenum and copper-lead-zinc. 


(“NI- 43-101”). 

6. I am responsible for the preparation and the supervision and final editing of Chapter 13 and 17 of the Pre-Feasibility 

Study Technical Report. 







Section 1.4 of NI-43-101. 

10. I have read NI-43-101 and Form 43-101F1 and the Technical Report has been prepared in compliance with that 





Dated at Brisbane, Australia, this 12 th of November, 2012 

“Andrew James Haigh Newell” (QP) 




Page i 

TABLE OF CONTENTS 

1 EXECUTIVE SUMMARY .........................................................................................................................1 

1.1 INTRODUCTION ....................................................................................................................................1 

1.2 SCOPE AND TERMS OF REFERENCE ......................................................................................................1 

1.3 STATEMENT OF MINERAL RESOURCES ..................................................................................................2 

1.4 STATEMENT OF MINERAL RESERVES ....................................................................................................3 

1.5 PROJECT SUMMARY ............................................................................................................................4 

1.6 RECOMMENDATIONS ............................................................................................................................6 

1.7 OPPORTUNITIES AND RISKS .................................................................................................................7 

2 INTRODUCTION AND TERMS OF REFERENCE ..................................................................................9 

2.1 BACKGROUND .....................................................................................................................................9 

2.2 TERMS OF REFERENCE ........................................................................................................................9 

2.3 SOURCE OF INFORMATION ....................................................................................................................9 

2.4 COMPETENT PERSON AND RESPONSIBILITY ..........................................................................................9 

2.5 LIMITATIONS AND EXCLUSIONS .......................................................................................................... 10 

2.6 RESPONSIBILITY AND CONTEXT OF THIS REPORT ............................................................................... 11 

2.7 INTELLECTUAL PROPERTY ................................................................................................................. 11 

2.8 MINING FACTORS ............................................................................................................................. 11 

2.9 CAPABILITY AND INDEPENDENCE ....................................................................................................... 11 

3 RELIANCE ON OTHER EXPERTS ...................................................................................................... 13 

4 PROPERTY DESCRIPTION AND LOCATION .................................................................................... 14 

4.1 PROJECT LOCATION.......................................................................................................................... 14 

4.2 PROPERTY OWNERSHIP .................................................................................................................... 14 

5 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY 19 

5.1 PROJECT ACCESS ............................................................................................................................. 19 

5.2 GEOGRAPHY AND CLIMATE ............................................................................................................... 19 

5.3 LOCAL RESOURCES AND INFRASTRUCTURE ....................................................................................... 19 

6 HISTORY ............................................................................................................................................... 20 

6.1 PRE-2008 ........................................................................................................................................ 20 

6.2 2008 - ONWARDS .............................................................................................................................. 20 

7 GEOLOGICAL SETTING AND MINERALISATION ............................................................................. 21 

7.1 REGIONAL GEOLOGY ........................................................................................................................ 21 

7.2 PROJECT GEOLOGY .......................................................................................................................... 21 

7.3 MINERALISATION .............................................................................................................................. 21 

8 DEPOSIT TYPES .................................................................................................................................. 25 

9 EXPLORATION..................................................................................................................................... 26 

9.1 PRE-1991 ........................................................................................................................................ 26 

9.2 1991-2000 ...................................................................................................................................... 26 

9.3 2008 -2011 ..................................................................................................................................... 26 

10 DRILLING .............................................................................................................................................. 27 

10.1 BRIGADE 6 DRILLING IN THE 1990’S ................................................................................................... 27 

10.2 HUATAILONG DRILLING POST 2007 .................................................................................................. 27 

10.3 DISCUSSION ..................................................................................................................................... 27 

11 SAMPLE PREPARATION, ANALYSES AND SECURITY .................................................................. 29 

11.1 SAMPLING METHOD AND APPROACH .................................................................................................. 29 

11.2 SAMPLE PREPARATION AND ANALYSIS ............................................................................................... 29 

12 DATA VERIFICATION .......................................................................................................................... 30 


This Report has been prepared for the sole use of China Gold and must be read in its entirety and is subject to 

the third party disclaimer clauses contained in the body of this Report.

Page ii 

12.1 QUALITY CONTROL DATA FOR 2011 DRILLING .................................................................................... 30 

12.2 DATA QUALITY REVIEW ..................................................................................................................... 30 

12.3 DATA VERIFICATION STATEMENT ....................................................................................................... 30 

13 MINERAL PROCESSING AND METALLURGICAL TESTING ........................................................... 32 

13.1 MINERALOGY .................................................................................................................................... 32 

13.2 METALLURGICAL TESTING ................................................................................................................. 33 

13.3 HORNFELS HOSTED LOWER MO GRADE ORE ..................................................................................... 36 

13.4 COPPER-LEAD-ZINC ORE METALLURGICAL TESTING .......................................................................... 37 

14 MINERAL RESOURCE ESTIMATES ................................................................................................... 40 

14.1 DATA ............................................................................................................................................... 40 

14.2 GEOLOGY AND RESOURCE INTERPRETATION...................................................................................... 42 

14.3 PREPARATION OF WIREFRAMES ........................................................................................................ 42 

14.4 SAMPLE STATISTICS ......................................................................................................................... 42 

14.5 DEPOSIT STATISTICS ........................................................................................................................ 43 

14.6 METALS CORRELATION ..................................................................................................................... 47 

14.7 HIGH GRADE CUTS ........................................................................................................................... 47 

14.8 GEOSPATIAL ANALYSIS ..................................................................................................................... 47 

14.9 RESOURCE ESTIMATION .................................................................................................................... 50 

14.10 MINERAL RESOURCE STATEMENT ..................................................................................................... 53 

14.11 COPPER EQUIVALENT CALCULATION RESOURCES .............................................................................. 54 

14.12 DILUTION AND ORE LOSSES .............................................................................................................. 54 

15 MINERAL RESERVE ESTIMATES ...................................................................................................... 55 

15.1 MINERAL RESERVE ESTIMATION PARAMETERS ................................................................................... 55 

15.2 MINERAL RESERVE ESTIMATION PROCEDURE .................................................................................... 55 

15.3 MINERAL RESERVE ESTIMATE ........................................................................................................... 57 

15.4 COPPER EQUIVALENT CALCULATION RESERVES ................................................................................ 58 

15.5 COMMENTS ...................................................................................................................................... 58 

16 MINING METHODS .............................................................................................................................. 60 

16.1 MINE PLANNING PROCESS ................................................................................................................ 61 

16.2 MINING METHOD............................................................................................................................... 61 

16.3 OPTIMISATION – OPEN CUT............................................................................................................... 68 

16.4 OPTIMISATION – UNDERGROUND ....................................................................................................... 70 

16.5 MINE DESIGN ................................................................................................................................... 72 

16.6 MINE DEVELOPMENT STRATEGY ........................................................................................................ 75 

16.7 PRODUCTION SCHEDULE................................................................................................................... 76 

16.8 MINE LIFE ........................................................................................................................................ 80 

16.9 MINING EQUIPMENT .......................................................................................................................... 80 

16.10 CROWN PILLAR ................................................................................................................................ 82 

16.11 GEOTECHNICAL ................................................................................................................................ 83 

16.12 WATER/HYDROLOGICAL .................................................................................................................... 83 

16.13 MINING LEASES ................................................................................................................................ 83 

17 RECOVERY METHODS ....................................................................................................................... 84 

17.1 INTRODUCTION ................................................................................................................................. 84 

17.2 EXISTING MINERAL PROCESSING PLANT ............................................................................................ 84 

17.2.1 COPPER-LEAD-ZINC PILOT PLANT ..................................................................................................... 88 

17.3 PROPOSED MINERAL PROCESSING PLANT ......................................................................................... 91 

18 PROJECT INFRASTRUCTURE ........................................................................................................... 97 

18.1 MINE SERVICES ................................................................................................................................ 97 

18.2 CONSUMABLES, MATERIALS AND FUEL SUPPLY .................................................................................. 97 

18.3 TAILINGS STORAGE FACILITIES .......................................................................................................... 98 

19 MARKET STUDIES AND CONTRACTS .............................................................................................. 99 

20 ENVIRONMENTAL STUDIES, PERMITTING AND SOCIAL OR COMMUNITY IMPACT ................ 105 




Page iii 

20.1 ENVIRONMENT ................................................................................................................................ 105 

20.2 COMMUNITY ................................................................................................................................... 105 

20.3 OCCUPATIONAL HEALTH AND SAFETY .............................................................................................. 105 

21 CAPITAL AND OPERATING COSTS ................................................................................................ 106 

21.1 CAPITAL COSTS – MINING .......................................................................................................... 107 

21.2 OPERATING COSTS – MINING ..................................................................................................... 108 

21.3 CAPITAL COSTS – PROCESSING .................................................................................................. 110 

21.4 OPERATING COSTS – PROCESSING ........................................................................................... 111 

22 ECONOMIC ANALYSIS ..................................................................................................................... 114 

23 ADJACENT PROPERTIES ................................................................................................................. 117 

24 OTHER RELEVANT DATA AND INFORMATION ............................................................................. 118 

24.1 PROJECT RISK SUMMARY ............................................................................................................... 118 

25 INTERPRETATION AND CONCLUSIONS ........................................................................................ 121 

25.1 GEOLOGY....................................................................................................................................... 121 

25.2 MINING .......................................................................................................................................... 121 

25.3 PROCESS ....................................................................................................................................... 122 

25.4 ECONOMICS ................................................................................................................................... 123 

26 RECOMMENDATIONS ....................................................................................................................... 124 

26.1 GEOLOGY....................................................................................................................................... 124 

26.2 MINING .......................................................................................................................................... 124 

26.3 PROCESSING .................................................................................................................................. 125 

26.4 COSTS/ECONOMIC ANALSYSIS ........................................................................................................ 126 

27 REFERENCES .................................................................................................................................... 127 

28 ANNEXURE A – QUALIFICATIONS AND EXPERIENCE ................................................................. 128 

29 ANNEXURE B- GLOSSARY .............................................................................................................. 131 

30 ANNEXURE C – BASE CASE ECONOMIC MODEL......................................................................... 136 




Page iv 

LIST OF TABLES 

TABLE 1-1 JIAMA COPPER-POLYMETALLIC PROJECT - CU, MO, PB AND ZN MINERAL RESOURCES REPORTED AT A 0.3 % CU-EQ* CUT OFF GRADE 

AS AT 28 TH APRIL 2012 ......................................................................................................................................................................... 2 

TABLE 1-2 JIAMA COPPER-POLYMETALLIC PROJECT – AU AND AG MINERAL RESOURCES REPORTED AT A 0.3% CU-EQ* CUT OFF GRADE (>0.02 

AU G/T) AS AT 28 TH APRIL 2012. ............................................................................................................................................................ 2 

TABLE 1-3 JIAMA COPPER-POLYMETALLIC PROJECT STATEMENT OF NI 43-101 MINERAL RESERVE ESTIMATE AS AT 28 TH APRIL 2012 ................. 3 

TABLE 1-4 JIAMA COPPER-POLYMETALLIC PROJECT – LIFE OF MINE OPERATING COSTS (USD/ T PROCESSED) .................................................. 6 

TABLE 4-1 JIAMA COPPER-POLYMETALLIC PROJECT – MINING LICENCE C5400002010073210070276. .......................................................... 15 

TABLE 4-2 JIAMA COPPER-POLYMETALLIC PROJECT – MINING LICENCE C5400002011113220119758. .......................................................... 15 

TABLE 4-3 JIAMA COPPER-POLYMETALLIC PROJECT – EXPLORATION LICENCE T54520080702010972. .......................................................... 15 

TABLE 4-4 JIAMA COPPER-POLYMETALLIC PROJECT – EXPLORATION LICENCE T54520080702010972. .......................................................... 15 

TABLE 12-1 JIAMA COPPER-POLYMETALLIC PROJECT – INTERNAL AND EXTERNAL DUPLICATE SAMPLES FOR THE PROJECT .............................. 30 

TABLE 13-1 JIAMA COPPER-POLYMETALLIC PROJECT - COMPOSITE ASSAYING ............................................................................................... 32 

TABLE 13-2 JIAMA COPPER-POLYMETALLIC PROJECT - CU-MO ORE PROCESSING RESULTS SUMMARY ........................................................... 33 

TABLE 13-3 JIAMA COPPER-POLYMETALLIC PROJECT - LOCKED CYCLE TESTING RESULTS ............................................................................. 34 

TABLE 13-4 JIAMA COPPER-POLYMETALLIC PROJECT - PLANT VALIDATION TESTING RESULTS ......................................................................... 34 

TABLE 13-5 JIAMA COPPER-POLYMETALLIC PROJECT - CONCENTRATE ASSAYS ............................................................................................. 35 

TABLE 13-6 JIAMA COPPER-POLYMETALLIC PROJECT - LOCKED CYCLE TESTING RESULTS ............................................................................. 35 

TABLE 13-7 JIAMA COPPER-POLYMETALLIC PROJECT - DIFFERENTIAL FLOTATION VERIFICATION TESTING RESULTS ......................................... 36 

TABLE 13-8 JIAMA COPPER-POLYMETALLIC PROJECT - LOCKED CYCLE TESTING RESULTS FOR LOWER GRADE MO ORE .................................. 37 

TABLE 13-9 JIAMA COPPER-POLYMETALLIC PROJECT - ALL RECYCLE WATER LOCKED CYCLE TESTING ........................................................... 38 

TABLE 13-10 JIAMA COPPER-POLYMETALLIC PROJECT - LOCKED CYCLE TESTS (DIFFERENTIAL FLOTATION) .................................................... 38 

TABLE 13-11 JIAMA COPPER-POLYMETALLIC PROJECT – VALIDATION LOCKED CYCLE TESTS (BULK FLOTATION) .............................................. 38 

TABLE 13-12 JIAMA COPPER-POLYMETALLIC PROJECT - DIFFERENTIAL FLOTATION PILOT TESTING RESULTS ................................................... 39 

TABLE 14-1 JIAMA COPPER-POLYMETALLIC PROJECT - SUMMARY OF DATA USED IN RESOURCE ESTIMATE. ..................................................... 40 

TABLE 14-2 JIAMA COPPER-POLYMETALLIC PROJECT – BULK DENSITY BY ROCK TYPE ................................................................................... 40 

TABLE 14-3 JIAMA COPPER-POLYMETALLIC PROJECT - DESCRIPTIVE STATISTICS FOR THE PROJECT ............................................................... 44 

TABLE 14-4 JIAMA COPPER-POLYMETALLIC PROJECT – METALS CORRELATION MATRIX. ................................................................................. 47 

TABLE 14-5 JIAMA COPPER-POLYMETALLIC PROJECT - HIGH GRADE CUTS APPLIED TO SKARN COMPOSITES ................................................... 47 

TABLE 14-6 JIAMA COPPER-POLYMETALLIC PROJECT - INTERPRETED SKARN VARIOGRAPHY PARAMETERS ...................................................... 48 

TABLE 14-7 JIAMA COPPER-POLYMETALLIC PROJECT - BLOCK MODEL PARAMETERS ...................................................................................... 50 

TABLE 14-8 JIAMA COPPER-POLYMETALLIC PROJECT - BLOCK MODEL SEARCH PARAMETERS ......................................................................... 51 

TABLE 14-9 JIAMA COPPER-POLYMETALLIC PROJECT - COMPARISON OF BLOCK ESTIMATES AND COMPOSITES ................................................ 52 

TABLE 14-10 JIAMA COPPER-POLYMETALLIC PROJECT - CU, MO, PB AND ZN MINERAL RESOURCES REPORTED AT A 0.3 % CU EQUIVALENT CUT 

OFF GRADE AS AT 28 TH APRIL 2012 .................................................................................................................................................... 53 

TABLE 14-11 JIAMA COPPER-POLYMETALLIC PROJECT – AU AND AG MINERAL RESOURCES REPORTED AT A 0.3% CU EQUIVALENT CUT OFF 

GRADE (>0.02 AU G/T), AS AT APRIL 2012. ......................................................................................................................................... 53 

TABLE 14-12 JIAMA COPPER-POLYMETALLIC PROJECT – COPPER EQUIVALENCE PARAMETERS MINERAL RESOURCES ..................................... 54 

TABLE 15-1 JIAMA COPPER-POLYMETALLIC PROJECT – STATEMENT OF NI 43-101 MINERAL RESERVE ESTIMATE AS AT 28 TH APRIL 2012........... 57 

TABLE 15-2 JIAMA COPPER-POLYMETALLIC PROJECT – COPPER EQUIVALENCE PARAMETERS MINERAL RESERVES .......................................... 58 

TABLE 16-1 JIAMA COPPER-POLYMETALLIC PROJECT – MINING SUMMARY ..................................................................................................... 60 

TABLE 16-2 JIAMA COPPER-POLYMETALLIC PROJECT – MINE PLANNING SUMMARY ........................................................................................ 61 

TABLE 16-3 JIAMA COPPER-POLYMETALLIC PROJECT – OPEN CUT PIT SUMMARY .......................................................................................... 62 

TABLE 16-4 JIAMA COPPER-POLYMETALLIC PROJECT – ORE HAULAGE, CRUSHING, STOCKPILING SUMMARY FOR THE OPEN PIT MINES ............. 64 

TABLE 16-5 JIAMA COPPER-POLYMETALLIC PROJECT – DUMP CAPACITIES .................................................................................................... 64 

TABLE 16-6 JIAMA COPPER-POLYMETALLIC PROJECT – UNDERGROUND SUMMARY ........................................................................................ 65 

TABLE 16-7 JIAMA COPPER-POLYMETALLIC PROJECT – OPEN CUT OPTIMISER PHYSICAL CONSTRAINTS .......................................................... 68 

TABLE 16-8 JIAMA COPPER-POLYMETALLIC PROJECT – RECOVERY FACTORS ................................................................................................ 69 

TABLE 16-9 JIAMA COPPER-POLYMETALLIC PROJECT – OPEN CUT COST RATES USED FOR OPTIMISATION ....................................................... 69 

TABLE 16-10 JIAMA COPPER-POLYMETALLIC PROJECT – METAL PRICE ASSUMPTIONS .................................................................................... 69 

TABLE 16-11 JIAMA COPPER-POLYMETALLIC PROJECT – UNDERGROUND OPTIMISER PHYSICAL CONSTRAINTS ................................................ 70 

TABLE 16-12 JIAMA COPPER-POLYMETALLIC PROJECT – UNDERGROUND COST RATES USED FOR OPTIMISATION ............................................. 71 

TABLE 16-13 JIAMA COPPER-POLYMETALLIC PROJECT – UNDERGROUND COST RATES USED FOR OPTIMISATION ............................................. 71 

TABLE 16-14 JIAMA COPPER-POLYMETALLIC PROJECT – OPEN CUT MINE DESIGN PARAMETERS .................................................................... 72 

TABLE 16-15 JIAMA COPPER-POLYMETALLIC PROJECT – BREAKDOWN OF MEASURED AND INDICATED MATERIAL WITHIN FINAL OPEN PIT DESIGNS 

........................................................................................................................................................................................................ 72 

TABLE 16-16 JIAMA COPPER-POLYMETALLIC PROJECT – UNDERGROUND MINE DESIGN PARAMETERS ............................................................. 74 

TABLE 16-17 JIAMA COPPER-POLYMETALLIC PROJECT – PERCENTAGE BREAKDOWN THAT EACH UNDERGROUND MINING METHOD CONTRIBUTES 

TO PRODUCTION ................................................................................................................................................................................ 75 

TABLE 16-18 JIAMA COPPER-POLYMETALLIC PROJECT – BREAKDOWN OF MEASURED AND INDICATED MATERIAL WITHIN UNDERGROUND DESIGNS 

........................................................................................................................................................................................................ 75 

TABLE 16-19 JIAMA COPPER-POLYMETALLIC PROJECT – HISTORICAL PRODUCTION ........................................................................................ 76 

TABLE 16-20 JIAMA COPPER-POLYMETALLIC PROJECT – PRODUCTION SCHEDULE ......................................................................................... 78 

TABLE 16-21 JIAMA COPPER-POLYMETALLIC PROJECT – MINE LIFE FOR INDIVIDUAL MINES ............................................................................. 80 

TABLE 16-22 JIAMA COPPER-POLYMETALLIC PROJECT – TONGQIANSHAN AND NIUMATANG EQUIPMENT LIST.................................................... 81 

TABLE 16-23 JIAMA COPPER-POLYMETALLIC PROJECT – JIAOYAN AND SOUTH PIT EQUIPMENT LIST ................................................................ 81 

TABLE 16-24 JIAMA COPPER-POLYMETALLIC PROJECT – UNDERGROUND MINE EQUIPMENT LIST .................................................................... 82 

TABLE 17-1 JIAMA COPPER-POLYMETALLIC PROJECT - PROCESSING PLANT OVERVIEW .................................................................................. 84 

TABLE 17-2 JIAMA COPPER-POLYMETALLIC PROJECT –EQUIPMENT LIST- HUATAILONG FLOTATION PLANT ....................................................... 87 

TABLE 17-3 JIAMA COPPER-POLYMETALLIC PROJECT – PROCESSED ORE FROM VARIOUS MINING SITES ......................................................... 88 

TABLE 17-4 JIAMA COPPER-POLYMETALLIC PROJECT –CURRENT PRODUCTION PERFORMANCE ...................................................................... 88 

TABLE 17-5 JIAMA COPPER-POLYMETALLIC PROJECT – EQUIPMENT LIST- HUATAILONG PILOT PLANT .............................................................. 89 

TABLE 17-6 JIAMA COPPER-POLYMETALLIC PROJECT – PROPOSED PROCESSING PLANT OVERVIEW ................................................................ 91 




Page v 

TABLE 17-7 JIAMA COPPER-POLYMETALLIC PROJECT – EQUIPMENT LIST- PROPOSED FLOTATION PLANT ......................................................... 94 

TABLE 17-8 JIAMA COPPER-POLYMETALLIC PROJECT – EXPECTED AVERAGE PRODUCTION PERFORMANCE ..................................................... 95 

TABLE 17-9 JIAMA COPPER-POLYMETALLIC PROJECT – THEORETIC CU RECOVERIES-FEED GRADE RELATIONSHIP........................................... 95 

TABLE 17-10 JIAMA COPPER-POLYMETALLIC PROJECT – 2011 MONTHLY FEED GRADE AND RECOVERY RELATIONSHIP .................................... 96 

TABLE 19-1 JIAMA COPPER-POLYMETALLIC PROJECT – PAYMENT DISCOUNT FOR CONTAINED CONCENTRATE METALS TO BENCHMARK SPOT METAL 

PRICE ............................................................................................................................................................................................... 99 

TABLE 19-2 JIAMA COPPER-POLYMETALLIC PROJECT – MMC FORWARD PRICING ........................................................................................ 101 

TABLE 21-1 JIAMA COPPER-POLYMETALLIC PROJECT – LIFE OF MINE OPERATING COSTS (USD/ T PROCESSED) ............................................ 106 

TABLE 21-2- JIAMA COPPER-POLYMETALLIC PROJECT – SUNKEN CAPITAL COSTS (PHASE I) (KUSD) ............................................................ 107 

TABLE 21-3 JIAMA COPPER-POLYMETALLIC PROJECT – LIFE OF MINE CAPITAL COSTS (PHASE II) (KUSD) ..................................................... 107 

TABLE 21-4 JIAMA COPPER-POLYMETALLIC PROJECT – PROPOSED PROCESSING PLANTS CAPITAL EXPENDITURE .......................................... 110 

TABLE 21-5 JIAMA COPPER-POLYMETALLIC PROJECT – PROCESSING OPERATING COSTS SUMMARY (INCLUDING DEPRECIATION AND 

MAINTENANCE) ................................................................................................................................................................................ 111 

TABLE 21-6 JIAMA COPPER-POLYMETALLIC PROJECT – HISTORICAL PROCESSING PLANT OPERATING COST .................................................. 111 

TABLE 21-7 JIAMA COPPER-POLYMETALLIC PROJECT – PROPOSED PROCESSING PLANTS OPERATING COST ................................................. 112 

TABLE 21-8 JIAMA COPPER-POLYMETALLIC PROJECT – PROPOSED PROCESSING PLANTS OPERATING COST ................................................. 112 

TABLE 21-9 JIAMA COPPER-POLYMETALLIC PROJECT – FORECAST CU-PB-ZN OPERATING COST .................................................................. 113 

TABLE 22-1 JIAMA COPPER-POLYMETALLIC PROJECT – REVENUE ASSUMPTIONS EXCLUSIVE OF VAT ............................................................ 114 

TABLE 22-2 JIAMA COPPER-POLYMETALLIC PROJECT – CAPITAL EXPENDITURE OVER THE LIFE OF MINE ......................................................... 114 

TABLE 22-3 JIAMA COPPER-POLYMETALLIC PROJECT – ECONOMIC ANALYSIS RESULTS ................................................................................ 114 

TABLE 22-4 JIAMA COPPER-POLYMETALLIC PROJECT – PROJECT SENSITIVITY PRICE SENSITIVITY (POST-TAX NPV AT A 9% DISCOUNT FACTOR) 

...................................................................................................................................................................................................... 115 

TABLE 24-1 JIAMA COPPER-POLYMETALLIC PROJECT – RISK ASSESSMENT TABLE ....................................................................................... 118 

TABLE 24-2 JIAMA COPPER-POLYMETALLIC PROJECT – PROJECT RISK SUMMARY ........................................................................................ 119 

TABLE 30-1 JIAMA COPPER-POLYMETALLIC PROJECT –ECONOMIC MODELLING INPUT RECOVERIES BY ORE TYPE .......................................... 136 

TABLE 30-2 JIAMA COPPER-POLYMETALLIC PROJECT –BASE CASE ECONOMIC MODELLING RESULTS (POST-TAX) ......................................... 137 

TABLE 30-3 JIAMA COPPER-POLYMETALLIC PROJECT –BASE CASE MINING SCHEDULE SUMMARY ................................................................. 138 




Page vi 

LIST OF FIGURES 

FIGURE 4-1 JIAMA COPPER-POLYMETALLIC PROJECT – GENERAL LOCATION MAP .......................................................................................... 17 

FIGURE 4-2 JIAMA COPPER-POLYMETALLIC PROJECT –DETAILED LOCATION MAP. .......................................................................................... 18 

FIGURE 7-1 JIAMA COPPER-POLYMETALLIC PROJECT – REGIONAL GEOLOGY MAP ......................................................................................... 22 

FIGURE 7-2 JIAMA COPPER-POLYMETALLIC PROJECT – GENERALISED TYPICAL CROSS SECTION ..................................................................... 24 

FIGURE 10-1 JIAMA COPPER-POLYMETALLIC PROJECT – DRILL HOLE LOCATION PLAN ................................................................................... 28 

FIGURE 12-1 JIAMA COPPER-POLYMETALLIC PROJECT –INTERNAL AND EXTERNAL DUPLICATES 2011 ............................................................. 31 

FIGURE 14-1 JIAMA COPPER-POLYMETALLIC PROJECT - HISTOGRAM OF BULK DENSITIES BY ROCK TYPE ........................................................ 41 

FIGURE 14-2 JIAMA COPPER-POLYMETALLIC PROJECT – RAW SAMPLE LENGTHS. .......................................................................................... 43 

FIGURE 14-3 JIAMA COPPER-POLYMETALLIC PROJECT - HISTOGRAM PLOTS FOR CU AND MO BY TYPE ............................................................ 45 

FIGURE 14-4 JIAMA COPPER-POLYMETALLIC PROJECT - LOG PROBABILITY FOR CU AND MO BY TYPE .............................................................. 46 

FIGURE 14-5 JIAMA COPPER-POLYMETALLIC PROJECT – GRAPHICAL REPRESENTATION OF SKARN SEMI-VARIOGRAM MODEL. .......................... 49 

FIGURE 16-1 JIAMA COPPER-POLYMETALLIC PROJECT – SITE PLAN .............................................................................................................. 63 

FIGURE 16-2 JIAMA COPPER-POLYMETALLIC PROJECT – UNDERGROUND MINE PLAN LAYOUT ......................................................................... 66 

FIGURE 16-3 JIAMA COPPER-POLYMETALLIC PROJECT – OPEN CUT OPERATIONS AND UNDERGROUND OPERATIONS ....................................... 67 

FIGURE 16-4 JIAMA COPPER-POLYMETALLIC PROJECT – OPEN CUT PIT DESIGNS .......................................................................................... 73 

FIGURE 16-5 JIAMA COPPER-POLYMETALLIC PROJECT – PRODUCTION SCHEDULE PER MINING AREA .............................................................. 79 

FIGURE 17-1 JIAMA COPPER-POLYMETALLIC PROJECT – MINERAL PROCESSING FLOWSHEET ......................................................................... 85 

FIGURE 17-2 JIAMA COPPER-POLYMETALLIC PROJECT LEAD-ZINC PILOT PLANT PROCESSING FLOWSHEET ..................................................... 90 

FIGURE 17-3 JIAMA COPPER-POLYMETALLIC PROJECT - MINERAL PROCESSING FLOWSHEET .......................................................................... 92 

FIGURE 19-1 JIAMA COPPER-POLYMETALLIC PROJECT – HISTORIC BENCHMARK CU SPOT PRICE .................................................................... 99 

FIGURE 19-2 JIAMA COPPER-POLYMETALLIC PROJECT – HISTORIC BENCHMARK AU SPOT PRICE .................................................................. 100 

FIGURE 19-3 JIAMA COPPER-POLYMETALLIC PROJECT – HISTORIC BENCHMARK AG SPOT PRICE .................................................................. 100 

FIGURE 19-4 JIAMA COPPER-POLYMETALLIC PROJECT – FORWARD BENCHMARK SPOT CU PRICE MMC VS FS STUDY ..................................... 101 

FIGURE 19-5 JIAMA COPPER-POLYMETALLIC PROJECT – FORWARD BENCHMARK SPOT MO PRICE MMC VS FS STUDY .................................... 102 

FIGURE 19-6 JIAMA COPPER-POLYMETALLIC PROJECT – FORWARD BENCHMARK SPOT ZN PRICE MMC VS FS STUDY ..................................... 102 

FIGURE 19-7 JIAMA COPPER-POLYMETALLIC PROJECT – FORWARD BENCHMARK SPOT PB PRICE MMC VS FS STUDY ..................................... 103 

FIGURE 19-8 JIAMA COPPER-POLYMETALLIC PROJECT – FORWARD BENCHMARK SPOT AU PRICE MMC VS FS STUDY ..................................... 103 

FIGURE 19-9 JIAMA COPPER-POLYMETALLIC PROJECT – FORWARD BENCHMARK SPOT AG PRICE MMC VS FS STUDY ..................................... 104 

FIGURE 21-1 OPERATING CASH COST BREAKDOWN PER TONNE OF ORE PROCESSED .................................................................................... 106 

FIGURE 21-2 JIAMA COPPER-POLYMETALLIC PROJECT – MINING CAPITAL COSTS KUSD ............................................................................... 108 

FIGURE 21-3 JIAMA COPPER-POLYMETALLIC PROJECT – MINING COST / TONNE ORE ................................................................................... 109 

FIGURE 22-1. JIAMA COPPER-POLYMETALLIC PROJECT – BASE CASE NPV ANALYSIS, 9% DISCOUNT FACTOR ............................................... 115 

FIGURE 22-2 JIAMA COPPER-POLYMETALLIC PROJECT – ECONOMIC SENSITIVITIES ...................................................................................... 116 




Page 1 

1 EXECUTIVE SUMMARY 

1.1 INTRODUCTION 

Runge Asia Limited (“RAL”), trading as Minarco-MineConsult (“MMC”), was requested by China Gold International 

Resources Corporation Limited (“China Gold”, the “Client” or the “Company”) to complete a Pre-Feasibility Study 

Technical Report (“PFS” or the “Report”) for the Phase II expansion of the Jiama Copper-Gold Project (“Project” or 

“Relevant Asset”) in the Tibet Autonomous Region, People’s Republic of China (“PRC”). The PFS meets the requirements 

of the Canadian National Instrument 43-101 (“NI 43-101”) of the Canadian Securities Administrators. 

China Gold is a Canadian mining company whose shares are dual listed on the Toronto Stock Exchange and Hong Kong 

Stock exchange. At the time of listing 39.95% of shares were publically held with the remainder of the shares held by 

Rapid Result (BVI) - (21.07%) and China National Gold Hong Kong - (38.95%) which is 100% owned by China National 

Gold (PRC). The Project is currently owned and operated by Tibet Huatailong Mining Development Company Limited 

(“Huatailong”), which is wholly owned by China Gold through a number of subsidiary companies. 

1.2 SCOPE AND TERMS OF REFERENCE 

This PFS includes a Mineral Resource and a Mineral Reserve estimate as defined in the NI 43-101 standards of 

disclosure for the Project. The level of accuracy of the overall PFS based on the various inputs which constitute the report 

is considered to be in the order of +/- 25%. Whilst areas of the PFS are at a much higher level of confidence MMC has 

assumed the lowest confidence when determining the overall PFS’s accuracy level. 

MMC’s technical team (“the Team”) consisted of Principal geologists, senior mining engineers, and process engineers. Mr 

Jeremy Clark (Geologist), Mr Tony Cameron (Mining Engineer), Mr Hongbo Liu (Mining Engineer) and Mr Jim Jiang 

(Processing Engineer) undertook a site visit to the Project for a period of 3 days beginning on the 29 th of April 2012 to 

familiarise themselves with site conditions. During the site visits, MMC had open discussions with the Company personnel 

on technical aspects relating to the Project. MMC found the personnel to be cooperative and open in facilitating MMC’s 

work. 

In addition to work undertaken to generate an independent estimate of Mineral Resource and Mineral Reserves, this 

Report relies largely on information provided by the Company, either directly from the site and other offices, or from 

reports by other organisations whose work is the property of the Company and MMC has found no reasons not to rely on 

this information. The data relied upon for the Mineral Resource estimate completed by MMC and contained in this Report, 

have been compiled primarily by the Company and reviewed by MMC and MMC has found no reason not to rely on this 

information. The Report specifically excludes all aspects of legal issues, marketing, commercial and financing matters, 

insurance, land titles and usage agreements, and any other agreements/contracts that the Company may have entered 

into. 

MMC does not warrant the completeness or accuracy of information provided by the Company, which has been used in 

the preparation of this PFS. 

In MMC’s opinion, the information provided by the Company was reasonable and nothing discovered during the 

preparation of the Report suggested that there was any significant error or misrepresentation in respect of that information 

and hence MMC has found no reason not to rely on this information. 

MMC has independently assessed the Relevant Asset by reviewing historical technical reports, drill hole databases, 

original sampling data, sampling methodology, engineering studies, future resource development plans, development 

potential, potential mining issues and metallurgical test work. All of this data supports the Mineral Resource and Mineral 

Reserve estimates. All opinions, findings and conclusions expressed in the Report are those of MMC and its specialist 

advisors. 




Page 2 

1.3 STATEMENT OF MINERAL RESOURCES 

MMC independently estimated the Mineral Resources contained within the Project, based on the data collected by the 

Company as at April, 2012. The Mineral Resource estimate and underlying data complies the guidelines provided in the 

NI 43-101, Standards of Disclosure for Mineral Projects, dated June 30, 2011. Therefore MMC believes it is suitable for 

public reporting and meets the reporting standards of Chapter 18 of the HKEx listing rules. The Mineral Resources 

estimates were completed by Mr. Jeremy Clark of MMC and are reported at a 0.3% Copper equivalent grade (“Cu-eq”), as 

referred to in Section 14.11. The results of the resource estimate for the Project are tabulated in Table 1-1 for Cu, Mo, Pb 

and Zn. 

During the review of the data MMC noted that whilst the mineralisation occurs all within a single mineralised body, Au and 

Ag mineralisation within the orebody had a significantly higher spatial variability than the other elements. As a result MMC 

has classified the Au and Ag resource presented in Table 1-2 separately; this classification takes into account the 

proposed large scale mining techniques where Au and Ag will only be credits to the overall products from the operations. 

MMC has assumed that Au and Ag will not be used as a single cut-off grade for a selected mining block and will be mined 

in conjunction with the other elements. 

The Mineral Resources are summarized in Table 1-1 and Table 1-2. The Mineral Resources presented in Table 1-2 for 

Au and Ag are inclusive and not in addition to the Mineral Resources in Table 1-1 and occur within the same mineralised 

body. 

Table 1-1 Jiama Copper-Polymetallic Project - Cu, Mo, Pb and Zn Mineral Resources reported at a 0.3 % Cu-eq* 

Cut Off Grade as at 28 th April 2012 

Rock Type 

Class 

Quantity 

Mt 

Cu % Mo % Pb % Zn % Cu Metal Kt 

Mo Metal 

Kt 

Pb Metal 

Kt 

Zn Metal Kt 

Skarn Measured 35.6 0.71 0.048 0.11 0.07 252 17 38 25 

Indicated 293.2 0.73 0.043 0.07 0.06 2,135 127 201 163 

M+I 328.8 0.73 0.044 0.07 0.06 2,388 144 239 187 

Inferred 174 0.6 0.045 0.16 0.08 1,036 79 286 146 

Hornfels Measured 38.4 0.28 0.035 0.04 0.01 107 14 14 5 

Indicated 626.1 0.31 0.031 0.01 0.01 1,952 196 66 64 

M+I 664.5 0.31 0.032 0.01 0.01 2,059 210 80 69 

Inferred 219 0.29 0.034 0.03 0.01 633 74 72 32 

Porphyr 

y 

Measured 2.1 0.22 0.056 0.01 0.01 5 1 0 0 

Indicated 57.7 0.33 0.043 0.01 0.01 188 25 4 6 

M+I 59.8 0.32 0.043 0.01 0.01 193 26 4 6 

Inferred 2.9 0.23 0.099 0.02 0.04 7 3 0 1 

Total Measured 76 0.48 0.042 0.07 0.04 364 32 52 30 

Indicated 977.1 0.44 0.036 0.03 0.02 4,275 348 271 232 

M+I 1,053.1 0.44 0.036 0.03 0.02 4,640 380 323 262 

Inferred 395.9 0.42 0.039 0.09 0.05 1,676 156 359 179 

Note: Figures reported are rounded which may result in small tabulation errors. 

Table 1-2 Jiama Copper-Polymetallic Project – Au and Ag Mineral Resources reported at a 0.3% Cu-eq* Cut Off 

Grade (>0.02 Au g/t) as at 28 th April 2012. 

Rock Type Class Quantity 

Au g/t Ag g/t Au M Oz Ag M Oz 

Skarn Indicated Mtonnes 256.5 0.31 17.01 2.537 140.290 

Inferred 117.0 0.39 16.50 1.472 62.077 

Hornfels Indicated 178.6 0.06 2.52 0.337 14.486 

Inferred 68.9 0.08 5.06 0.186 11.195 

Porphyry Indicated 15.7 0.24 8.22 0.121 4.145 

Inferred 0.4 0.11 10.79 0.001 0.128 

Total Indicated 450.8 0.21 10.97 2.995 158.921 

Inferred 186.2 0.28 12.26 1.659 73.400 





Page 3 

1.4 STATEMENT OF MINERAL RESERVES 

A Mineral Reserve estimate has been independently estimated as at 28 th April 2012 by MMC in accordance with the 

recommended guidelines of the NI 43-101 code. Table 1-3 presents the Mineral Reserve estimate for the Project reported 

at a 0.35% Cu-eq cut-off grade for the Ore extracted via open cut methods and 0.5 to 0.65% Cu-eq cut-off grade for the 

Ore extracted via underground methods. Details on the Cu-eq calculations used in the Mineral Reserves are outlined in 

Section 15.4. The Measured and Indicated Mineral Resources reported in the Statement of Mineral Resources were 

modified to produce the Mineral Reserve estimate. The Mineral Resources are inclusive of, and not additional to the 

Mineral Reserve. 

Table 1-3 Jiama Copper-Polymetallic Project Statement of NI 43-101 Mineral Reserve Estimate as at 28 th April 2012 

Grade 

Metals 

Type Cu Mo Au Ag Pb Zn Cu Mo Au Ag Pb Zn 

kt % % g/t g/t % % kt kt t t Kt kt 

Tongqianshan 

Proved - - - - - - - - - - - - - 

Probable 2,632 0.57 0.014 0.15 8.05 - - 15.0 0.37 0.39 21.2 - - 

Subtotal 2,632 0.57 0.014 0.15 8.05 - - 15.0 0.37 0.39 21.2 - - 

Waste 7,770 - - - - - - - - - - - - 

Strip Ratio* 2.95 - - - - - - - - - - - - 

Niumatang 

Proved - - - - - - - - - - - - - 

Probable 15,328 1.24 0.044 0.57 25.77 - - 189.5 6.74 8.78 394.9 - - 

Subtotal 15,328 1.24 0.044 0.57 25.77 - - 189.5 6.74 8.78 394.9 - - 

Waste 141,919 - - - - - - - - - - - - 

Strip Ratio* 9.26 - - - - - - - - - - - - 

South Pit 

Proved - - - - - - - - - - - - - 

Probable 38,231 0.93 0.021 0.22 20.90 - - 354.0 8.03 8.53 799.0 - - 

Subtotal 38,231 0.93 0.021 0.22 20.90 - - 354.0 8.03 8.53 799.0 - - 

Waste 233,346 - - - - - - - - - - - - 

Strip Ratio* 6.10 - - - - - - - - - - - - 

Jiaoyan 

Proved - - - - - - - - - - - - - 

Probable 146,017 0.42 0.016 0.03 1.11 - - 611.8 23.36 4.53 161.6 - - 

Subtotal 146,017 0.42 0.016 0.03 1.11 - - 611.8 23.36 4.53 161.6 - - 

Waste 224,620 - - - - - - - - - - - - 

Strip Ratio* 1.54 - - - - - - - - - - - - 

Underground (north) 

Proved 16,241 1.14 0.073 0.38 21.69 0.108 0.058 185.6 11.90 6.15 352.3 17.5 9.5 

Probable 113,158 1.10 0.049 0.42 20.61 0.039 0.033 1,241.9 55.30 47.60 2,332.1 44.5 37.0 

Subtotal 129,399 1.10 0.052 0.42 20.74 0.048 0.036 1,427.5 67.20 53.75 2,684.4 62.0 46.5 

Waste n/a - - - - - - - - - - - - 

Strip Ratio* n/a - - - - - - - - - - - - 

Underground (south) 

Proved 8,673 0.63 0.014 0.29 0.38 0.116 10.855 54.8 1.26 2.48 3.3 10.1 941.5 

Probable 23,190 0.67 0.016 0.09 10.82 0.094 0.125 155.1 3.76 2.05 251.0 21.8 28.9 

Subtotal 31,864 0.66 0.016 0.14 7.98 0.100 3.046 209.9 5.02 4.53 254.3 31.9 970.4 

Waste n/a - - - - - - - - - - - - 

Strip Ratio* n/a - - - - - - - - - - - - 

Total Reserves 

Proved 24,914 0.96 0.053 0.35 14.27 0.111 3.817 240.4 13.15 8.63 355.6 27.6 950.9 

Probable 338,556 0.76 0.029 0.21 11.70 0.020 0.019 2,567.3 97.57 71.88 3,959.8 66.4 65.9 

Total 363,470 0.77 0.030 0.22 11.87 0.026 0.280 2,807.7 110.72 80.50 4,315.4 94.0 1,016.9 


*Strip ratio units are waste tonne: ore tonne 




Page 4 

1.5 PROJECT SUMMARY 

 

 

 

 

 

 

 

 

 

The Project is located in Metrorkongka County, Tibet Autonomous Region, ehe PRC, approximately 68 linear km 

east-northeast of Lhasa, the capital city of Tibet and 3,600 km south west of Beijing. The Project can be accessed 

via highway G318 at a distance of 60 km from Lhasa, followed by an 8 km paved road, which connects the site 

offices, accommodation and Project area with the highway. Lhasa has daily international and domestic flights to a 

variety of destinations in addition to an operating rail network which connects Tibet to other provinces in China. 

The Project was first discovered in the early 1950’s with artisanal scale lead mining occurring within the area. 

Surface sampling and mapping was conducted over the area between 1951-1990 with modern exploration, 

inclusive of drilling completed between 1991 and 1999 by the No. 6 Geological Brigade. This work resulted in the 

issue of 4 mining licences to individual companies which produced ore at a small scale through both open cut and 

underground methods until April 2007. In April 2007 in accordance with an agreement between the Tibet 

government and China National Gold Group Corporation, the 4 mining licences, as well as the exploration licences 

in the surrounding areas, were consolidated into the reorganized Huatailong in late 2007, with China Gold Group 

HK as the primary shareholder. Production has been ongoing since re-commencement of mining in 2010 at a rate 

of 1.8 Mtpa ROM ore via two open cut pits, namely Tongqianshan and Niumatang. 

Huatailong completed four phases of exploration work between 2008 and 2011. In addition to the 145 surface 

diamond drill holes for a total of 47,443 m completed in 2008, Huatailong established survey control points using 

differential GPS instruments, based on the 1954 Beijing coordinate system and the 1956 Yellow Sea elevation 

system. A topographic survey on a 1:2,000 scale (2 m contours) over a total area of 13.8 sq.km was conducted by 

total stations, and the survey results were tied to the established survey control points. In 2009 a further 47 surface 

diamond drill holes for a total of 18,746 m were completed. These drill holes were generally infill drill holes, 

however additional step out drilling was complete to expand the defined resources. In 2010, Huatailong completed 

99 surface drill holes for a total of 49,613 m. These holes included both infill drilling and extension holes along 

strike and down dip. Following a review of these holes Huatailong completed an additional 22 infill drill holes in 

2011 within the proposed pit locations to enable detailed mine planning to be undertaken. These 22 surface 

diamond holes resulted in a total of 10,720 m being drilled and were the basis for updating of the Mineral 

Resources in 2012 and this PFS. MMC is aware further drilling is currently planned over the proposed South Pit 

which is aimed at upgrading the resource classification within the pit area. 

Stratigraphy outcropping in the Project area is dominated by clastic-carbonate rocks, including Upper-Jurassic 

Duodigou Formation limestones and marbles, Lower-Cretaceous Linbuzong Formation sandstones and slates, and 

Quaternary colluviums and alluviums, Mafic, intermediate to felsic dikes can be observed outcropping within the 

Project area and within drill holes, but no large intrusive bodies have yet been identified. It is suggested that a large 

granitic intrusive body exists at depth in the area and it has provided the intense heat source for the metamorphism 

and also the mineralizing solutions for the copper polymetallic mineralisation. Emplacement of the granitic intrusion 

would have resulted in metamorphism into marbles of a large portion of the Duodigou limestones, and the 

metamorphism into hornfels of Linbuzong clastic rocks. 

Three types of copper-polymetallic mineralisation are observed within the Project, these include Skarn, Hornfels 

and Porphyry hosted mineralisation. All three styles of mineralisation are structurally controlled with polymetallic 

mineral concentrations occurring along shear/structure zones. The mineralisation is offset by thrust and 

detachment faults and is associated with anticlines and synclines. Cu Mineralisation is mainly associated with the 

sulphide minerals chalcopyrite, bornite and chalcocite, which occur hosted by small sulphide veins, as 

disseminated sulphide crystals or massive sulphide zones. Molybdenum occurs as medium to coarse grained 

disseminated molybdenite predominantly within the porphyry and hornfels. 

MMC reviewed documentation for the sampling procedures, preparation, analysis, and security during their site 

visits in April 2012. From the review of the literature and documentation on the Project, MMC finds acceptable 

results from analytical work completed by previous operators who collected their samples according to standards 

and accepted practices at the time of the campaigns. Data has been reviewed by MMC by visiting a number of 

sampled locations in the field and evaluating the reported results against the mineralised rock observed in the field. 

The Company plans to operate four open cut mines, namely Tongqianshan, Niumatang, Jiaoyan and South Pit, 

and one underground mine, which is split into a north and south area. Phase I saw the development of the 

Tongqianshan and Niumatang open cut pits which have been in operation since 2010 and currently produce a 

combined rate of 1.8 Mtpa ROM ore. Under the Phase II expansion an additional 2 pits Jiaoyan and South Pit will 

be developed along with the underground mine. Until 2015 only open cut mining will be employed, however after 

2015 a combination of open cut and underground mining methods will be used. 

The mine life is estimated to be 31 years based on the Mineral Reserve. The Project at full production has a 

planned average mining production rate of 13.6 Mtpa ROM ore from 2016 to 2039. During the final years of the 

mine life, production will be ramped down. Although during 2016 and 2019 production is planned exceed 13.6 

Mtpa, MMC considers this achievable based on proposed equipment and processing plant capacity. 

Over the life of the mine open cut mining methods will extract 202.2 Mt of ROM ore while the underground mining 

methods will extract 161.3 Mt of ROM ore. Life of mine average ROM ore annual production rate from 2012 is 

planned to be 6 Mtpa and 6.3 Mtpa from open cut and underground respectively. During the earlier years of the 




Page 5 

mine life, mining will focus on skarn ore, however as the mining progresses more hornfels and porphyry hosted ore 

will be targeted. The metals that are to be extracted by the Project are copper, molybdenum, gold, silver, lead and 

zinc. Copper is the primary economic metal. 

 

 

 

 

 

 

 

 

 

Contractors will be used to undertake all mining activities. Open cut mining will use conventional truck and 

excavator methods to mine the ore, while the underground methods consist of variations of open stoping and 

sublevel caving. 

Various ore pass systems underground will be used to transport crushed ore from the open pits and underground, 

via conveyor belt systems, to the ROM stockpiles on surface for use as feed material for the processing plants. 

The underground mine will be accessed via vertical shafts and a decline ramp for trackless equipment. While the 

open pit is still in operation a stoping method that employs a cemented fill will be utilised to maintain the stability of 

the open pit walls and floor. Upon completion of the open pit operations the sublevel caving (“SLC”) mining method 

will be used to mine the material contained in the crown pillar, which is located under the floor of the open pit. 

Although only preliminary geotechnical studies have been completed to date on the Project, observations during 

the site visit indicate no geotechnical issues have occurred since the re-commencement of mining in 2010. 

Although geological logging and geological modeling completed indicates that no significant changes occur at 

depth in regards to structural complexity and potential stability of the rocks, MMC has used conservative 

geotechnical parameters in the mining studies. MMC believes there will be no material change to the proposed life 

of mine plan for the Project with additional data, however further studies are recommended to be undertaken to 

confirm the parameters used. Any refinement of the parameters such as pit slope angles and underground stope 

sizes will enable mine optimization to be undertaken of both the short and long term plans of the Project. No 

significant hydrological issues have been identified for the planned open cut or underground operations. 

MMC notes that the mining licence does not cover the entire proposed mining areas, however these areas are 

covered by an exploration licence. Additionally, based on mine planning studies completed to date, there appears 

that the proposed dumping areas are insufficient to accommodate all planned life of mine waste material. MMC is 

however aware that there is sufficient suitable land within the Project area so as to allow the Company to secure 

sufficient dumping space through the application of a land usage permit, as required by local regulations. 

The current mineral processing plants developed during Phase I includes the operating Huatailong 1.8 Mtpa 

processing plant (capacity of 6,000 tpd of Cu-Mo-Pb-Zn ores) and a pilot processing plant (capacity of 600 tpd of 

Cu-Pb-Zn ores). The Huatailong processing plant started operation in 2010, while the pilot plant has been in 

existence at the site for many years since modification from an old processing plant. The existing Huatailong 

processing facility was designed for recovery of Cu, Pb, Zn, Au and Ag by bulk flotation, followed by Cu-Pb-Zn 

flotation circuit and Cu-Mo separation flotation circuit, finally producing separate Cu, Pb, Zn and Mo concentrates. 

The current operation, however, only treats the Cu-Mo ore which due to the Mo content only produces a Cu 

concentrate with Au and Ag credits. Mo separation is not economic at this time and therefore Mo is not separated 

or credited. 

As part of its Phase II expansion plans the Company proposes that a new Huatailong processing plant be 

constructed to treat the copper-molybdenum sulphide ores from Project. It is forecast that it will have an overall rate 

of 40 ktpd ROM (i.e. 12 Mtpa ROM of Cu-Mo ores) and commence production in 2014. Once commissioned for 

operation, the overall processing capacity for the Project will be 13.8 Mtpa for Cu-Mo ores. 

The forecast life-of-mine capital costs for the Project are 705.1 MUSD, which includes 221.3 MUSD for processing 

and 456.0 MUSD for mine capital. The capital costs for Phase II have been estimated by the Changsha Institute 

and were presented in its October 2011 draft Chinese Feasibility Study report for the Jiama Project. MMC has 

reviewed these cost estimates and considers them to be reasonable for the Project. The mining capital costs are 

estimated to have an accuracy of ± 25%. Greater variations in the estimated capital costs may occur if there are 

changes to the proposed mine plan. 

The life of mine operating costs for the Project have been estimated by the Changsha Institute and were presented 

in its October 2011 draft Chinese Feasibility Study report for the Jiama Project. The estimated costs are detailed in 

Table 1-4. MMC has reviewed these cost estimates and considers them to be reasonable for the Project. 

The life of mine average operating cash costs are USD 1.83/lb Cu or USD 1.62/lb Cu Equivalent taking into 

account the credits from other metals. 




Page 6 

Table 1-4 Jiama Copper-Polymetallic Project – Life of Mine Operating Costs (USD/ t processed) 

Cost Centre USD/t waste USD/t processed USD/lb Cu Equivalent 

Overburden Removal 2.09 6.30 

Open Cut Ore Mining 2.10 

Underground Mining 15.09 

Support 1.22 

Processing 

10.89(Cu/Mo) / 8.85(Cu/Pb/Zn) 

Administration & Other Overheads 4.28 

Total Mine Operating Costs/t processed 39.87 / 37.83 

Metal Selling and Transport 2.21 

Average royalty per ROM tonne 2.38 

VAT 3.65 

Total Project Operating Costs/t processed 48.10 / 46.06 1.58 / 2.26 

 

 

 

Average annual net cash flow of USD 120 M over the life of mine for a total undiscounted cumulative net cash flow 

of approximately USD 3,634 M. 

NPV (post-tax) analysis has been completed at 7%, 9% and 11% discount rates. The base case reserve economic 

model results were estimated at a discount rate of 9%. The cumulative discounted cash flow at 9% is equal to 

USD1,240 M with an internal rate of return (IRR) of 55%. The project has negative cash flows in the first 4 years, 

which is due to the large initial capital expenditure required to upgrade of processing plant, mining, engineering and 

other facilities. However, the NPV becomes positive in 2016 and increases in value thereafter. After 25 years cash 

flows are discounted heavily and there is no great value being added to the NPV. Sunken capital of USD 270k from 

the original Phase I project development is not included in this NPV analysis but depreciation flowing through from 

this capital has been allocated for in the NPV Analysis. The pre-tax cumulative discounted cash flow at 9% is equal 

to USD1,471 M with an internal rate of return (IRR) of 62%. 

Economic model sensitivity analysis was completed on (Cu, Mo, Ag, Au and Pb) metal prices as well as capital 

cost estimates and operating cost estimates. The results indicate that the Project is sensitive to variations in metal 

price, operating costs, grades, recoveries and capital costs, in that order. As copper is the majority revenue source 

for the Project, the Project is most sensitive to the copper price. 

1.6 RECOMMENDATIONS 

The recommendations are based on observations made by MMC during the completion of this PFS and review of the 

associated documentation. The key recommendations for the Project are outlined below, and are detailed (including the 

associated costs in Section 26). 

 

 

 

 

 

While the current mining operations are within licenced areas, the Company must obtain an expanded mining 

licence, both in terms of area and production rate, to ensure all proposed open cut and underground operations are 

within a mining licence boundary and adhere to licenced production throughput limits. The areas under 

consideration are currently covered by a valid exploration licence and under Chinese mining regulation there is a 

well-defined and regulated process by which an exploration licence is converted to a mining licence, with the 

Company having commenced this process already. The conversion process includes the requirement for the 

Company to complete a Chinese Feasibility Study before applying for conversion to a mining licence. Additionally, 

it is MMC’s understanding that under local regulations if the Company funds the bulk of the exploration costs, it will 

receive exclusive rights to convert the exploration licence to a mining licence upon completion of the Chinese 

Feasibility Study. Due to the above reasons, MMC believes that there is reasonable expectation that this 

conversion will happen in a timely fashion so as not to impact the Company’s plans. 

Complete infill drilling of the South Pit Inferred Resource area to upgrade the resource classification to Indicated. 

This is likely to facilitate the decreased waste mining of the south pit and allow for further optimisation of the mining 

schedule. 

Upon completion of current infill drilling underway by the company an update of the resource model should be 

undertaken to reflect the revised understanding on controls on mineralisation allowing for a further upgrade in 

resource classification. 

Incorporation of the grade control blast hole data into the resource model is likely to lead to an improved 

understanding of the short range grade variability of the deposit and associated minerals. MMC recommends that 

automatic splitting and sampling attachments be added to the current blast hole drill rig fleet to improve sampling 

quality, and that QAQC practices in line with international standards be introduces to the assaying so as to allow 

this dataset to be included in future resource estimates. 

Complete sterilisation drilling at the proposed location for Jiaoyan dump to ensure that potentially valuable 

mineralisation is not present in this area. 




Page 7 

 

 

 

 

 

 

 

Additional detailed mine planning studies are required to: 

o 

o 

o 

o 

o 

Confirm, optimize and improve pit designs, scheduling and equipment selection for South Pit and Jiaoyan 

(this will require further geotechnical work but this work has potential to improve project economics); 

Confirm final design parameters for South Pit and Jiaoyan, particularly those relating to the overall pit slope 

angle of 43°, which are considered conservative; 

Confirm final design parameters used for the underground mine (this will require further geotechnical work); 

Update the underground design to reflect the direct access of the south underground from the bottom of the 

South Pit open cut; and 

Confirm initial conclusions that open-cuts and underground can operate efficiently and safely in tandem. 

Upon completion of further detailed mine planning and processing studies, updates to the schedules as well as 

operating and capital cost forecasts should be undertaken to assess their impact on the Project value. 

Complete further metallurgical testing of both skarn and hornfels ores to improve the molybdenum and precious 

metal recoveries especially in lower grade ore. Additional Skarn samples should be collected from the deeper 

portions of the orebody especially in the underground to confirm recoveries. Testing of the hornfels ore, which are 

mostly located in the Jiaoyan pit area, will be focused on further refining the Cu-Mo separation. 

Due to molybdenum feed grade variability in the various ores especially above 0.02% Mo, further metallurgical 

studies are recommended to better optimize the recovery of Mo. Additionally further Cu-Mo separation flotation 

tests are needed to determine the suitability of reagent and Mo cut-off grades for processing lower grade Mo ores. 

Perform regular metallurgical testwork to optimise process performance, the nature of plant operation and the 

potential for operational and process improvements. 

Future testwork needs to establish the recoveries and concentrate grades of all metals as a function of feed grade, 

ore type and mineralogy. MMC understands that the company has established a copper recovery-feed grade 

relationship for the skarn ore type based on available testing data and historical operational data, however this 

needs to be undertaken for copper for the other ore types and for molybdenum for all ore types. 

Additional marketing studies are recommended to better understand the metal price forecasts. This will reduce the 

Project risk and improve revenue predictability. 

1.7 OPPORTUNITIES AND RISKS 

The key opportunities for the Project include: 

 

 

 

 

 

 

Excellent opportunity to expand the current Mineral Reserves at the Project through completion of infill drilling 

presently being undertaken in the South Pit area. It is likely that this drilling will result in an upgrade of the inferred 

resource inside South Pit to at least Indicated status. Reserving of this material is also likely to increase the ore 

tonnage within the planned pit outline in turn increasing the mine life and reducing the strip ratio further especially 

in the earlier years of production as most of the inferred resources are located in the upper portions of the planned 

pit. This is likely to have a positive impact on the South Pit economics. 

Further optimisation of the scheduling for the open cut and underground resources is likely to lead to an increase in 

NPV through smoothing out of the overall project strip ratio and production profile. Improvement in the sequencing 

of material and optimizing waste and ore movement will allow for costs to be managed and for higher grade 

material to be brought forward therefore increasing the value of the deposit. This can be achieved by attaining a 

greater level of detail by running numerous options on the sequencing and scheduling of the pits as well as the 

sequence between the timing of when various pits come into production putting focus on high grade pits first to 

increase the value of the deposit through the time value of money. 

There is an opportunity to decrease underground development access costs through direct access of the 

underground from the bottom of the South Pit open cut. Detailed design work is required in the next phase of study 

to quantify this saving. 

There is potential to increase Mo recoveries at a lower cut-off grade as well as lower processing costs through 

further metallurgical testing focusing on optimising the flowsheet and use of alternative reagents. Pilot plant scale 

testing should be conducted to assess this opportunity. 

Further infill drilling in the underground portions of the deposit is likely to lead to an increased understanding on the 

mineralisation controls within the deposit, especially controls on the high grade shoot. Further domaining of these 

shoots will lead to improved underground scheduling and is likely to improve the overall project economics. 

Targeted exploration drilling from underground in the latter years is likely to increase the skarn portion of the 

resource at depth to the north east. MMC notes that based on available data the grade and alteration intensity 

decreases with increasing depth. 




Page 8 

The key risks to the Project include: 

 

 

 

 

The current mining lease does not cover the total proposed mining areas or the proposed production rates. The 

proposed mining areas under consideration are currently covered by a valid exploration licence and under Chinese 

mining regulation there is a well-defined and regulated process by which an exploration licence is converted to a 

mining licence with the Company having commenced this process already. Additionally, it is MMC’s understanding 

that as the Company has funded the bulk of the exploration work, they will receive exclusive rights to convert the 

exploration licence to a mining licence upon completion of the Feasibility Study. Hence MMC believes that there is 

reasonable expectation that this conversion will happen in a timely fashion so as not to impact the Company’s 

plans. 

Further geotechnical studies should be undertaken to better understand the rock mechanics related to the Jiaoyan 

Pit, South Pit and the underground mine, as to date only qualitative descriptions regarding the stress distribution 

characteristics of rock mass in the rock mechanics and general estimations regarding the ground surface caving 

have been able to be completed to date. Implementation of ongoing geotechnical monitoring for the open cuts and 

underground mine when in operation will be crucial to optimising pit and ground control designs. 

Jiaoyan pit poses a great risk to the overall project Net Present Value. Jiaoyan is a low grade hornfels Cu-Mo ore 

body which at current modifying factors is considered of marginal value. Jiaoyan only contains low grade in-situ 

copper grades whereby a further decrease in copper prices will see this pit cause serious detriment to the overall 

open cut viability. To mitigate this risk a detailed mine plan will need to be created as well as delaying the 

introduction of this pit in relation to the overall timing within the project to maximize high grade deposits first to 

increase the overall deposit value. Further metallurgical studies focused on increasing recovery of copper and/or 

molybdenum from the hornfels ore type which dominates Jiaoyan is also likely to improve the pits overall 

economics. 

Factors that affect the processing extraction efficiency include the following: 

o 

o 

o 

o 

o 

o 

The ore mineralogy, particularly mineral type, size and association; 

The ore type; 

The feed grade; 

Any oxidation of the ore; 

Plant availability / continuity or operation. 

Operational issues such as: 

• Experience of operators; 

• Control systems e.g. level control in flotation cells 

• Grind size not being achieved 

MMC operates as an independent technical consultant providing resource evaluation, mining engineering and mine 

valuation services to the resources and financial services industries. This Report was prepared on behalf of MMC by 

technical specialists, details of whose qualifications and experience are set out in Annexure A. 

MMC has been paid, and has agreed to be paid, professional fees for its preparation of this Report. However, none of 

MMC staff or sub-consultants who contributed to this Report has any interest in: 

 

 

 

the Company, securities of the Company or companies associated with the Company; or 

the Relevant Asset; or 

the outcome of the release. 

Drafts of the Report were provided to the Company, for the purpose of confirming the accuracy of factual material and the 

reasonableness of assumptions relied upon in the Report. This Report is mainly based on information provided by China 

Gold, either directly from the Project site and other associated offices or from reports by other organisations whose work is 

the property of the Company. The Report is based on information made available to MMC up to July 31, 2012. 




Page 9 

2 INTRODUCTION AND TERMS OF REFERENCE 

2.1 BACKGROUND 

Runge Asia Limited (“RAL”), trading as Minarco-MineConsult (“MMC”), was requested by China Gold International 

Resources Corporation Limited (“China Gold”, the “Client” or the “Company”) to complete a Pre-Feasibility Study 

Technical Report (“PFS” or the “Report”) of the Jiama Copper-Gold Project (“Project” or “Relevant Asset”) in the Tibet 

Autonomous Region, People’s Republic of China. The PFS meets the requirements of the Canadian National Instrument 

43-101 (“NI 43-101”) of the Canadian Securities Administrators. 

China Gold is a Canadian mining company whose shares are dual listed on the Toronto Stock Exchange and Hong Kong 

Stock exchange. At the time of listing 39.95% of shares were publically held with the remainder of the shares held by 

Rapid Result (BVI) - (21.07%) and China National Gold Hong Kong - (38.95%) which is 100% owned by China National 

Gold (PRC). The Project is currently owned and operated by Tibet Huatailong Mining Development Company Limited 

(“Huatailong”), which is wholly owned by China Gold through a number of subsidiary companies. 

2.2 TERMS OF REFERENCE 

The following terms of reference are used in the Technical Report: 

 

 

 

 

 

China Gold refers to China Gold International Resources Corporation Limited, 

MMC refers to Minarco-MineConsult and its representatives. 

Project refers to the Jiama Copper-Polymetallic deposit located in Metrorkongka County, Tibet Autonomous 

Region, People’s Republic of China. 

Copper (Cu), molybdenum (Mo), lead (Pb) and zinc (Zn) grades are described in terms of a percentage (%) with 

tonnage stated in dry metric tonnes, gold (Au) and silver (Ag) grades are described in terms of grams per dry 

metric tonne (g/t) 

Mineral Resources and Mineral Reserves definitions are as set forth in the “Canadian Institute of Mining, Metallurgy 

and Petroleum, CIM Standards on Mineral Resource and Mineral Reserves – Definitions and Guidelines” adopted 

by CIM Counsel on December 11, 2005. 

2.3 SOURCE OF INFORMATION 

The primary document sources for this Report are: 

 

 

 

“Resource Update Report on the Jiama Copper Polymetallic Project in Metrorkongka County, Tibet Autonomous 

Region, The People’s Republic of China”. NI 43-101 Technical Report, March 2012, Behre Dolbear Asia 

Incorporated. 

Draft “Jiama Copper-Polymetallic Project Phase II Feasibility Study Report”. October 2011, Changchun Gold 

Design Institute and Changsha Nonferrous Metals Design & Research Institute. 

“Jiama Copper-Polymetallic Project Phase I Feasibility Study Report”. December 2009, Changsha Nonferrous 

Metals Design & Research Institute. 

2.4 COMPETENT PERSON AND RESPONSIBILITY 

2.4.1 Mineral Resource 

The information in this Report that relates to Mineral Resources is based on information compiled by or under the 

supervision of Mr Jeremy Clark who is a full time employee of MMC and a Member of the Australian Institute of 

Geoscientists. Jeremy Clark has sufficient experience which is relevant to the style of mineralisation and type of deposit 

under consideration and to the activity which he has undertaken to qualify as a Qualified Person as defined by the 

National Instrument 43-101 (“NI 43-101”). 

The Mineral Resource estimate complies with the standards set forth by NI 43-101. Therefore it is suitable for public 

reporting. 

2.4.2 Mineral Reserves 

The information in this Report that relates to Mineral Reserves is based on information provided in the draft Chinese 

Feasibility Study Report prepared by Changchun Gold Design Institute and Changsha Nonferrous Metals Design & 

Research Institute and was reviewed by Mr Anthony Cameron who was an associate for of MMC at the time of Mineral 

Reserve estimate and a Fellow of the Australasian Institute of Mining and Metallurgy. Anthony Cameron has sufficient 




Page 10 

experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity, 

which he has undertaken to qualify as a Qualified Person as defined under the NI 43-101 Code. 

The Metallurgical and Processing aspects of the project have been reviewed by Mr Andrew Newell a full time employee of 

MMC at the time of the Mineral Reserve estimate and a Chartered Professional of the AusIMM. Andrew Newell has 

sufficient experience which is relevant to the style of mineralisation and proposed processing methods under 

consideration, which he has undertaken to qualify as a Qualified Person as defined under the NI 43-101 Code. 

2.4.3 HKEx Requirements 

Jeremy Clark meets the requirements of a Competent Person as the term is defined in the Chapter 18 of the Listing Rules 

Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited, and in that capacity takes overall 

responsibility for this PFS report for the purposes of Listing Rule 18.21(3). 

These requirements include: 

 

 

 

 

 

 

Greater than five years’ experience relevant to the style of mineralisation and type of deposit. 

Member of the Australian Institute of Geoscientists (“MAIG”). 

Does not have economic or beneficial interest (present or contingent) in any of the reported assets. 

Has not received a fee dependent on the findings outlined in the Competent Person’s Report. 

Is not an officer, employee or proposed officer of the issuer, Company or any group, holding or associated 

company of the issuer. 

Assumes overall responsibility for the Competent Person’s Report. 

Jeremy has over 10 years of experience working in the mining industry. During this time he has been responsible for the 

planning, implementation and supervision of various exploration programs, open pit and underground production duties, 

detailed structural and geological mapping and logging. He has a wide range of experience in resource estimation 

techniques. Jeremy’s experience has included at least 5 years actively working in metasomatic sedimentary type deposits 

which have similar styles of mineralisation to the Mineral Resource. His experience includes working and estimating 

resources both in underground and open pit operations in Western Australia, including the Saint Barbara gold operations 

at Southern Cross from 2001-2006, the gold Leonora operations in 2006 and the Jaguar mine (Pb-Zn-Ag) during his work 

with Jabiru mines in 2007. During this time Jeremy completed internal estimations (not public release) for the Marvel 

Loch, Golden Pig, Blue Haze, Jaccoleti, Nevoria, Jaguar, and Gwalia Deeps deposits, which have similar style of 

mineralisation to the skarn type mineralisation that host the mineralisation within the Project. He is a member of the 

Australian Institute of Geoscientists (“MAIG”). 

During his work with Runge from 2007 to the present, Mr Jeremy Clark has worked on numerous epithermal base and 

precious metals deposit throughout the world including China, Central Asia, Europe, Africa, and North and South America. 

This work has included resource estimation of deposits which have similar styles of mineralisation to the deposit. These 

deposits include but are not limited to the Shisishan Polymetallic Project (China Polymetallic Mining) in China, Central 

Ashanti Gold Project (Perseus Mining) in Ghana, the Gurupi Au-Ag deposit in Brazil (Jaguar Mines), the Sierra Mojada 

(Pb-Zn-Ag) deposit in Mexico (Metalline Mining), the Daisy Milano and Murchison Operations (Silver lake Resources) in 

Western Australia, the Silver Coin Gold deposit (Au-Ag-Zn-Pb) (Jayden Resources Canada) in Canada. All of these 

deposits were estimated in accordance with the JORC Code (Australia, Africa, Europe and Asia) or the NI-43.3-101 code 

(Canada, and South America) and resulted in public releases or Technical Reports, of which Jeremy was a Component or 

Qualified person and are available on the Australian Stock Exchange (ASX) or the Toronto Stock Exchange (TSX). 

2.5 LIMITATIONS AND EXCLUSIONS 

The review was based on various reports, plans and tabulations provided by the Client either directly from the mine sites 

and other offices, or from reports by other organisations whose work is the property of the Client. The Client has not 

advised MMC of any material change, or event likely to cause material change, to the operations or forecasts since the 

date of asset inspections. 

The work undertaken for this Report is that required for a technical review of the information, coupled with such 

inspections as the Team considered appropriate to prepare this Report. It specifically excludes all aspects of legal issues, 

commercial and financing matters, land titles and agreements, excepting such aspects as may directly influence technical, 

operational or cost issues. 

MMC has specifically excluded making any comments on the competitive position of the Relevant Asset compared with 

other similar and competing copper/polymetallic producers around the world. MMC strongly advises that any potential 




Page 11 

investors make their own comprehensive assessment of both the competitive position of the Relevant Asset in the market, 

and the fundamentals of the polymetallic market at large. 

2.6 RESPONSIBILITY AND CONTEXT OF THIS REPORT 

The contents of this Report have been created using data and information provided by or on behalf of the Company. 

MMC accepts no liability for the accuracy or completeness of data and information provided to it by, or obtained by it from, 

the Company, the Client or any third parties, even if that data and information has been incorporated into or relied upon in 

creating this Report. The Report has been produced by MMC using information that is available to MMC as at the date 

stated on the cover page. This Report cannot be relied upon in any way if the information provided to MMC changes. 

MMC is under no obligation to update the information contained in the Report at any time. 

2.6.1 Indemnification 

The Company has indemnified and held harmless MMC and its subcontractors, consultants, agents, officers, directors, 

and employees from and against any and all claims, liabilities, damages, losses, and expenses (including lawyers’ fees 

and other costs of litigation, arbitration or mediation) arising out of or in any way related to :- 

 

 

 

MMC's reliance on any information provided by the Company; or 

MMC’s services or Materials; or 

Any use of or reliance on these services; and 

In all cases, save and except in cases of wilful misconduct (including fraud) or gross negligence on the part of MMC and 

regardless of any breach of contract or strict liability by MMC. 

2.7 INTELLECTUAL PROPERTY 

All copyright and other intellectual property rights in this Report are owned by and are the property of MMC. 

MMC grants the Client a non-transferable, perpetual and royalty-free Licence to use this Report for its business purposes 

and to meet its continuous disclosure obligations under applicable securities laws and stock exchange rules, and to make 

as many copies of this Report as it requires for those purposes. 

2.8 MINING FACTORS 

The ability of the operator, or any other related business unit, to achieve forward-looking production and economic targets 

is dependent on numerous factors that are beyond the control of MMC and cannot be fully anticipated by MMC. These 

factors included site-specific mining and geological conditions, the capabilities of management and employees, availability 

of funding to properly operate and capitalise the operation, variations in cost elements and market conditions, developing 

and operating the mine in an efficient manner, etc. Unforeseen changes in legislation and new industry developments 

could substantially alter the performance of any mining operation. 

2.9 CAPABILITY AND INDEPENDENCE 

MMC provides advisory services to the mining and finance sectors. Within its core expertise it provides independent 

technical reviews, resource evaluation, mining engineering and mine valuation services to the resources and financial 

services industries. 

MMC has independently assessed the Relevant Assets of the Client by reviewing pertinent data, including resources, 

reserves, manpower requirements and the life of mine plans relating to productivity, production, operating costs and 

capital expenditures. All opinions, findings and conclusions expressed in this Report are those of MMC and its specialist 

advisors. 

Drafts of this Report were provided to the Client, but only for the purpose of confirming the accuracy of factual material 

and the reasonableness of assumptions relied upon in this Report. 

MMC has been paid, and has agreed to be paid, professional fees based on a fixed fee estimate for its preparation of this 

Report. None of MMC or its directors, staff or specialists who contributed to this Report has any interest or entitlement, 

direct or indirect, in: 

 

 

 

the Company, securities of the Company or companies associated with the Company; or 

the Client, securities of the Client or companies associated with the Client; 

the right or options in the Relevant Assets; or 




Page 12 

 

the outcome of the proposed release. 

This PFS was prepared on behalf of MMC by the signatories, details of whose qualifications and experience are set out in 

Annexure A of this PFS. The Specialists who contributed to the findings within this Report have each consented to the 

matters based on their information in the form and context in which it appears. 




Page 13 

3 RELIANCE ON OTHER EXPERTS 

During the preparation of this Report MMC has relied on the background information provided in Sections 4, 5, 6, 7, 8, 20 

and 23 of the report entitled “Resource Update Report for the Jiama Copper-Polymetallic Project in Metrorkongka County, 

Tibet Autonomous Region, People’s Republic of China” compiled by Behre Dolbear Asia Incorporated dated March 2012. 

None of the technical work presented by Behre Dolbear Asia was relied upon in MMC’s own technical work including the 

estimate of Mineral Resources and Mineral Reserves. 

All other Sections of this Report, with the exception of Section 3, were prepared using information provided by the 

Company and verified by MMC and were applicable or based on observations made by MMC during the site visit. 

The “Jiama Copper-Polymetallic Project Phase II Feasibility Study Report”. - Draft - October 2011 (Chinese Feasibility 

Study) compiled by the Changchun Gold Design Institute and Changsha Nonferrous Metals Design & Research Institute, 

details the Project’s proposed Phase II expansion mining operating profile and development schedule. The Institute is an 

‘A’ rated design institute in China which is the highest level of accreditation achievable. MMC has completed a review of 

the Chinese Feasibility Study, including an analysis of the mine design parameters utilised. This review determined that 

the Chinese Feasibility Study has been completed in line with Chinese Standards and the mine design parameters were 

appropriate and suitable for the Project and as a result formed the basis for the mine design and planning which MMC 

completed. 

MMC has not conducted land status evaluations, although MMC has sighted the copies of the original certificates 

regarding property status, legal title, and environmental compliance for the Project. MMC has not completed a legal review 

of any claims record or any agreement regarding mineral claims of the Project and the information here presented is 

based solely on reports provided by China Gold and is provided for reference only, and should not be relied upon. 




Page 14 

4 PROPERTY DESCRIPTION AND LOCATION 

The Project is a large copper-polymetallic deposit with two active open pits and a planned underground mining operation. 

The Project has been in production since July 2010 with a current mining capacity of 6,000 tonnes per day (“tpd”). The 

Company plans to operate four open cut mines, namely Tongqianshan, Niumatang, South Pit and Jiaoyan, and one 

underground mine, which is split into a north and south areas. The Project is planned to be developed in two phases: 

 

 

Phase I - This stage commenced in June 2010 with the construction of a 1.8 Mtpa ROM ore floatation processing 

plant and related tailings storage facilities (“TSF”) as well as development of the Tongqianshan and Niumatang 

open pits. In addition to the processing facility and open pits, Phase I infrastructure, which has been built, includes 

site offices, accommodation and site road access. At the time of MMC’s site visit the plant and open cuts were 

operational with the Cu concentrate (containing Au and Ag credits) being trucked to Lhasa, where it is loaded onto 

trains for delivery to costumers located within China. 

Phase II – This stage is forecast to commence in 2015 with a ramp up to a maximum processing production 

capacity of 13.8 Mtpa ROM ore by the end of 2016. In addition to the Phase I pits, Jiaoyan and South pit will be 

developed along with the underground operation. Construction of a new processing plant with an annual 

throughput of 12.0 Mtpa ROM ore is planned to occur which will allow for the production of two products; Cu 

concentrate, Mo concentrate respectively. The original 1.8 Mtpa floatation plant from Phase I will be upgraded to 

produce separate Pb and Zn concentrates. Both of these will also include credits of Au and Ag. 

4.1 PROJECT LOCATION 

The Project is located in Metrorkongka County, Tibet Autonomous Region, The People’s Republic of China (Figure 4-1), 

approximately 68 linear km east-northeast of Lhasa, the capital city of Tibet with coordinates of: 

 

 

Latitude - 91°43’06” East; 

Longitude - 29°37’49” North. 

4.2 PROPERTY OWNERSHIP 

MMC has not conducted land status evaluations, although MMC has sighted the copies of the original certificates 

regarding property status, legal title, and environmental compliance for the Project. MMC has not completed a legal review 

of any claims record or any agreement regarding mineral claims of the Project and the information here presented is 

based solely on reports provided by China Gold and is provided for reference only, and should not be relied upon. 

The Project is currently owned and operated by Tibet Huatailong Mining Development Company Limited (“Huatailong”), 

which is wholly owned by China Gold through a number of subsidiary companies. The Project currently comprises two 

permits for mining rights and two permits for exploration rights, the details of which can be found from Table 4-1 to Table 

4-4 and graphically in Figure 4-2. 

The currently defined Mineral Resources and Mineral Reserves are hosted within these licences, which have a total 

combined area of approximately 142.6 sq.km. Some of the Mineral Resources and Mineral Reserves are currently hosted 

outside of the current mining licence but within the exploration licence. MMC understands that under Chinese mining 

regulation there is a well-defined and regulated process by which an exploration licence is converted to a mining licence 

with the Company having commenced this process already. Additionally, it is MMC’s understanding that as the Company 

has funded the bulk of the exploration work, they will receive exclusive rights to convert the exploration licence to a mining 

licence upon completion of the Chinese Feasibility Study. Hence MMC believes that there is reasonable expectation that 

this conversion will happen in a timely fashion so as not to impact the Company’s plans. 

MMC has sighted copies of the mining licences and exploration licences provided by Huatailong and considers that they 

are typical of mining and exploration licences issued by relevant governmental agencies in China and appear to be 

current. 




Page 15 

Table 4-1 Jiama Copper-Polymetallic Project – Mining Licence C5400002010073210070276. 

Mine/Project 

Jiama Copper Polymetallic Mine Niumatang Zone 

Name of certificate 

Mining Licence 

Certificate No. 

C5400002010073210070276 

Owner 

Tibet Huangtailong Mining Development Company Ltd. 

Address 

Lhasa Jinzhu middle road 

Mine name 

Jiama Copper Polymetallic Mine Niumatang Zone 

Company Type 

Limited Liability Company 

Metal 

Copper, Molybdenum, Lead, Zinc 

Mining Type 

Open Cut 

Scale 

0.9Mt/year 

Area 

0.7352 sq.km. 

Mining Elevation From 5,000m to 4,100m 

Validation July 15 th , 2010 to July 15 th , 2015 

Issue Date July 15 th , 2010 

Source: MMC sighted licence copies 

Table 4-2 Jiama Copper-Polymetallic Project – Mining Licence C5400002011113220119758. 


Jiama Copper Polymetallic Mine 0-16-40-80, 0-15 Zone 

Name of certificate 



C5400002011113220119758 

Owner 

Tibet Huangtailong Mining Development Company Ltd. 

Address 13F, Foreign Economy & Trade Building, Lhasa Jinzhu West road 75 

Mine name 

Jiama Copper Polymetallic Mine 0-16-40-80, 0-15 Zone 

Company Type 

Limited Liability Company 

Metal 

Copper 

Mining Type 

Underground 

Scale 

2.00Mt/year 

Area 

2.1589 sq. km 

Mining Elevation From 4,350m to 4,100m 

Validation November 1 st , 2011 to November 1 st , 2014 

Issue Date November 1 st , 2011 

Table 4-3 Jiama Copper-Polymetallic Project – Exploration Licence T54520080702010972. 

Mine/Project Jiama periphery copper lead mine general exploration 

Name of certificate P.R.China Mineral Resource Exploration Permit 

Certificate No. T54520080702010972 

Mine right holder Tibet Huatailong Mining Development Company Ltd. 

Location 

Metrokongka County, lhasa, Tibet 

Name of Project Jiama mine periphery copper lead mine general exploration, Metrorkongka, Lhasa, Tibet 

Exploration Unit Institute of Mineral Resources Chinese Academy of Geological Sciences 

exploration acreage 76.19 sq.km 

Validation March 1 st , 2012 to March 1 st , 2013 

Issue Date March 1 st , 2012 

Table 4-4 Jiama Copper-Polymetallic Project – Exploration Licence T54520080702010972. 


Jiama periphery copper lead mine Bayi Ranch exploration 

Name of certificate P.R.China Mineral Resource Exploration Permit 


T54520080702010979 

Mine right holder Tibet Huatailong Mining Development Company Ltd. 

Location 

Jiama town, Metrokongka County, lhasa, Tibet 

Name of Project Bayi Ranch exploration, Metrorkongka, Lhasa, Tibet 

Exploration Unit 

Institute of Mineral Resources, Chinese Academy of Geological Sciences 

exploration acreage 66.41 sq.km 

Validation March 1st, 2012 to March 1st, 2013 

Issue Date March 1st, 2012 

MMC understands that renewal of licences is dependent on all permit fees (mining or exploration) being paid, and the 

minimum exploration expenditure, resource taxes, and resource compensation levies being paid to the state for the area 

designated under the permit. The renewal application should be submitted to the relevant state or provincial authorities at 

least 30 days before the expiration of a permit. Based on MMC’s experience, the renewal of a mining licence is a 




Page 16 

formality, if the company has a history of paying permitting fees when required. MMC is not aware of the Company owing 

outstanding permitting fees to the government, and thus should have no problems with renewing it licences when required. 

MMC provides this information for reference only and recommends that land titles and ownership rights be reviewed by 

legal experts. 

4.2.1 Permits, taxes and Royalties 

MMC is aware that the Company has obtained all current necessary permits and licences to conduct open-pit and 

underground mining operations and processing within the current mining licence areas for Phase I. However, the area 

and production rate of the mining licence will need to be increased to be consistent with the planned production rate for 

Phase II. In order to retain the Jiama property, the Company is obligated to conduct all mining and processing activities at 

the Project site in accordance with the state and local laws and regulations and to pay any licence fees and taxes to the 

relevant governmental agencies on a timely basis. MMC is not aware of the Company failing to meet any state or local 

laws and regulations related to its Project, or failing to pay any requires fees or taxes to the relevant government agencies. 

Environmental liabilities at the Project area are mostly related to the mining operation by the four previous operators 

before the Project consolidation in 2007. The original underground mine workings as well as three smaller processing 

plants with processing capacities ranging from 300 tpd to 850 tpd that existed before consolidation were abandoned and 

the processing plants were dismantled and reclaimed by Huatailong. The associated tailings storage facilities (“TSF”) will 

also be reclaimed by Huatailong. MMC is aware this work is currently underway with several of these TSFs being 

reclaimed already. 

The Project is subject to a resource tax of 5 RMB per ROM tonne, a royalty for Cu, Mo, Pb and Zn of 2.0% on revenue, 

and a royalty for Au and Ag of 2.8% revenue. Copper, molybdenum, lead, zinc, and silver produced from the mine are 

subject to a value-added-tax (“VAT”) of 17% (details of how this tax is applied is provided in Section 21). Gold production 

is exempted from VAT in China. The Project is also subject to a city-maintenance-and-construction tax of 5% of the VAT 

and an education tax of 3% of the VAT. The corporate income tax rate is 15%. 

The Project is required to post an environmental reclamation bond of approximately RMB 35 million (“M”). A first payment 

of RMB1.5 M (US$0.22 M) was made in 2009, with the remaining amount paid in five yearly instalments from 2010. 




70ûE 

80ûE 

90ûE 

100ûE 

110ûE 

120ûE 

130ûE 

140ûE 

50ûN 

Astana 

Irtysh 

RUSSIA 

L. Baykal 

Amur 

50ûN 

140ûE 

LEGEND 

International boundary 

Provincial boundary 

Rivers 

Highways 

KAZAKHSTAN 

Heilongjiang 

L. Balkhash 

Ulaanbaatar 

Harbin 

Jilin 

40ûN 

70ûE 

Bishkek 

KYRGYZSTAN 

Urumqi 

MONGOLIA 

Nei Mongol 

Shenyang 

Liaoning 

Changchung 

NORTH 

KOREA 

Sea of 

Japan 

(East Sea) 

40ûN 

X i n j i a n g 

Hohhot 

Beijing 

Pyongyang 

PAKISTAN 

Islamabad 

C H I N A 

Yinchuan 

Ningxia 

Taiyuan 

Shanxi 

Beijing 

Shijiazhuang 

Hebei 

Tianjin 

Tianjin 

Jinan 

Seoul 

SOUTH 

KOREA 

Huang 

Qinghai 

Xining 

Lanzhou 

Gansu 

Zhengzhou 

Shandong 

Yellow 

Sea 

JAPAN 

30ûN 

X i z a n g 

Xian 

Shaanxi 

Henan 

Jiangsu 

New 

Delhi 

NEPAL 

Kathmandu 

Lhasa 

Jiama Project 

Chengdu 

Sichuan 

Yangtze 

Hubei 

Wuhan 

Hefei 

Anhui 

Nanchang 

Nanjing 

Shanghai 

Shanghai 

Hangzhou 

Zhejiang 

East China 

Sea 

30ûN 

130ûE 

Thimbu 

Changsha 

Ganges 

BHUTAN 

Guizhou 

Hunan 

Jiangxi 

Fuzhou 

Guiyang 

Fujian 

Taipei 

INDIA 

BANGLADESH 

Dhaka 

Kunming 

Taiwan 

20ûN 

Yunnan 

Guangxi 

Guangzhou 

Guangdong 

Salween 

Bay 

of 

Bengal 

MYANMAR 

LAOS 

Vientiane 

VIETNAM 

Hanoi 

Nanning 

Hainan 

Haikou 

Hong Kong 

Hong Kong 

South China Sea 

PHILIPINES 

20ûN 

0 500 

1000 

Kilometres 

N 

FIGURE 4-1 

80ûE 

90ûE 

Rangoon 

THAILAND 

Mekong 

100ûE 110ûE Project No : ADV-HK-03709 

120ûE 

Manila 

China Gold International Resources Corporation Ltd. 


General Location Plan

N 

S302 

G318 

Maizhokunggar 

G318 

Niumatang Mining 

License Boundary 

Jiama Explorarion 

License Bouridary 

S202 

G109 

Lhasa 

G318 

Jiama Mining 

License Boundary 

Bayi Ranch Explorarion 

License Bouridary 

G318 

LEGEND 

Lake / River 

Roads 

Highways 

Railway 

0 5 10 

Kilometres 

Project No : ADV-HK-03709 

120ûE 

FIGURE 4-2 



Detailed Location Plan

Page 19 

5 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE 

AND PHYSIOGRAPHY 

5.1 PROJECT ACCESS 

The Project can be accessed via highway G318 at a distance of 60 km from Lhasa, followed by an 8 km paved road, 

which connects the site offices, accommodation and Project area with the highway. Lhasa has daily international and 

domestic flights in addition to an operating rail network which connects Tibet to other provinces in China. 

5.2 GEOGRAPHY AND CLIMATE 

The Project is located in a mountainous area with elevations ranging from 4,350 m to 5,410 m above sea level (ASL) on 

the Tibet Plateau. The topography in the area is characterized by steep slopes, high elevations, and large changes in 

relief. Approximately half of the surface area within the Project is covered by shrub bushes and grasses, while the other 

half of the surface area is covered by soil and fallen rocks formed from freezing, erosion, and weathering. The soil and 

fallen rock cover is generally only a few meters thick and has no significant impact on mining or exploration. 

The area has a typical continental plateau climate with summers relatively humid and cool, while the winters are dry and 

extremely cold. There is a large temperature difference between day and night, with an average temperature of 16.0 0 C in 

summer and -1.6 0 C in winter. Winter conditions prevail from October through to March. July and August are the only frostfree 

months in any year. Average annual precipitation is approximately 500 mm, which occurs mostly as rain from June to 

September. The climate has no impact on mining or exploration conditions. 

Tibetan inhabitants are sparsely populated within the Project area, with most of the land being used for low-intensity yak 

and sheep grazing, and agriculture, with the primary crop being highland barley. 

5.3 LOCAL RESOURCES AND INFRASTRUCTURE 

Surface fresh water is sufficient to support the current and planned requirements of the Project and is sourced and 

pumped 8 km from the nearby Chikang River. Water for the processing facility is recycled from the dewatered tails, which 

are dry stored as per the permit requirements. 

A 110-kV power transmission line has been constructed to connect the Project site to the Metrorkongka substation located 

approximately 20 km north of the Project area. This power line connects the Project site to the Central Tibet power grid. 

The Tibet government has been executing a power-supply development plan from 2006, which includes building several 

new power generation plants with the goal of connecting the Central Tibet power grid to the national power grid in China. 

The Project has been designated as one of the most important projects in Tibet and has been granted priority in electricity 

supply by the Tibet government. MMC is aware that the power supply is adequate with no power shortages occurring 

during Phase I construction and operation to date. 

Although water is scarce in the general area, the Project area has obtained sufficient surface water rights to support the 

planned mining and processing operation. Fresh water for production and the mine camp will be obtained from the river, 

which is a tributary of the Lhasa River. Water from the flotation tail thickeners and the tailing filtering system will be 

recycled for use in production. 

A significant portion of the skilled mining personnel for the Project have been sourced from other China National Gold 

Group Corporation and/or non-China National Gold Group Corporation mining operations outside Tibet; however 

Huatailong has formed a logistics company, which consists entirely of local personnel. This company is 49% owned by 

local staff and operates mining haul trucks and controls the logistics of the site. 




Page 20 

6 HISTORY 

The bulk of the history information has been summarised from the Behre Dolbear Asia Incorporated “Resource Update 

Report for the Jiama Copper-Polymetallic Project in Metrorkongka County, Tibet Autonomous Region, People’s Republic 

of China” report, dated March 2012. 

6.1 PRE-2008 

Small-scale historic lead mining occurred within the Project area prior to the 1950’s before the commencement of modern 

exploration, which commenced in 1951. Exploration works conducted from 1951 to 1990 delineated a 3,600-m long 

copper-lead-zinc mineralisation zone at the Project area. Exploration during this period consisted predominately of 

surface trenching. 

Following a review of the surface trenching, the No.6 Geological Brigade (“Brigade 6”) of Tibet Geology and Mineral 

Resource Bureau drilled 31 surface diamond drill holes for a total of 10,091 m on 16 sections, 407.5 m of underground 

development and 16,474 cu.m of surface trenches between 1991 and 1999. Following completion of this exploration four 

mining licences and subsequent operations were established within the Project’s mining licence including: 

 

 

 

 

Lines 15-0 Mining License: The licence was issued to the Jiama Township government, which organized the Jiama 

Township Fupin Development Company Limited. A 300-tpd concentrating plant was built and mining started in 

2004. A total of 14 adits were developed, with an estimated 49,000 t of ore mined to the end of June 2006. Mine 

production after June 2006 is unknown. 

Lines 0-16 Mining License: The licence was issued to Lhasa Mining Company, which conducted open-pit and 

underground mining. Open-pit mining above the 4,780 m elevation commenced in 1995, while a total of 10 adits 

with a level height ranging from 16 m to 40 m were completed between the elevations of 4,606 m and 4,780 m prior 

to 2006. Records indicate that the total mine production to the end of 2005 was 130,000 tonnes. Mine production 

after January 2006 is unknown. 

Lines 16-40 Mining License: A joint venture company between Brigade 6 and Henan Rongye Trading Company 

Limited was established to conduct mining operation, which was known as the Tibet Jiama Mining Development 

Company Limited. Mining commenced in 2003 and consisted of a processing plant with capacity of 850 tpd, which 

was built in 2006. It has been estimated that the total combined mined and lost mineral resources was 109,000 

tonnes to the end of June 2006. Mine production after June 2006 is unknown. 

Lines 40-80 Mining License: The licence was issued to the original Tibet Huatailong Mining Development Company 

Limited. Mining commenced in 2005 with an estimated total production from three underground adits of 80,000 t to 

June 20 th , 2006, with an estimated mining loss of 8,900 tonnes, however no processing plant was built for this 

mining licence. The. Mine production since June 2006 is unknown. 

As the exact total historical mine production figure is unknown, the Resource Institute conducted a systematic survey of 

the existing underground adits and mined-out stopes within the above mining licence areas, and the volume calculated 

from the surveyed stopes has been used to deduct the consumed mineral resources for the Jiama Project. 

Mining activities by the previous operators within the four mining licence areas were halted by the Tibet government on 

April 1, 2007. In accordance with an agreement between the Tibet government and China National Gold Group 

Corporation, the four mining licences as well as the exploration licences in the surrounding areas were consolidated into 

the reorganized Huatailong in late 2007, with China Gold Group HK as the primary shareholder. 

6.2 2008 - ONWARDS 

Following the consolidation of the mining and exploration licences, Huatailong completed four phases of exploration 

works, these were completed in 2008, 2009, 2010 and 2011. In addition to the 145 surface diamond drill holes for a total 

of 47,443 m completed in 2008, Huatailong established survey control points using differential GPS instruments, based on 

the 1954 Beijing coordinate system and the 1956 Yellow Sea elevation system. A topographic survey on a 1:2,000 scale 

(2 m contours) over a total area of 13.8 sq.km was conducted by total stations, and the survey results were tied to the 

established survey control points. In 2009 a further 47 surface diamond drill holes for a total of 18,746 m were completed. 

These drill holes were generally infill drill holes, however additional step out drilling was complete to expand the defined 

resources. In 2010, Huatailong completed 99 surface drill holes for a total of 49,613 m. These holes included both infill 

drilling and extension holes along strike and down dip. Following a review of these holes Huatailong completed an 

additional 22 infill drill holes in 2011 within the proposed pit locations to enable detailed mine planning to be undertaken. 

These 22 surface diamond holes resulted in a total of 10,720 m being drilled and were the basis for updating of the 

Mineral Resources. 




Page 21 

7 GEOLOGICAL SETTING AND MINERALISATION 

The bulk of the regional geology information has been summarised from the Behre Dolbear Asia Incorporated “Resource 

Update Report for the Jiama Copper-Polymetallic Project in Metrorkongka County, Tibet Autonomous Region, People’s 

Republic of China” report, dated March 2012. 

7.1 REGIONAL GEOLOGY 

Subduction and collision between the Indian Plate and Eurasian Plate from Late Mesozoic to Cenozoic time, commonly 

referred to as the Himalayan Orogeny, has created the world’s highest mountain range and the Tibetan Plateau. The 

complicated tectonic evolution during this period of time as well as during the preceding Yanshanian Orogeny has created 

a series of near east-west-trending structural zones in the plateau, with associated multiplestage magmatism and related 

mineralisation. 

7.2 PROJECT GEOLOGY 

The Project is located in the central-south portion of the Gangdise-Nianqing Tanggula Terrane. Stratigraphy outcropping in 

the Project area is dominated by passive epicontinental clastic-carbonate rocks, including Upper-Jurassic Duodigou 

Formation limestones and marbles, Lower-Cretaceous Linbuzong Formation sandstones and slates, and Quaternary 

colluviums and alluviums (Figure 7-1). Some mafic, intermediate to felsic dikes can be observed outcropping within the 

Project area and within drill holes, but no large intrusive bodies have yet been identified. It is suggested that a large 

granitic intrusive body exists at depth in the area and it has provided the intense heat source for the metamorphism and 

also the mineralizing solutions for the copper-polymetallic mineralisation. Emplacement of the granitic intrusion would have 

resulted in a large portion of the Duodigou limestones being metamorphosed to marbles, and the Linbuzong clastic rocks 

being largely metamorphosed into hornfels. 

7.3 MINERALISATION 

Three types of copper-polymetallic mineralisation are observed within the Project, these include Skarn, Hornfels and 

porphyry hosted mineralisation. All three styles of mineralisation are structurally controlled with concentrations occurring 

along shear/structure zones and mineralisation offset by thrust and detachment faults as well as associated with anticlines 

and synclines. As shown in Figure 7-2, the three styles of mineralisation geographically occur in three zones, the Skarn 

occurs as a planar body, while the Hornfels occurs as a massive unit near surface, which overlies the Porphyry hosted 

mineralisation. 

7.3.1 Skarn-Type Copper-Polymetallic Mineralisation 

The majority of the high grade Copper-polymetallic mineralisation within the Project is hosted by the Skarn type alteration 

distributed along an interlayer structural zone between the Duodigou marbles and the Linbuzong hornfels. This structural 

zone is stratiform, tabular, or lenticular in shape, strikes west-northwest and has a variable dip to the northeast. The upper 

near surface portion of the mineralised body has a steep dip angle, averaging around 60° which gradually flattens with 

depth to an average dip of around 10°. The majority of mineralisation is contained within a large body, which is 

approximately 2,400 m in length and ranges from 150 m to 1,900 m in width down dip. Due to the style of mineralisation, 

the thickness is highly variable with the thickness ranging from 2 m to 240 m, with an average of 33 m. 

Several smaller mineralised bodies have also been defined by the current drilling; however they are generally not 

continuous beyond 200 m in strike length. 

Cu Mineralisation is mainly associated with the sulphide minerals chalcopyrite, bornite and chalcocite, which occur hosted 

by small sulphide veins, as disseminated sulphide crystals or massive sulphide zones. Observations by MMC during the 

inspection of the drill core indicated that the massive sulphide zones range up to 5m in length, however the majority of the 

sulphide mineralisation occurs as disseminated crystals which surround concentrations of veins and range up to 10 cm in 

width. These veins have relatively high grade, which generally contain massive or very high concentration of Cu sulphides. 

Importantly these veins are less than 10 cm wide and occur as a series of vein sets, which can range up to 30 m in length. 

As a result the Cu grade is directly related to the abundance of the vein sets. 




3289000N 

16377800E 

16378200E 16378600E 16379000E 16379400E 16379800E 16380200E 16380600E 16381000E 16381400E 16381800E 16382200E 

3289000N 

LEGEND 

N 

3288600N 

Quaternary 

Lower Cretaceous Linbuzong Group Carbonaceous slate,sandstone 

Upper Jurassic Duodigou Group limestone, marble 

Upper Jurassic Duodigou group, marble skarn 

Granite, Granodorite, Quartz Porphyry 

Skarn 

Skarn with Mineralisation 

Mining Licences 

3288600N 

3288200N 

3288200N 

3287800N 

3287800N 

3287400N 

3287400N 

3287000N 

3287000N 

3286600N 

3286600N 

3286200N 

0 200 400 

metres 

3286000N 

3286000N 

China Gold International Resource Corporation Ltd. 

16377800E 16378200E 16378600E 16379000E 16379400E 16379800E 16380200E 16380600E 16381000E 16381400E 16381800E 16382200E 


3286200N 

FIGURE 7-1 


Local Geology Map

Page 23 

Other metals of economic interest within the Skarn mineralisation include molybdenum, lead, gold, silver, and zinc. These 

metals generally appear as disseminated crystals through this zone and have variable correlations to Cu as outlined in 

Section 17. 

7.3.2 Hornfels Hosted Copper-Polymetallic Mineralisation 

The Hornfels hosted type copper-polymetallic mineralisation within the Project is generally lower in grade than the Skarn 

and occurs as a massive unit, however significant amounts of fracturing occur within the body. Unlike the Skarn 

mineralisation the majority of the Cu and associated mineralisation occurs as disseminated crystals hosted by the 

Hornfels, with no veining or massive sulphide being observed. Generally, mineralisation occurs in the form of 

chalcopyrite, bornite, and molybdenite with a fine grain size. During the site visit, MMC noted the presence of some 

secondary enrichment along fracture zones along with pyrite and pyrrhotite. This secondary enrichment is the likely cause 

of some higher grades observed in the drill core. Copper is generally enriched in the upper portion of the mineralisation 

and molybdenum is generally enriched in the lower portion of the mineralisation. 

The Hornfels hosted type of mineralisation occurs within a single mass of mineralisation that has dimensions over 1,500 m 

long, 1,000 m wide and is currently defined up to 820 m deep. 

7.3.3 Porphyry-Type Mo-Cu Mineralisation 

The Porphyry type mineralisation is dominated by molybdenite with only minor chalcopyrite and bornite observed. The 

sulphide minerals generally occur as medium to coarse grains within the host rock, which possibly leads to the high 

nugget observed. This style of mineralisation occurs as a pipe-like shape hosted by granodiorite and monzogranite 

porphyry and has a maximum mineralisation thickness of 476 m, however it is comonly thinner. 




LEGEND 

Internal Waste 

Drill Holes 

Hornfels 

Skarn 

Porphgry 

Open 

Open 

FIGURE 7-2 




Generalised Cross Section ( Looking NW )

Page 25 

8 DEPOSIT TYPES 

The majority of high grade mineralisation within the Project is the large stratiform skarn-type copper-polymetallic body 

controlled mostly by an interlayer structural zone between the Duodigou marbles and the Linbuzong hornfels. The 

mineralized zone measures thousands of meters in both strike and dip directions and is still open in many places. 

Some lower-grade copper-polymetallic mineralisation has also been encountered in the overlying Linbuzong hornfels. 

Hornfels hosted mineralisation is potentially very large and overlies a Porphyry hosted mineralised body. All mineralised 

types are likely formed by contact metamorphism and hydrothermal mineralisation associated with a granitic intrusion(s). 

This type of mineralisation is common in China and the surrounding countries, although this deposit is on a much larger 

scale. 




Page 26 

9 EXPLORATION 

The bulk of the exploration information has been summarised from the Behre Dolbear Asia Incorporated “Resource 

Update Report for the Jiama Copper-Polymetallic Project in Metrorkongka County, Tibet Autonomous Region, People’s 

Republic of China” report, dated March 2012. 

Exploration within the Project area can be separated into three phases, as outlined below: 

9.1 PRE-1991 

Minimal exploration was completed during this period, with only small-scale mining occurring prior to the 1950’s within the 

Project area prior to the 1950’s. Exploration after the 1950’s consisted predominately of surface trenching with no drilling 

being undertaken. 

9.2 1991-2000 

All exploration works between 1991 and 2000 were completed by Brigade 6 and included 1:2,000 and 1:25,000 scale 

topographic survey, geological mapping, surface trenching, adit development, and surface diamond drilling. A total of 31 

surface drill holes for a total drilled length of 10,091 m were completed, along with the development of 407.5 m of adits 

and 16,474 cu.m of surface trenches. Exploration work was concentrated on the near-surface portion of the mineralized 

zones and was conducted in accordance with the industry requirements in China. 

9.3 2008 -2011 

Following the consolidation of the mining licences Huatailong completed four phases of exploration works, these were 

completed in 2008, 2009, 2010 and 2011. In addition to the 145 surface diamond drill holes for a total of 47,443 m 

completed in 2008, Huatailong established survey control points using differential GPS instruments, based on the 1954 

Beijing coordinate system and the 1956 Yellow Sea elevation system. A topographic survey on a 1:2,000 scale (2 m 

contours) over a total area of 13.8 sq.km was conducted by total stations, and the survey results were tied to the 

established survey control points. 

In 2009 a further 47 surface diamond drill holes for a total of 18,746 were completed. These drill holes were generally infill 

drill holes, however additional step out drilling was complete to expand the defined resources. 

In 2010, Huatailong completed 99 surface drill holes for a total of 49613 m. These holes included both infill drilling and 

extension holes along strike and down dip. Following a review of these holes Huatailong completed an additional 22 infill 

drill holes in 2011 within the proposed pit locations to enable detailed mine planning to be undertaken. These 22 surface 

diamond holes resulted in a total of 10,720 m being drilled. 




Page 27 

10 DRILLING 

10.1 BRIGADE 6 DRILLING IN THE 1990’S 

Diamond drilling by Brigade 6 in the 1990’s was conducted in accordance with the “Core Drilling Regulation” promulgated 

by the former Ministry of Geology and Mineral Resources of China. Of the 31 holes drilled, only 22, with a total drilled 

length of 6,518 m met the requirements under the regulation. Core recoveries ranged from 65% to 95%, with an average 

of 84% for 15 holes. Six other holes were considered as not conforming with the regulations because the core recovery 

was too low or because the drill hole was terminated prematurely. Only the 22 holes meeting the regulations have been 

included in the database for the current resource estimation which underpins the Mineral Resource and Mineral Reserves 

estimates. 

10.2 HUATAILONG DRILLING POST 2007 

10.2.1 2008 - 2011 Drilling 

All Huatailong drill programmes utilised 130 mm or 110 mm diameter drill bits from surface, reducing to 91 mm or 75 mm 

diameter drill bits after entering into solid rock. During the site visit MMC observed that core recoveries were generally 

good as is recorded during the geological logging. Core recovery for the skarn mineralized intervals ranged from 60.3% to 

100%, averaging 95.3%; core recovery for the hanging walls ranged from 62.7% to 100%, averaging 95.0%; and core 

recovery for the footwalls ranged from 65.1% to 100%, averaging 95.3%. MMC considers the recoveries sufficient to 

enable a representative sample to be taken. 

Drill hole collar locations were surveyed using differential GPS survey instruments after drilling, and the down-hole 

deviation was measured using down-hole survey instruments generally at a 100 m interval. Completed drill holes were 

plugged using cement, with a cement post installed at the centre of the drill hole collar. 

Properly labelled and boxed drill cores were transported from the drill site to the core storage warehouse, where core 

logging, photographing, and sampling took place. All remaining cores are stored in well labelled and well-built structures, 

which minimize the impact of the extreme weather observed in the area. 

Figure 10-1 displays drill hole locations coloured by the date drilled. 

10.3 DISCUSSION 

All drill holes were drilled vertically within the Project area. MMC considers this suitable given the geometry of the 

mineralised bodies and the large scale disseminated nature of the majority of the mineralisation. In addition a review of 

the drilling practices, logging and core labelling indicates that no bias can be observed and the procedures are suitable. 




LEGEND 

1990’s 

2011 

2010 

2009 

2008 

2006 

FIGURE 10-1 




Drill Collar Location

Page 29 

11 SAMPLE PREPARATION, ANALYSES AND SECURITY 

The bulk of the Sample Preparation, Analysis and Security information has been summarised from the Behre Dolbear Asia 

Incorporated “Resource Update Report for the Jiama Copper-Polymetallic Project in Metrorkongka County, Tibet 

Autonomous Region, People’s Republic of China” report, dated March 2012. 

11.1 SAMPLING METHOD AND APPROACH 

11.1.1 Brigade 6 Sampling in the 1990’s 

Core samples were taken using a mechanical splitter. Half of the core was sent for sample preparation and assay, and the 

other half was retained for records. Sample intervals were generally 1 to 2 m with surface trenches sampled by channels 5 

cm wide and 3 cm deep. Channels were oriented perpendicular to the direction of the mineralized/alteration zone 

extension as far as was possible. 

11.1.2 Huatailong Sampling in 2008 - 2011 

After logging of the core, the geologist selected intervals, which were to be sampled and which were all cut using a 

diamond rock saw. Half of the core was sent for sample preparation and assay, and the other half was retained for 

records. Sample intervals were generally 1 m for the skarn-type mineralisation and 2 m for the Hornfels hosted 

mineralisation, however the length occasionally varied based on the geological characteristics of the core. Samples were 

taken continuously within the mineralized zones as well as every 2 m along the host rocks on each side of a mineralised 

zone. 

11.2 SAMPLE PREPARATION AND ANALYSIS 

11.2.1 Brigade 6 Work - 1990s’ 

Sample preparation and analysis for the Brigade 6 samples were conducted by the Tibet Central Laboratory of the Ministry 

of Geology and Mineral Resources of China in accordance with relevant regulations during that period. No detailed 

information was available for the sample preparation procedures and metal grade determination methods. However, MMC 

believes that the assay results are acceptable based on their similarities with the samples taken during the 2008 to 201 

drilling programmes Huatailong. In addition, in MMC’s experience laboratories controlled by governmental department 

strictly follow the guidelines of the time, and therefore MMC considers there to be no reason to suspect any material bias 

has occurred. 

11.2.2 Huatailong Work - 2008 and 2011 

Sample preparation and analysis for the Huatailong core samples was undertaken by the Southwestern Metallurgic 

Geology Analytical Center (“Southwest Center”) in Chengdu, Sichuan Province, which is an accredited laboratory by the 

Chinese National Accreditation Board for Laboratories (“CNAL”). The Southwest Center set up a sample preparation 

facility in the Huatailong core storage warehouse. Sample preparation was undertaken by the Southwest Center 

personnel. Samples were prepared by a two-stage crushing and one-stage grinding procedure to reduce the size of 

sample particles to minus 200 mesh (0.074 mm). Sample splitting was not performed until the particle size was reduced to 

approximately 1 mm. A ground sample of approximately 400 grams (“g”) was sent for analysis in Chengdu; a duplicate 

ground sample of approximately 500 g as well as the coarse rejects was kept in the core storage warehouse. 

Sample analysis was undertaken by the Southwest Center using the standard analytic methods specified in “The Quality 

Administration Standards for Analysis in Geological and Mineral Resource Laboratories” (DZ0130-94) promulgated by the 

former Ministry of Geology and Mineral Resources of China. Gold grades were determined by an aqua regia + fluoride 

digestion, reactivated carbon concentrating, and atomic absorption spectroscopy (“AAS”) procedure. Copper, lead, zinc, 

molybdenum, and silver grades were determined using an aqua regia + hydrofluoric acid + perchloric acid digestion and 

Inductively Coupled Plasma Atomic Emission Spectrometry (“ICP-AES”) or AAS procedure. All samples were analyzed for 

the above six metals. 

Some composite samples were also used to determine the concentration of tungsten, cobalt, nickel, cadmium, tin, gallium, 

niobium, rhenium, arsenic, antimony, bismuth, mercury, selenium, tellurium, germanium, indium, thallium, and sulfur by 

ICP-AES and other analytic methods. 

None of the Huatailong employees, officers, directors, or associates were involved in the sample preparation. MMC 

considers the sample preparation procedures, analytic method, and security utilized to be appropriate for this type of 

copper-polymetallic deposit. 

During the site visit on the 29 th of April 2012, MMC held numerous discussions with the site personnel and operators. 

These discussions indicated that appropriate procedures and quality control checks were in place to minimize sample 

bias. 




Page 30 

12 DATA VERIFICATION 

In addition to the data verification and Quality Assurance and Quality Control’s data reviewed for the drilling prior to 2011, 

which is outlined in the previous publicly released Technical Reports, MMC conducted a review of the geological digital 

data supplied by the Company for the Project. This review was to ensure no material issues exist in the data and to 

confirm that the data is accurate. During a review of the data MMC completed the following checks: 

 

 

 

 

 

 

 

 

Inspection of the core storage, core processing and sampling facilities; 

Inspection and review of the procedures of the analytical laboratories responsible for the sample analysis for both 

the primary and external samples; 

Compared the hardcopy driller’s reports, geological logging, geological reports and sampling sheets of 14 holes 

with the database, which represent 5% of the total holes - no other error was noted except 3 input errors. 

Compared the hardcopy assay results of 28,951 samples with the database, which represent 50% of the total 

assay results, only 534 results were wrong input into the database (1.84%), discussion with the Client indicate that 

these inconsistence come from re-drilling of holes, mislabelled samples, and wrong inputs. These errors were 

corrected accordingly and are not considered to be material. 

Comparison of geological maps, cross sections, long sections, exploration drill plans with the digital datasets; 

Sample interval, drillers marks and holed clearly marks and labelled on the holes and consistent with digital data; 

Observed geology and assays are consistent with core and outcrop geology; 

Inspection of open pits to ensure depleted areas were accurately represented in the digital topography. 

12.1 QUALITY CONTROL DATA FOR 2011 DRILLING 

Quality Assurance and Quality Control (“QAQC”) data collected during the 2011 drilling programme include internal and 

external duplicates and blanks. All internal duplicate samples were sourced from the homogenised pulverised material at 

the CNAL, while external duplicates were sourced from the secondary crushed material (coarse reject). Both laboratories 

utilised the same method of analysis for all elements, which MMC considers appropriate. The number of duplicate 

samples for each area is shown in Table 12-1, and the comparisons to the original samples are shown graphically in the 

scatter plots in Figure 12-1. 

Table 12-1 Jiama Copper-Polymetallic Project – Internal and External Duplicate Samples for the Project 

Total Number of Samples Internal External 

7,791 91 427 

A review of the scatter plots of the data available indicates that strong correlation is generally observed between the 

original and the duplicate samples for all elements, although some minor variation did occur. As a result, MMC considers 

this variability to be the result of natural variation in the samples rather than a systematic bias in the sample preparation or 

analytical technique of the primary laboratory. 

12.2 DATA QUALITY REVIEW 

The review of the drilling and sampling procedures indicates that international standard practices were generally utilised 

with only very minor or immaterial issues being noted by MMC. A good to excellent correlation is observed for the majority 

of internal and external duplicates for all generations of drilling. As a result, MMC considers that the data which underpins 

the resource has no material sample bias and are representative of the samples taken. 

12.3 DATA VERIFICATION STATEMENT 

The results of the data verification and data quality review indicate that the digital database used as the basis for the 

Statement of Mineral Resources and Mineral Reserves is supported by verified certified assay certificates, original drill 

logs, QAQC, independent external assays and verified survey data. As such, MMC believes there is sufficient data to 

enable the use of this data in a Mineral Resource estimate and resultant classification following that set by the NI 43-101 

rules. 




Cu Internal Duplicates V Original Samples in 2011 

Cu External Duplicates V Original Samples in 2011 

12 

10 

y = 0.9928x 

R² = 0.9953 

2.5 

2 

y = 0.9645x + 0.0147 

R² = 0.9802 

Internal Cu % 

8 

6 

4 

External Cu % 

1.5 

1 

2 

0.5 

0 

0 2 4 6 8 10 12 

Original Cu % 

0 

0 0.5 1 1.5 2 2.5 

Original Cu % 

Internal Mo % 

Mo Internal Duplicates V Original Samples in 2011 

1.4 

y = 1.0197x 

1.2 

R² = 0.9799 

1 

0.8 

0.6 

0.4 

0.2 

External Mo % 

Mo External Duplicates V Original Samples in 2011 

0.7 

y = 0.9628x + 0.0021 

0.6 

R² = 0.9726 

0.5 

0.4 

0.3 

0.2 

0.1 

0 

0 0.2 0.4 0.6 0.8 1 1.2 1.4 

Original Mo % 

0 

0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 

Original Mo % 

Internal Pb % 

Pb Internal Duplicates V Original Samples in 2011 

9 

y = 1.009x 

8 

R² = 0.995 

7 

6 

5 

4 

3 

2 

1 

External Pb % 

Pb External Duplicates V Original Samples in 2011 

1.4 

y = 1.0597x -0.0003 

1.2 

R² = 0.9976 

1 

0.8 

0.6 

0.4 

0.2 

0 

0 1 2 3 4 5 6 7 8 9 

Original Pb % 

0 

0 0.2 0.4 0.6 0.8 1 1.2 1.4 

Original Pb % 

Internal Zn % 

Zn Internal Duplicates V Original Samples in 2011 

9 

y = 0.9856x 

8 

R² = 0.9971 

7 

6 

5 

4 

3 

2 

1 

0 

0 1 2 3 4 5 6 7 8 9 

Original Zn % 

External Zn % 

Zn External Duplicates V Original Samples in 2011 

1 

0.8 

0.6 

0.4 

0.2 

y = 0.9669x + 0.0004 

R² = 0.9986 

0 

0 0.2 0.4 0.6 0.8 1 

Original Zn % 

FIGURE 12-1 

China Gold International Resources Corporation Limited 


Project No : ADV-HK-03709 Internal and External Duplicates 2011

Page 32 

13 MINERAL PROCESSING AND METALLURGICAL TESTING 

13.1 MINERALOGY 

The proposed feed for the processing plant will consist of two main Mo-Cu ore types, namely skarn and hornfels hosted, 

which exhibit different processing characteristics in terms of grade and hardness. The mineralogy of skarn hosted ore 

varies greatly in terms of hardness and grade, while the hornfels hosted ore is disseminated with consistently lower Mo 

and Cu grades. Table 13-1 presents the assay for both ore types. The economic metals are copper, molybdenum, gold 

and silver. The main impurity is arsenic. 

Table 13-1 Jiama Copper-Polymetallic Project - Composite Assaying 

Assay (%) 

Element Hornfels Hosted Ore Skarn Ore 

Cu 0.38 1.02 

Mo 0.015 0.054 

Pb 0.01 0.03 

Zn 0.14 0.03 

S 1.23 1.01 

Fe 2.15 8.06 

SiO 2 68.65 44.67 

Al 2O 3 13.51 3.66 

CaO 0.56 18.1 

MgO 1.07 2.86 

As 0.05 0.01 

P 0.07 - 

Au (g/t) - 1.07 

Ag (g/t) - 16.08 

Source: 2009 Metallurgy Testing Report by CGRI and Metallurgy Testing Report for Jiama Lower Grade Cu-Mo Hornfels Ore, compiled 

by NRIMM in November, 2011 

13.1.1 Mineralogy of Skarn Hosted Copper-Molybdenum Ore 

There are several copper minerals present, namely chalcopyrite, bornite, chalcocite, bismuth, tetrahedrite and covellite. 

The molybdenum minerals are mainly molybdenite with rarely oxidised molybdenum. Other metallic minerals include pyrite, 

galena, sphalerite, pyrrhotite, limonite and scheelite. Gangue minerals include quartz, calcite, dolomite and silicates. 

Molybdenite: a major molybdenum-bearing mineral, mainly disseminated between gangue particles (84.5% of total), 

partly included within the gangue interlocked with the chalcopyrite and secondary copper sulphide minerals, and rarely 

associating with pyrite and scheelite. It is variable in size and ranges between 0.01 to 0.053 mm (47.6% of total). It can be 

observed with surface oxidation in the form of molybdite. 

Secondary Copper Sulphide Minerals (bornite, chalcocite, covellite, tetrahedrite, etc): the secondary copper 

minerals contain most of the copper (1.03% Cu). These are embedded within each other, mainly with a metasomatic 

texture or metasomatic relict texture. They are finer in size than chalcopyrite, which mostly ranges from 0.01 to 0.053 mm 

(57.7%) in size and is unevenly disseminated. 

Chalcopyrite: a major copper mineral (0.91% Cu), mainly subhedral to xenomorphic granular, usually replaced by the 

secondary copper sulphide minerals and sometimes by pyrite. It is mainly distributed in the gangue and associated with 

the secondary copper sulphide minerals, pyrite and sphalerite, ranging in size between 0.01 to 0.053 mm (42.2% of total). 

It is unevenly disseminated and seldom present as a veinlet structure. 

Pyrite: it is a major sulphide mineral (0.74 % Fe), mostly ranging in size between 0.01 to 0.053 mm (58.2% of total) and is 

mainly distributed in the gangue with some replacement by chalcopyrite. 

13.1.2 Mineralogy of Hornfels Hosted Copper- Molybdenum Ore 

The hornfels hosted Cu-Mo ore has different characteristics with lower copper and molybdenum grades compared to the 

skarn hosted Cu-Mo ore. The main metallic minerals are chalcopyrite and pyrite, with a small amount of molybdenite, blue 

chalcocite, covellite and tetrahedrite. The gangue minerals are dominated by quartz and clay minerals, such as sericite. 

The chalcopyrite distribution has no close relationship with other metallic sulphides as it is finely distributed in the gangue. 

It was noted that some of the chalcopyrite was replaced with secondary copper minerals or limonite, which indicates that 

recovery of the copper would be more difficult. 




Page 33 

Molybdenite has a large size range and is low grade, and the distribution has no close relationship with either the 

chalcopyrite or pyrite, which indicates that recovery would be difficult. 

13.1.3 Mineralogy of Copper-Lead Zinc Ore 

The data provided to MMC included a limited amount of mineralogical information for copper-lead-zinc ores and was only 

contained in the Weizuo metallurgy testing report. MMC understands that the main minerals consist of the typical primary 

sulphides, e.g. galena, sphalerite and chalcopyrite. 

Galena is commonly present and relatively enriched. It is associated with sphalerite, chalcopyrite, and bornite as well as 

occurring in the gangue. The galena is dispersed between sulphide mineral particles as aggregates (0.01-3 mm), 

occasionally surrounded by covellite. 

Sphalerite is mainly associated with galena over a large range of sizes. It is distributed within the gangue as granular and 

irregular-shaped aggregates with galena, chalcopyrite and pyrite. In skarn blocks, it mainly occurs between mineral 

particles or in the micro cracks of garnets, sometimes with minute pyroxene crystals of enclosed. Some chalcopyrite is 

present as emulsion droplets ranging from 0.001-0.01 mm in size within sphalerite. 

13.2 METALLURGICAL TESTING 

13.2.1 Skarn Hosted Copper – Molybdenum Ore 

The proposed feed for the processing plant will consist of two Mo-Cu ore types, namely skarn and hornfels hosted, which 

exhibit different processing characteristics in terms of grade and hardness. The skarn hosted ore varies greatly in terms of 

hardness and grade, while the hornfels hosted ore is disseminated with consistently lower Mo and Cu grades. The testing 

showed different metallurgical responses between the two types of ores. 

A significant quantity of metallurgical testing had been conducted in the development of the current operation and 

subsequent optimisation testing was undertaken both internally and by Testing Institutes. A summary of the testing results 

is presented in Table 13-2, which showed that the tests have generally yielded a satisfactory result. The testing flowsheets 

and conditions to produce separate concentrates are presented in the following section. 

Table 13-2 Jiama Copper-Polymetallic Project - Cu-Mo Ore Processing Results Summary 

Data Sources Overall Recovery (%) Feed Grade (%) Concentrate Grade (%) 

Cu Mo Cu Mo Cu Mo 

2009 CGRI Tests 94.26 58.55 1.05 0.0531 31.96 45.66 

2011 CGRI Site Validation Tests 94.68 71.54 1.23 0.0320 33.32 49.80 

2011 Internal Lab Differential Flotation 94.22 73.20 1.05 0.0542 32.11 47.71 

2012 Internal Lab Differential Flotation 95.16 80.74 0.94 0.0360 32.23 43.49 

2010 Weizuo Tests 93.12 90.58 0.57 0.1140 25.33 49.15 

Source: Summary by MMC based on data provided by the Company 

Note: CGRI refers to Changchun Gold Research Institute 

Weizuo refers to Lhasa Weizuo Assaying and Testing Co., Ltd 

The basis for design of the proposed processing plant focused on two tests results from the 2009 CGRI Benchscale 

Testing programmes. 

While there has not been enough testing undertaken on representative samples of the deeper ore, which has a higher Cu 

and Mo grade, the current processing plant performance and previous testing results are sufficient to assume metallurgical 

recovery figures for deeper ores. 

13.2.2 2009 CGRI Bench Scale Testing Programme 

A comprehensive mineralogical study as well as bench scale testing was conducted by CGRI in September 2009 to 

provide the basic technical parameters for the development and design of the flotation operation. 

Based on observations, the skarn ore varies greatly in terms of hardness and grade. The head grade of testing samples 

(1.07% Cu, 0.054% Mo, 16.08g/t Ag and 1.05g/t Au) have a higher copper grade than the mine scheduling grades, while 

the molybdenum grade is similar. The details of the location of the drill core used to prepared samples for testing are not 

known and the nature of the sample representivity is not fully understood. MMC notes that the head grade of the testing 

samples are moderately higher than the LOM head grade average and further optimisation sampling may be required to 

further confirm actual metallurgical performance. 




Page 34 

The testing included grinding to P 70=74 microns for the Cu-Mo bulk flotation using one stage of roughing, three stages of 

scavenging and two stages of cleaning, as well as a subsequently regrinding to P 90=74 microns, followed by a Cu-Mo 

concentrate separation flotation using one stage of roughing, two stages of scavenging and eight stages of cleaning. 

Various processing conditions, such as grind size, reagent types, addition rates and combinations (collectors and regulator) 

as well as flotation time were investigated under standard flotation conditions. After standardising the flotation reagent 

types and dosages, open cycle tests at the selected primary and re-grind sizes were carried out to confirm the flotation 

performance. Locked cycle tests were then conducted to establish the impact of circulating loads including reagent buildup 

upon the flotation performance. The locked cycle testing results are summarised in Table 13-3, which showed that a 

94.22% copper recovery and a 73.2% molybdenum recovery were achievable at a grind size of P 70=74 microns with 

concentrate grades of 32.11% Cu and 47.71% Mo respectively. 

Table 13-3 Jiama Copper-Polymetallic Project - Locked Cycle Testing Results 

Products 

Mass 

Grade (%) Overall Recovery (%) 

(%) Cu Mo Au Ag Cu Mo Au Ag 

Feed 100 1.05 0.054 1.07 16.08 100 100 

Mo Concentrate 0.08 3.02 47.71 0.24 73.2 

Cu Concentrate 3.07 32.11 0.22 16.65 351.7 94.22 12.5 47.88 67.3 

Tailings 96.84 0.06 0.008 5.54 14.3 

Source: 2009 Metallurgy Testing Report by CGRI 

The occurrence of copper and molybdenum minerals in the concentrates was investigated to understand the reason for 

loss of value elements in the tailings. It was found that the loss of copper minerals in the tailings was mainly fine grained 

chalcopyrite that was associated with the gangue. The loss of molybdenum in the tailings mainly occurred due to 

encapsulation within gangue minerals as well as fine-grained molybdenite with contaminated surfaces. 

13.2.3 2011 CGRI Site Validation Testing Programme 

A continuous site validation test work programme was conducted to both demonstrate and optimise the flotation circuit 

performance. The testing programme used a similar flowsheet with similar testing conditions such as the grind size and 

reagent types and dosages as the 2009 CGRI laboratory testing. The main difference included using six stages of Mo 

cleaning compared with eight stages of cleaning in 2009 testing. The process plant validation testing results are 

summarised in Table 13-4, which confirmed that 94.68% Cu recovery and 71.45% Mo recovery were achievable at a grind 

size of P 70=74 microns; however at improved concentrate grades recoveries of 33.32% Cu and 49.8% Mo were achieved 

respectively. 

Table 13-4 Jiama Copper-Polymetallic Project - Plant Validation Testing Results 

Product Mass (%) 


Cu Mo Cu Mo 

2011 Validation Testing 

Feed 100 1.23 0.032 100 100 


Cu Concentrate 3.48 33.32 0.066 94.68 7.08 

Tailings 96.47 0.07 0.007 5.27 21.38 


The major source of copper concentrate revenue is the copper, with some contribution from gold and silver, while 

molybdenum is only paid for in the molybdenum concentrate (refer to Table 13-5). The impurity elements in the 

concentrate, namely arsenic (As 0.26%) exceeded the threshold level (

Page 35 

Table 13-5 Jiama Copper-Polymetallic Project - Concentrate Assays 

Element Cu Concentrate (%) Mo Concentrate (%) 

Cu 31.96 3.02 

Mo 0.18 45.66 

S 23.66 35.43 

As 0.07 0.26 

Pb 0.44 0.16 

Zn 0.64 0.05 

Fe 16.64 2.82 

CaO 8.23 2.52 

MgO 2.87 4.02 

SiO 2 12.46 5.59 

Al 2O 3 0.98 0.36 

Au (g/t) 16.65 

Ag (g/t) 351.70 


Regarding this issue the Design Institute has proposed two solutions, which include further processing testing/studies to 

lower arsenic in the molybdenum concentrate and negotiating with the smelter to cover the concentrate specification, 

product quantities, payment, smelting and treatment methods. 

13.2.4 2010 Weizuo Testing Programme 

A comprehensive mineralogical study as well as detailed variability testing was conducted by Hunan Huazhong Mining Co. 

Ltd. and Lhasa Weizuo Assaying and Testing Co., Ltd in May 2010 to investigate the metallurgical performance of various 

ore types and develop the comprehensive recovery of the polymetallics including Cu ,Mo, Pb, Zn, Au and Ag. 

The details of samples selected for testing and the associated representativity report were not available for review. The 

three composite samples, namely Tongshan Cu-Mo ore and Tongshan Cu-Pb-Zn ore as well as Qianshan Cu-Pb-Zn ore 

appear to be representative of the different ore types that would be mined. Based on observations, the skarn hosted ore 

varies greatly in terms of hardness and grade. The head grade of testing samples (0.57% Cu, 0.114% Mo, 11.2g/t Ag and 

0.09g/t Au) has a lower copper grade but higher molybdenum grade than the scheduled mining grade. 

Similar to the 2009 CGRI testwork, this programme included one stage grinding for the Cu-Mo bulk flotation, one stage of 

roughing, two stages of scavenging and three stages of cleaning as well as the Cu-Mo concentrate separation flotation, 

using one stage of roughing, two stages of scavenging and five stages of cleaning. 

Various processing conditions such as grind size, reagent types, addition rates and various combinations as well as 

flotation time were investigated under standard flotation conditions. 

Locked cycle test work was then conducted and the results are summarised in Table 13-6, which showed that 93.12% 

copper recovery and 90.58% molybdenum recovery were achievable after one stage of milling at a grind size of P 80=74 

microns to concentrates with grades of 25.33% Cu and 49% Mo respectively. 

Table 13-6 Jiama Copper-Polymetallic Project - Locked Cycle Testing Results 

Products 

Mass 


(%) Cu Mo Pb Zn Au(g/t) Ag(g/t) Cu Mo Pb Zn Au Ag 

Feed 100 0.57 0.114 0.16 0.11 0.09 11.2 100 100 100 100 100 100 

Cu Concentrate 2.11 25.33 0.092 3.28 2.87 1.38 413.5 93.12 1.7 43.99 55.28 33.19 77.88 

Mo Concentrate 0.21 0.21 49.155 0.1 0.07 0 12.3 0.08 90.58 0.13 0.13 0 0.23 

Tailings 97.68 0.04 0.009 0.09 0.05 0.06 2.51 6.81 7.71 55.88 44.58 66.81 21.89 

Source: Metallurgy Testing Report for Jiama Cu-Pb-Zn-Ag-Mo Polymetallic Ore, compiled by Weizuo in May, 2010 

A number of verification tests on the ores collected from the mining site were conducted to further investigate the grinding 

size, reagent type and addition point for optimising production. This included the Cu-Mo bulk flotation, Cu-Mo separation 

flotation, the regrind circuit and reagent addition methods. It was found the regrinding caused poor Mo flotation 

performance and has been removed from the flowsheet. MMC noted that an excessive number of sodium sulphide 

additions were made to several flotation stages, which is unnecessary and could be reduced in practice by employing 

suitable control systems. 




Page 36 

13.2.5 2011 Internal Laboratory Testing Programme 

This program aimed to develop the basic technical parameters and appropriate reagent regime. Variability testing was 

conducted by the company’s internal laboratories in 2011 based on Cu-Mo ore samples taken from the mining site. Only 

the recovery of copper and molybdenum was investigated. 

Similar to the 2009 CGRI testwork, this programme included a single stage of grinding to P 75=74 microns for the Cu-Mo 

bulk flotation, with one stage of roughing, two stages of scavenging and one stage of cleaning as well as regrinding to 

P 90=38/48 microns for the Cu-Mo concentrate separation consisting of one stage of roughing, two stages of scavenging 

and six stages of cleaning. 

The locked cycle testing results are summarised in Table 13-7, which showed that a copper recovery of 95.16% and a 

molybdenum recovery of 80.74% were achievable with one milling stage at a grind of P 80=74 microns at concentrate 

grades of 33.32% Cu and 43.49% Mo respectively. 

Table 13-7 Jiama Copper-Polymetallic Project - Differential Flotation Verification Testing Results 

Product Mass Grade (%) Overall Recovery (%) 

(%) Cu Mo Cu Mo 


Cu Concentrate 2.78 32.23 0.067 95.16 5.12 

Tailings 97.15 0.046 0.005 4.74 14.14 

Feed 100 0.94 0.036 100 100 

Source: Report for Verification Differential Flotation Testing of Jiama Cu-Mo Ores, compiled by Internal Testing Lab of the Laboratory in 

April, 2011 

The study has identified that the Cu-Mo separation flotation would cost reagent 12.81 RMB/t (Na 2S 9 RMB/t and collector 

ZG-2 3.66 RMB/t) for the Cu-Mo separation circuit. 

13.3 HORNFELS HOSTED LOWER MO GRADE ORE 

A conventional comprehensive mineralogical study as well as a bench scale testing programme was conducted by NRIMM 

in November 2011 to establish the process and the basic technical parameters for developing the flotation operation of 

lower grade hornfels Cu-Mo ore. 

The hornfels Cu-Mo ore exhibited different processing characteristics to that of the skarn hosted ores. The skarn hosted 

ore varies greatly in terms of hardness and grade, while the hornfels hosted ore is disseminated with consistently lower 

Mo and Cu grades. 

The composite samples appear to be representative of this part of the mining area, based on the sample collection 

statement provided by the Company. The head grade of the testing samples was 0.38% Cu and 0.015% Mo, which is 

consistent with the forecast mining grades. 

The testing programme employed the conventional processing option of a Cu-Mo bulk flotation followed by the separation 

flotation of the Cu-Mo bulk concentrate. The grinding options and optimised conditions tests such as reagent types (lime, 

butyl xanthate, aniline aerofloat, turpentine oil and sodium hexametaphosphate), addition rates and combinations as well 

as products were investigated for the production of a concentrate at reasonable recovery. 

The processing circuit only examined a grind size of P 70=74 microns for a Cu-Mo bulk flotation using one stage of 

roughing, three stages of scavenging and two stages of cleaning. The Cu-Mo separation flotation only focused on a 

preliminary rougher separation flotation. 

The locked cycle testing was only conducted for the Cu-Mo separation with the results summarised in Table 13-8, where 

an overall copper recovery of 82.53% and a molybdenum recovery of 45.73% was achieved to separate concentrates with 

grades of 21.42% Cu and 12.86% Mo respectively. 




Page 37 

Table 13-8 Jiama Copper-Polymetallic Project - Locked Cycle Testing Results for Lower Grade Mo Ore 

Product Mass (%) 

Grade (%) Stage Recovery (%) 

Cu Mo Cu Mo 

Cu-Mo Bulk Concentrate 1.52 20.85 0.52 83.41 54.23 


Copper Concentrate 96.50 21.42 0.086 98.95 15.58 

Tailings 98.48 0.06 0.0068 16.59 45.77 

Feed 100 0.38 0.015 100 100 

Source: Metallurgy Testing Report for Jiama Lower Grade Cu-Mo Hornfels Ore, compiled by NRIMM in November, 2011 

Another testing programme for Mo concentrate separation was undertaken recently by NRIMM, with 200 kg drill core 

samples using the optimal conditions of the previous testing. The closed cycle flotation employed a bulk flotation followed 

by Cu-Mo separation flotation using a sample with a head grade of 0.385% Cu and 0.015% Mo, which is similar to the 

ROM grade. The testwork produced a 47% Mo concentrate with a recovery of 52% and a copper recovery of 84%. 

A high level economic analysis based on the incremental costs (mainly reagents, concentrate costs not included) of 

separating the molybdenum from bulk flotation concentrate compared to the expected molybdenum revenue indicates that 

a feed grade of 0.015% Mo is the threshold grade for an economic separating. 

Although the geological grade of Au and Ag in the hornfels sourced copper concentrate is very low (gold < 0.1 g/t and 

silver < 1 g/t), modest precious metal recoveries have been found in testwork. Metallurgical testing on hornfels hosted 

samples with a head grade of 0.046g/t Au and 0.97g/t Ag, has achieved a gold recovery of 36% and a silver recovery of 

82.23% with a payable gold (Au 1.14 g/t) and silver (Ag 54 g/t) grades in the copper concentrate. 

13.4 COPPER-LEAD-ZINC ORE METALLURGICAL TESTING 

The copper-lead-zinc ores represent only 3% of the total ore resource, and should not be blended and treated with the 

copper-molybdenum ores because it would result in a poorer quality copper concentrate (containing lead and perhaps zinc) 

that would not attract the best payment. These ore types require a different processing route to maximise revenues (i.e. 

separate copper, lead and zinc concentrates). 

A comprehensive mineralogical study and bench scale testing of copper-lead-zinc ores was incorporated in the 2010 

Weizuo testing programme. Subsequently a significant quantity of metallurgical testing has been undertaken internally and 

by the BRIMM for the development of the current operation and subsequent optimisation tests. 

Some modified pilot plant testing for the copper-lead-zinc ores was undertaken by the Company processing engineers as 

well as the BRIMM. After the differential flotation process option had been identified by laboratory testing, a pilot plant with 

a capacity of 600 tpd was established, based on modification of the old Huatailong processing plant. Metallurgical testing 

was focused on processing studies comparing bulk flotation with differential flotation. 

The lead recovery under bulk flotation option (Pb 90. 27%) was substantially higher than that for the differential flotation 

method (Pb 80.54%). The silver assay and recovery in the lead concentrate were also significantly higher (990.0 g/t and 

91.51% versus 749.5 g/t and 64.57%) than the differential flotation approach. Therefore, the bulk flotation approach has 

been selected for the Jiama ores as this method will yield significantly higher net smelter returns. 

13.4.1 BRIMM Site Duplication Testing Programme 

A site validation testing programme was conducted by the BRIMM in April 2011 based on the previous testing results to 

confirm the processing options and provide a basis for the plant modification. 

The process is copper-lead bulk flotation followed by copper-lead separation flotation and zinc flotation. The testing 

programme was focused on the validation of the previous processing circuit. The locked cycle testing achieved a copper 

recovery of 87.81%, a lead recovery of 89.96% and a zinc recovery of 70.02% at a grind size of P 70=74 microns to 

concentrates with grades of 20.4% Cu, 85.59% Pb and 42.4% Zn respectively (refer to Table 13-9). 




Page 38 

Table 13-9 Jiama Copper-Polymetallic Project - All Recycle Water Locked Cycle Testing 

Products Mass (%) 

Grade (%) Recovery (%) 

Cu Pb Zn Au Ag Cu Pb Zn Au Ag 

Feed 100 0.46 3.72 0.66 0.26 71.43 100 100 100 100 100 

Pb Concentrate 3.91 0.6 85.59 0.34 0.04 1,053.14 5.10 89.96 2.01 0.60 57.65 

Cu Concentrate 1.98 20.4 8.46 5.54 1.9 471.17 87.81 4.50 16.62 14.47 13.06 

Zn Concentrate 1.09 0.29 0.63 42.40 0.10 24.95 0.69 0.18 70.02 0.42 0.38 

Tailings 93.02 0.037 0.21 0.076 0.24 22.2 7.48 5.25 10.71 85.86 28.91 

Source: Report for Site Duplicate Testing of Jiama Cu-Pb-Zn Polymetallic Ores, compiled by BRIMM in April, 2011 

Based on the results of these studies, a plan for modification of the pilot processing plant was proposed. It was 

recommended that the tailings of Cu-Pb bulk flotation were not thickened before reporting to the zinc flotation circuit. It 

was also found that there was no requirement of thickening of Cu-Pb bulk concentrates before the subsequent separation 

circuit. 

13.4.2 Internal Laboratory Testing Programme 

Two metallurgical testing programmes examined two process options, namely all differential flotation to produce separate 

copper, lead and zinc concentrates and a copper-lead bulk flotation-zinc flotation, based on stockpiled Cu-Pb-Zn ore 

samples. The testing was undertaken internally. 

The locked cycle testing results of the two approaches achieved excellent copper recoveries and metallurgical 

performances (refer to Table 13-10 and Table 13-11). The first process option, using both fresh water and recycled water, 

has achieved similar recoveries. The second processing circuit resulted in poor zinc recovery performance, with a copper 

recovery of 83.05%, a lead recovery of 91.52% and a zinc recovery of 50.82%, based on a grind size of P 74=74 microns, 

to concentrates with grades of 29.66% Cu, 67.24% Pb and 40.85% Zn respectively. 

Table 13-10 Jiama Copper-Polymetallic Project - Locked Cycle Tests (Differential Flotation) 

Product Mass Grade (%) Recovery (%) 

(%) Cu Pb Zn Cu Pb Zn 

Fresh Water 

Feed 100 0.50 3.00 1.04 100 100 100 

Cu Concentrate 1.84 23.77 5.43 3.10 87.47 3.33 5.48 

Pb Concentrate 3.37 0.52 77.18 1.31 3.50 86.70 4.24 

Zn Concentrate 1.79 0.3 3.92 48.67 1.07 2.34 83.77 

Tailings 93.00 0.04 0.24 0.07 7.44 7.44 6.44 

85% Recycle Water 

Feed 100 0.50 3.02 1.18 100 100 100 




Tailings 92.67 0.046 0.18 0.08 8.53 5.52 6.28 

Source: Report for Preferential Flotation Verification Testing of Jiama Cu-Pb-Zn Polymetallic Ores, compiled by Internal Testing 

Laboratory in April, 2011 

Table 13-11 Jiama Copper-Polymetallic Project – Validation Locked Cycle Tests (Bulk Flotation) 

Product Mass (%) Grade (%) Recovery (%) 

Cu Pb Zn Cu Pb Zn 

Feed 100 0.50 3.13 1.27 100 100 100 




Tailings 92.76 0.04 0.09 0.45 7.42 2.67 32.87 

Source: Report for Bulk Flotation Options Testing of Jiama Cu-Pb-Zn Polymetallic Ores, compiled by Internal Testing Laboratory in April, 

2011 

Further laboratory testing has achieved a copper concentrate with grades of 23.8% Cu, 4.61g/t Au and 473 g/t Ag, a 

lead concentrate with grades of 77% Pb , 0.32 g/t Au and 836 g/t Ag and a zinc concentrate with grades of 48.7% Zn with 

recoveries of 88.1% Cu , 77.2% Pb and 83.8% Zn respectively. An overall gold recovery of 42% (36.5% to the copper 

concentrate) was found, which is expected to be increased to 45% (39.2% to the copper concentrate) with optimisation 

and an overall silver recovery of 79% (17% to the copper concentrate). 




Page 39 

13.4.3 Pilot Plant Testing Programme 

Based on the testing results produced by the internal laboratory and the Design Institutes, a pilot plant for the copper-leadzinc 

flotation testing was established by modifying the old Huatailong processing plant (capacity of 600 tpd). Four pilot 

plant runs were undertaken by the company’s processing engineers using mined ore samples. It should be noted that the 

test samples were oxidised which affected the results, particularly for the lead and the zinc. 

The testing focused on the differential flotation process to produce three separate concentrates using four different water 

sources in four tests as follows: 

 

 

 

 

No.1 Stage - Pilot Testing by 9 Shifts (sample quantity 1,442 t) using fresh water; 

No.2 Stage - Pilot Testing by 28 shifts (sample quantity 4,377t) using thickener water; 

No.3 Stage - Pilot Testing by 13 shifts (sample quantity 2,103 t) using Huatailong 60 m diameter thickener water; 

and 

No.4 Stage - Pilot Testing by 13 shifts (sample quantity 1,907 t) using Huatailong 30 m diameter thickener water. 

The result of the pilot testing is summarised in Table 13-12, which shows that reasonable copper recoveries (73%-88%) 

were achieved at marketable copper grades (22%-25%). The lead concentrate is also marketable with lower recoveries 

(57%-63%) while it was not possible to produce a marketable zinc concentrate. These results are not as good as the 

laboratory testing results and demonstrate the impact of sample oxidisation, which causes difficulties in the flotation of 

lead and zinc. 

Table 13-12 Jiama Copper-Polymetallic Project - Differential Flotation Pilot Testing Results 

Grade (%) Recovery (%) 

Products Mass (%) 

Au Ag 

Cu Pb Zn 

(g/t) (g/t) 

Cu Pb Zn Au Ag 

No.1 Stage 

Feed 100 0.44 1.45 0.36 0.33 31.00 100 100 100 100 100 

Cu Concentrate 1.75 22.28 7.67 3.75 4.97 436 88.61 9.26 18.23 26.36 24.87 

Pb Concentrate 1.32 0.37 69.21 2.30 1.17 759 1.11 63.00 8.43 4.68 32.63 

Pb-Zn Bulk 

Concentrate 

0.21 1.03 13.42 17.15 1.13 263 0.49 1.94 10.00 0.72 1.80 

Tailings 96.72 0.049 0.39 0.23 0.24 13.00 10.77 26.01 61.79 70.34 40.60 

No.2 Stage 

Feed 100 0.52 1.43 0.37 0.37 33.00 100 100 100 100 100 



Pb-Zn Bulk 

Concentrate 

0.59 2.70 16.81 8.48 2.24 360 3.06 6.94 13.52 3.57 6.51 

Tailings 96.11 0.055 0.294 0.205 0.243 12.00 10.17 19.76 53.25 63.12 35.34 

No.3 Stage 

Feed 100 0.38 1.67 0.48 0.32 34.00 100 100 100 100 100 



Pb-Zn Bulk 

Concentrate 

0.61 1.03 15.02 28.16 0.73 291 1.65 5.49 35.79 1.39 5.17 

Tailings 96.67 0.062 0.519 0.177 0.238 14.00 15.77 30.04 35.65 71.90 38.85 

No.4 Stage 

Feed 100 0.39 1.29 0.38 0.17 16.00 100 100 100 100 100 



Pb-Zn Bulk 

Concentrate 

0.12 1.60 13.14 41.65 0.92 514 0.49 1.22 13.15 0.65 3.76 

Tailings 97.4 0.08 0.419 0.156 0.145 6.00 19.98 31.64 39.99 83.08 34.16 

Source: Stages Report for All Preferential Flotation Pilot Testing of Jiama Cu-Pb-Zn Polymetallic Ores, compiled by Internal Engineers of 

the Company in Nov, 2011 




Page 40 

14 MINERAL RESOURCE ESTIMATES 

A Mineral Resource estimate has been independently completed by MMC in accordance with the guidelines provided in 

the NI 43-101, Standards of Disclosure for Mineral Projects, dated June 30, 2011. Information contained in this Report is 

based on information provided to MMC by the Company and verified by MMC. All statistical analysis and Mineral 

Resource estimations were carried out by MMC. MMC developed three dimensional digital resources for the 

concentration of the Cu, Mo, Pb, Zn, Au, Ag metal and developed the resource estimates based on the statistical analysis 

of the data provided. MMC believes the Mineral Resource estimate meets general guidelines for NI 43-101 compliant 

resources for the Measured, Indicated and Inferred confidence levels. 

14.1 DATA 

14.1.1 Sample Data 

All drill hole collar, survey, assay and geology records were supplied to MMC in Excel spreadsheet format by the site 

geologists and engineers. All Mineral Resource work conducted by MMC was based on data received as of April, 2012. 

An Access database was created, and is managed, by MMC. 

The database contains the records from 328 surface diamond drill holes (“DD”) for a total of 122,653 m and 10 trenches 

for a total of 349 m. A summary of the drill hole database is shown in Table 14-1. 

Table 14-1 Jiama Copper-Polymetallic Project - Summary of Data Used in Resource Estimate. 

Type 

In Database 

Number 

Total Length (m) 

Trenching 10 349 

Pre-2011 drilling 306 122,653 

2011 drilling 22 10,720 

Total 338 133,721 

No data was excluded from the model, with the exception of some historical drill holes completed in the 1990’s, which 

were considers to be of sub-standard quality. These holes have been omitted from the Table 14-1. 

14.1.2 Bulk Density Data 

A total of 471 bulk density determinations have been completed with 354 from the Skarn, 82 from the Hornfels Hosted 

mineralisation and 35 from the Porphyry mineralisation. MMC believes these determinations are representative of the 

underlying geology and, considering the style of mineralisation, are representative of the deposit and the rock type from 

which they were sampled. Table 14-2 presents the average bulk density for each rock type and Figure 14-1 displays 

histograms of the bulk density data. 

Table 14-2 Jiama Copper-Polymetallic Project – Bulk Density by Rock Type 

Rock type Number Average (g/cu.cm) 

Skarn 354 3.13 

Hornfels 82 2.63 

Porphyry 35 2.37 




Bulk Density Histogram of Skarn 

Frequency 

30 

25 

20 

15 

10 

5 

0 

Bulk Density( g/cu.cm ) 

Bulk Density Histogram of Hornfels 

Frequency 

20 

18 

16 

14 

12 

10 

8 

6 

4 

2 

0 


Bulk Density Histogram of Porphyry 

14 

12 

10 

Frequency 

8 

6 

4 

2 

0 


FIGURE 14-1 

China Gold International Resources Corporation Limited 


Histograms of Bulk Density 

Project No : ADV-HK-03709

Page 42 

14.2 GEOLOGY AND RESOURCE INTERPRETATION 

Geological wireframes for the Skarn, Hornfels and Porphyry hosted mineralisation were created by MMC using the 

geological logging of the drill core. These wireframes were used to guide the mineralised envelopes, which were 

interpreted using a nominal ppm 0.1% Cu grade cut-off selected from log-probability plots to separate background from 

mineralised population. No independent wireframes were constructed for Mo, Pb, Zn, Au and Ag as all this mineralisation 

fell within the Cu mineralised envelopes. 

Resource outlines were generally extrapolated to a distance half-way between mineralised and un-mineralised 

holes/sections or 100 meters from the nearest hole on the edges of the mineralisation, where no un-mineralised drill holes 

were available to limit the interpretation. 

MMC determined the extent of weathering within the deposit to be minimal and as a result it was not incorporated in the 

geological interpretation. 

14.3 PREPARATION OF WIREFRAMES 

A drill hole and trench sample layout plan for the Project is displayed in Figure 10-1. This data formed the basis of 

sectional interpretations of the mineralisation. The interpreted sectional outlines were manually triangulated to form the 

wireframes. To form ends to the wireframes, the end section strings were copied to a position midway to the next section 

or 100 meters from the nearest drill hole and adjusted to match the overall interpretation of the mineralisation. 

The wireframed objects were validated using Surpac software and set as solids. 

14.4 SAMPLE STATISTICS 

14.4.1 General 

The mineralised envelopes were used to code the drill hole and trench database to allow identification of the resource 

domains. Separate intersection files were generated for each mineralised envelope. A review of sample length within 

these files was carried out to determine the optimal composite length. This review determined that a variety of sample 

lengths were used during the sampling, these lengths ranged from less than 1 m to over 5 m, however the majority were 

either 1 m or 2 m. In particular, a variety of sample lengths were utilized during the 2008 to 2011 drilling program, the 

majority of which ranged from 1 to 2 m. Although a significant number of samples have lengths less that 2 m (Figure 14- 

2), MMC believes 2 m to be the optimal composite length due to the weighted sample length and the mining method 

planned to be employed for the Project, namely large scale open cut and underground mining. Surpac software was then 

used to extract downhole composites within the intervals coded for each domain. 

The composites were checked for spatial correlation with the surfaces, the location of the rejected composites and zero 

composite values. 

14.4.2 Sample Support and Drilling Types and Generations 

Due to the low number of trenches, the location and the large number of drill holes, MMC considers the trench data to 

have minimal influence on the global or local remaining resource. In addition, the vast majority of drilling has been 

completed following the same drilling, sampling and analytical procedures and completed by the same contractor. As a 

result MMC regards that no sample support issues are present within the dataset. 




Page 43 

Figure 14-2 Jiama Copper-Polymetallic Project – Raw Sample Lengths. 

14.5 DEPOSIT STATISTICS 

All composite sample data for the deposit was imported into Geo-Access Software for analysis. Statistics were produced 

for the Cu, Mo, Au, Ag, Pb and Zn composites within each domain, as shown in Table 14-3. 

Analysis of the descriptive statistics indicates that the elements within each domain appear to have a log normal 

distribution with moderate to high variability. A reasonably high range, coefficient of variation and variance is seen in all 

elements, particularly Pb and Zn. This interpretation is further supported when the log probability plots and histograms are 

analysed, resulting in the interpretation that all elements have a relatively lognormal distribution and a highly positively 

skewed distribution. Figures 14-3 and Figures 14-4 display histograms and log probability plots for Cu and Mo for each 

domain. 

MMC interprets these statistics to be representative of the style of mineralisation observed at the Jiama deposit and is 

consistent with these styles of mineralisation. Of particular note is the high coefficient of variation of observed for Pb and 

Zn. This indicates that upon receipt of additional drill information further internal mineralisation domaining of these areas 

may be warranted. 




Page 44 

Table 14-3 Jiama Copper-Polymetallic Project - Descriptive Statistics for the Project 

Type Skarn Hornfels Hosted Porphyry Mineralisation 

Statistic Cu Mo Au Ag Pb Zn Cu Mo Au Ag Pb Zn Cu Mo Au Ag Pb Zn 

Number 6,415 6,415 6,415 6,415 6,415 6,415 21,640 21,640 21,640 21,640 21,640 21,640 3,156 3,156 3,156 3,156 3,156 3,156 

Minimum 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0.23 0 0 

Maximum 40.04 3.15 50.18 743.5 29.38 19.01 5.27 1.54 6.92 67.8 3.71 6.92 3.03 2.04 5.57 60.4 2.66 5.57 

Mean 0.69 0.04 0.25 14.15 0.14 0.08 0.22 0.02 0.02 1.12 0.01 0.02 0.16 0.03 0.02 1.03 0.01 0.02 

Median 0.31 0.02 0.08 5.86 0.01 0.01 0.17 0.01 0.01 0.83 0 0.01 0.12 0.01 0.01 0.73 0.01 0.01 

Std Dev 1.26 0.1 0.94 26.81 0.97 0.5 0.17 0.04 0.12 1.58 0.04 0.12 0.16 0.06 0.16 2.19 0.06 0.16 

Variance 1.59 0.01 0.88 718.67 0.94 0.25 0.03 0 0.01 2.5 0 0.01 0.03 0 0.03 4.79 0 0.03 

Std Error 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 

Coeff Var 1.83 2.25 3.72 1.9 7.08 6.24 0.76 1.75 4.74 1.41 5.93 4.74 1.05 2.16 7.19 2.13 6.24 7.19 

Sichel Stats 

Mean 0.79 0.06 0.28 15.02 0.04 0.03 0.22 0.02 0.03 1.05 0.01 0.03 0.18 0.05 0.03 0.92 0.01 0.03 

V 2 2.71 2.13 1.89 2.89 1.76 0.43 1.39 0.71 0.23 0.43 0.71 1.38 3.57 0.92 0.26 0.5 0.92 

Gamma 2.72 3.87 2.9 2.57 4.24 2.41 1.24 2 1.42 1.12 1.24 1.42 1.99 5.97 1.59 1.14 1.29 1.59 

Percentiles 

10 0.05 0 0 0.74 0 0 0.08 0 0 0.59 0 0 0.02 0 0 0.49 0 0 

20 0.1 0 0.01 1.4 0 0.01 0.11 0.01 0 0.67 0 0 0.03 0 0 0.56 0 0 

30 0.15 0.01 0.03 2.52 0 0.01 0.13 0.01 0 0.73 0 0 0.06 0 0 0.61 0 0 

40 0.22 0.01 0.05 4.04 0.01 0.01 0.15 0.01 0.01 0.78 0 0.01 0.09 0.01 0 0.67 0 0 

50 0.31 0.02 0.08 5.86 0.01 0.01 0.17 0.01 0.01 0.83 0 0.01 0.12 0.01 0.01 0.73 0.01 0.01 

60 0.45 0.02 0.12 8.59 0.01 0.01 0.2 0.02 0.02 0.9 0 0.02 0.15 0.02 0.01 0.79 0.01 0.01 

70 0.66 0.04 0.2 12.83 0.02 0.02 0.24 0.02 0.02 0.99 0.01 0.02 0.19 0.03 0.02 0.88 0.01 0.02 

80 0.99 0.06 0.31 19.42 0.03 0.03 0.3 0.03 0.03 1.24 0.01 0.03 0.24 0.04 0.02 1.02 0.01 0.02 

90 1.62 0.11 0.57 34.16 0.1 0.09 0.41 0.05 0.04 1.74 0.01 0.04 0.34 0.07 0.03 1.44 0.01 0.03 

95 2.5 0.17 0.91 52.75 0.3 0.23 0.52 0.07 0.06 2.36 0.01 0.06 0.42 0.09 0.05 2.07 0.02 0.05 

97.5 3.48 0.27 1.34 78.9 0.9 0.57 0.63 0.11 0.1 3.27 0.02 0.1 0.54 0.14 0.08 3.1 0.04 0.08 

99 5.05 0.41 2.28 127.58 2.99 1.59 0.8 0.17 0.22 5.13 0.04 0.22 0.65 0.21 0.17 5.08 0.09 0.17 


This Report has been prepared for the sole use of China Gold and must be read in its entirety and is subject to the third party disclaimer clauses 

contained in the body of this Report.

Cu 

Mo 

Skarn 

5 

5 

4 

4 

Frequency % 

3 

2 

Frequency % 

3 

2 

1 

1 

0 

0.0001 0.001 0.01 0.1 1 10 100 

Cu % 

0 

0.0001 0.001 0.01 0.1 1 10 

Mo % 

Hornfel 

10 

5 

8 

4 

Frequency % 

6 

4 

Frequency % 

3 

2 

2 

1 

0 

0.0001 0.001 0.01 0.1 1 10 

Cu % 

0 

0.000001 0.00001 0.0001 0.001 0.01 0.1 1 10 

Mo % 

Porphyry 

5 

5 

4 

4 

Frequency % 

3 

2 

Frequency % 

3 

2 

1 

1 

0 

0.0001 0.001 0.01 0.1 1 10 

Cu % 

0 

0.00001 0.0001 0.001 0.01 0.1 1 10 

Mo % 

FIGURE 14-3 




Histograms of Cu and Mo

Cu 

Mo 

100 

100 

10 

10 

1 

1 

D2 

0.1 

D2 

0.1 

0.01 

0.01 

0.001 

0.001 

0.0001 

0.0001 

1 2 5 10 30 50 70 90 95 98 99 1 2 5 10 30 50 70 90 95 98 99 

Probability % Probability % 

10 

10 

1 

1 

0.1 

D2 

0.1 

0.01 

0.01 

0.001 

0.0001 

0.001 

0.0001 

10 

1 2 5 10 30 50 70 90 95 98 99 

0.00001 

0.000001 

1 2 5 10 30 50 70 90 95 98 99 


10 

1 

1 

0.1 

0.1 

D2 

D2 

D2 

0.01 

0.01 

0.001 

0.001 

0.0001 

0.0001 

1 2 5 10 30 50 70 90 95 98 99 1 2 5 10 30 50 70 90 95 98 99 


FIGURE 14-4 




Log Probability Cu and Mo

Page 47 

14.6 METALS CORRELATION 

There is generally a poor correlation between metals within the Jiama deposit with only Cu and Ag displaying a 

reasonable correlation (Table 14-4). The generally poor correlation is consistent with the observed zonation of 

mineralisation. It can be observed that there are generally distinct mineralisation zonation’s within the domains and this 

would suggest that the deposit has formed through several different mineralisation events. 

Table 14-4 Jiama Copper-Polymetallic Project – Metals Correlation Matrix. 

Cu Mo Au Ag Pb 

Mo 

Au 

0.03 

0.52 0.01 

Ag 0.81 0.03 0.51 

Pb 0.07 0.01 0.02 0.31 

Zn 0.09 0 0.02 0.29 0.46 

14.7 HIGH GRADE CUTS 

Visual analysis of the grade distributions within drill holes indicates that the high grade mineralisation outside the skarn 

zone occurs as less continuous isolated high grade samples surrounded by low grade material for all metals. This is 

significantly different to continuous higher grades observed within the skarn zone, however these grades have no 

significant influence of the grade distribution, and as shown in the graphs no distinct breaks can be interpreted. As a 

result MMC considers there to be no outliers within the distributions for the Hornfels or Porphyry hosted mineralisation for 

any of the metals. 

The high grade cut analysis completed by MMC for the skarn mineralisation included evaluation of histograms, log 

probability plots and descriptive statistics. Analysis of the distributions for the different mineralisation types indicates a 

distinctive break in the log probability plot (Figure 14-4) of the Cu grade at 25 % for the Skarn type, while analysis of the 

graphs for Mo, Pb, Zn, Au and Ag (Figure 14-4) indicate similar distinct breaks can be interpreted. Visual analysis of the 

drill holes indicates that the grades above these grades are isolated high grade assays, rather than continuous zones of 

extreme high grade. As a result, MMC considers the samples above these grades to be outliers to the distributions and 

appropriate for high grade cuts as shown in Table 14-5. 

Table 14-5 Jiama Copper-Polymetallic Project - High Grade Cuts Applied to Skarn Composites 

Element Rock type High Grade Cut 

Cu (%) Skarn 25 

Mo (%) Skarn 2 

Au (g.t) Skarn 20 

Ag (g/t) Skarn 400 

Pb (%) Skarn 20 

Zn (%) Skarn 10 

14.8 GEOSPATIAL ANALYSIS 

Due to the style of mineralisation found within the deposit three geospatial analyses were completed, these were: 

 

 

 

composites within the Skarn zone, 

composites within the Hornfels hosted zone, and 

composites within the Porphyry zone. 

The geospatial analysis of the separate mineralisation styles indicated that reasonable continuity could be interpreted for 

Cu and Mo in the Skarn and Hornfels hosted mineralisation and no robust variograms could be interpreted for the 

Porphyry zone. The Porphyry zone was assigned the variogram parameters of the Hornfels hosted zone. Robust 

variograms could not be generated for Au, Ag, Pb and Zn for any of the three lithological zones. 

The interpreted orientation of the majority of the mineralisation was supported when the datasets was analysed. The 

interpretation of the resultant semi-variograms indicated that the nugget was low at 10% for Cu and Mo, and major and 

semi-major axis’s are in the horizontal plane and have similar ranges. This resulted in a flat lying search ellipse with no 

anisotropy in the horizontal plane. 

The interpreted major and semi major direction is consistent with the interpreted geology of the deposit where the Skarn is 

relatively flat lying and the Hornfels hosted mineralisation displays internal mineralisation bands that are also relatively 

horizontal. Interpretation of the minor direction indicated a range that was significantly shorter than that of the major and 




Page 48 

semi major directions. The interpreted variogram parameters are shown in Table 14-6 and the interpreted model 

graphically for the Skarn in Figure 14-5. 

Table 14-6 Jiama Copper-Polymetallic Project - Interpreted Skarn Variography Parameters 

Rock type Nugget 

Structure 1 Structure 2 

Sill Range major/semi major/minor Sill Range major/semi major/minor 

Skarn Cu 0.1 0.34 148.5 1 10 0.56 201 1 10 

Skarn Mo 0.1 0.41 137.5 1 10 0.49 356.5 1 10 

Rock type Nugget 

Structure 1 Structure 2 

Sill Range major/semi major/minor Sill Range major/semi major/minor 

Hornfels Cu 0.1 0.48 190 1 10 0.42 290 1 10 

Hornfels Mo 0.1 0.44 180 1 10 0.46 390 1 10 




Gamma(*) 

Gamma(*) 

(Downhole Dir)-90-->000: Log Continuity for Cu 

Domain Skarn_shallow 

1.25 

Lag 

4000 

2.0 

1.00 

0.75 

+ 

+ 

+ 

Sample Separation (m) 

+ 

3500 

2500 

0.50 

1500 

+ 

Sph(0.33, 6) 

1000 

0.25 

500 

+ 

N(0.1) 

0.00 

0 

0 5 10 15 20 25 30 35 40 45 50 55 60 

1.25 

1.00 

0.75 

0.50 

0.25 

Sph(0.24, 18.5) 

(Downhole Dir)-90-->000: Log Continuity for Mo 


Sph(0.5, 5.5) 

N(0.1) 

0.00 

0 5 10 15 20 25 30 35 40 45 50 


Lag 

2.0 

Sph(0.33, 35) 

3000 

2000 

50000 

45000 

40000 

35000 

30000 

25000 

20000 

15000 

10000 

5000 

0 

Pair Counts 

Pair Counts 

Gamma(*) 

Gamma(*) 

1.25 

1.00 

0.75 

0.50 

0.25 

+ 

+ 

+ 

+ 

Sph(0.42, 201.5) 

+ 

Lag 

2.0 

50000 

45000 

40000 

35000 

30000 

25000 

Sph(0.54, 64.5) Sph(0.54, 144) 

20000 

0.50 

15000 

10000 

50000 

45000 

40000 

35000 

30000 

25000 

Sph(0.41, 137.5) 20000 

0.50 

Sph(0.41, 84) 

15000 

10000 

5000 

N(0.1) 

0.00 

0 

0 50 100 150 200 250 300 350 400 450 500 550 600 


Pair Counts 

5000 

+ + 

5000 

N(0.1) 

N(0.1) 

0.00 

0 

0.00 

0 

0 50 100 150 200 250 300 350 400 450 500 0 50 100 150 200 250 300 350 400 450 500 



1.25 

1.00 

0.75 

0.50 

0.25 

(Direction 1) 00-->120: Log Continuity for Cu 


(Direction 1) 00-->120: Log Continuity for Mo 


Sph(0.49, 356.5) 

Lag 

2.0 

Pair Counts 

Gamma(*) 

Gamma(*) 

1.25 

1.00 

0.75 

0.25 

1.25 

1.00 

0.75 

0.25 

+ 

(Direction 2) 00-->030: Log Continuity for Cu 


Lag 50000 

2.0 

45000 

N(0.1) 

+ 

+ 

+ 

Sph(0.42, 2055) 

(Direction 2) 00-->030: Log Continuity for Mo 


+ 

Lag 

2.0 

Sph(0.49, 364) 

0.00 

0 50 100 150 200 250 300 350 400 450 500 550 600 


40000 

35000 

30000 

25000 

20000 

15000 

10000 

50000 

45000 

40000 

35000 

30000 

25000 

20000 

15000 

10000 

5000 

0 

Pair Counts 

Pair Counts 

FIGURE 14-5 




Graphical Represention of Variography Mo

Page 50 

14.9 RESOURCE ESTIMATION 

14.9.1 Block Model 

One Surpac block model was created to encompass the full extent of the mineralisation within the Jiama Project. The 

block model origin and extents and attributes are listed in Table 14-7. 

Table 14-7 Jiama Copper-Polymetallic Project - Block Model Parameters 

Model Names 

jiama_20120511.mdl 

Northing Easting Elevation 

Minimum Coordinates 3,286,200 16,378,100 4000 

Extent (m) 3,600 3,500 1400 

Block Size (m) (Sub-blocks) 25 (12.5) 25 (12.5) 5 (2.5) 

Rotation (degrees) 0 

Block Attributes: 

cu_cut Reportable Cu % grade 

mo_cut Reportable Mo % grade 

au_cut Reportable Au g/t grade 

ag_cut Reportable Ag g/t grade 

pb_cut Reportable Zn % grade 

zn_cur Reportable Pb % grade 

class JORC classification code (1 = mea, 2 = ind, 3 = inf) 

pod domain (air, above, below, between) 

bd bulk density (t/cu.m) 

type air, ore, waste 

litho sk, hf, py 

mined y,n 

licence min, exp, n 

pass Estimation pass 

14.9.2 Block Size 

The parent block size was determined based on the drill spacing and geological variability of the deposit. A significant 

number of drill holes have a spacing of 50 m or less, the vast majority having been drilled within the area of the pits. 

Given this and the variability of mineralisation and size of the vein sets, MMC considered a block size of 25m (northing) by 

25 m (easting) by 5 m (vertical) to be appropriate. 

14.9.3 Estimation Parameters 

For all mineralisation envelopes interpreted within the Project, the resource objects were used as hard boundaries in the 

interpolation of the metals. That is, only grades inside each object were used to interpolate the blocks inside the 

envelopes. The Ordinary Kriging (OK) algorithm was selected for Cu and Mo interpolation due to the number of samples 

and the adequate interpreted geospatial analysis. The OK algorithm was utilised to minimise over smoothing within the 

estimate. The inverse distance method with a power of 2 was used to estimate Au, Ag, Pb and Zn as no robust geospatial 

analysis on these elements was generated. MMC considers the inverse distance method to be suitable for estimation of 

these secondary elements. 

An anisotropic search based on the geospatial analysis was used to estimate a first pass radius of 125 m along the major 

direction of continuity and drill density through the mineralised zone, with a search radius of 250 m used for the second 

pass and a final pass of 500 m. The minimum number of samples was 12 for the first 2 passes, with a maximum of 25 

samples. For the third pass a minimum of 1 sample was used to fill the remainder of blocks. 

The search parameters are shown in Table 14-8. 




Page 51 

Table 14-8 Jiama Copper-Polymetallic Project - Block Model Search Parameters 

Parameter 

All Rock Types 

Pass 1 Pass 2 Pass 3 

Search Type 

anisotropic 

Bearing 120 

Dip 0 

Plunge 0 

Major-Semi Major Ratio 1 

Major-Minor Ratio 1 

Search Radius 125 250 500 

Minimum Samples 12 12 1 

Maximum Samples 24 24 24 

maximum Per Hole 999 999 999 

Block Discretisation 

4 X by 4 Y by 2 Z 

14.9.4 Density 

MMC considers that the bulk densities for each rock type as outlined in Section 14.1.2 are representative as they are 

appropriate to the style of mineralisation found. As a result MMC utilised the average of the bulk densities from each rock 

type in the block model. 

14.9.5 Resource Classification 

A significant number of holes have been completed from surface on the deposit. Drilling was undertaken in a number of 

phases and on a number of spacings, as a result sample density is variable with some areas having dense coverage while 

others are quite sparse. 

As a result of this sample density variability MMC constrained the geospatial analysis of the grade within the densely 

populated areas to limit the effect of the variable sample spacing. This detailed statistical analysis in addition to the 

analysis of the recent production data for Cu, Pb and Zn suggested that sample spacings of less than 60 m, 120 m and 

250 m are appropriate for classification of Measured, Indicated and Inferred Mineral Resources respectively, which would 

be compliant with the recommended guidelines of the NI 43-101 standards. These distances were based on the semivariogram 

ranges for the major direction of continuity and the visual inspection of the grade within the drill hole. 

During the review of the data MMC noted that the Au and Ag mineralisation had a significantly higher special variability 

than the other elements. As a result MMC has classified the Au and Ag resource separately this classification takes into 

account the proposed large scale mining techniques where Au and Ag will only be credits to the overall products from the 

operations. Sample spacings of less than 120 m and 250 m are appropriate for classification of Indicated and Inferred 

Mineral Resources respectively for Au and Ag. MMC has assumed that Au and Ag will not be used as a single cut-off 

grade for a selected mining block. 

14.9.6 Model Validation 

To check that the interpolation of the block model correctly reflects the drilling data, validation was carried out using the 

following steps: 

 

 

 

Swath Plots; 

Grade Comparison by Domain; 

Visual Inspection of the Blocks; 

Swath Plots 

The composites were compared with the block model data by northing and elevation in the swath plots. These plots 

highlight that the estimates compare relatively well for the majority of composites, however they do highlight the smoothing 

of the interpolation resulting from the OK estimation technique. 

Grade Comparison by Domain 

Comparison of the block values and composites results in a relatively good correlation (Table 14-9), with block model 

grades comparing quite well with the composites which MMC considers acceptable for the estimation and style of 

mineralisation observed. MMC notes that Table 14-9 does not show all objects, only the largest, which contain the 

majority of the mineralisation. 




Page 52 

Table 14-9 Jiama Copper-Polymetallic Project - Comparison of Block Estimates and Composites 

Object 

Wireframe Block Model Composites 

Pod Resource Cu Number of Cu 

Volume Volume % Comps % 

1 252,265,768 247,473,047 0.64 5519 0.69 

2 770,068,752 768,600,781 0.23 20250 0.25 

16 1,752,213 1,755,469 0.15 60 0.16 

18 1,881,639 1,877,344 0.14 53 0.14 

68 12,151,925 12,164,844 0.13 365 0.12 

74 10,332,331 9,690,234 0.11 233 0.11 

82 15,221,485 15,113,281 0.05 714 0.05 

Total 1,063,674,113 1,056,675,000 0.32 27,194 0.33 

Visual Inspection of the Blocks 

A visual inspection of the block estimates and the composites was completed to confirm the mathematical correlation and 

ensure that no conditional bias had occurred on a local scale. 

Overall Validation 

The review of the mathematical comparison indicates that a good correlation exists, as shown in Table 14-9. This good 

correlation of the drill holes and interpolated block model was further supported when a visual inspection was completed. 

As a result of the validation completed MMC believes the estimate is representative of the composites, and is indicative of 

the known controls of mineralisation and the underlying data. 




Page 53 

14.10 MINERAL RESOURCE STATEMENT 

MMC has independently estimated the Mineral Resources contained within the Project, based on the data collected by the 

Company as at 28 th April, 2012. The Mineral Resource estimate and underlying data complies the guidelines provided in 

the NI 43-101, Standards of Disclosure for Mineral Projects, dated June 30, 2011. Therefore MMC believes it is suitable 

for public reporting and meets the reporting standards of Chapter 18 of the HKEx listing rules. The Mineral Resources 

were completed by Mr. Jeremy Clark of MMC and are reported at a 0.3% Copper equivalent grade. The results of the 

resource estimate for the Project are tabulated in Table 14-10. 

During the review of the data MMC noted that whilst the mineralisation occurs all within a single mineralised body, Au and 

Ag mineralisation within the orebody had a significantly higher spatial variability than the other elements. As a result MMC 

has classified the Au and Ag resource presented in Table 14-11 separately; this classification takes into account the 

proposed large scale mining techniques where Au and Ag will only be credits to the overall products from the operations. 

MMC has assumed that Au and Ag will not be used as a single cut-off grade for a selected mining block and will be mined 

in conjunction with the other elements. 

The Mineral Resources are summarized in 14-10 and Table 14-11. The Mineral Resources presented in Table 14-11 for 

Au and Ag are inclusive and not in addition to the Mineral Resources in 14-10 and occur within the same mineralised 

body. 

Table 14-10 Jiama Copper-Polymetallic Project - Cu, Mo, Pb and Zn Mineral Resources reported at a 0.3 % Cu 

Equivalent Cut Off Grade as at 28 th April 2012 

Rock 

Type 

Skarn 

Hornfels 

Porphyry 

Total 

Class 

Quantity 

Cu Metal Mo Metal Pb Metal Zn Metal 

Cu % Mo % Pb % Zn % 

Mt 

Kt Kt Kt Kt 

Measure 35.6 0.71 0.048 0.11 0.07 252 17 38 25 

Indicate d 293.2 0.73 0.043 0.07 0.06 2,135 127 201 163 

M+I d 328.8 0.73 0.044 0.07 0.06 2,388 144 239 187 

Inferred 174 0.6 0.045 0.16 0.08 1,036 79 286 146 

Measure 38.4 0.28 0.035 0.04 0.01 107 14 14 5 

Indicate d 626.1 0.31 0.031 0.01 0.01 1,952 196 66 64 

M+I d 664.5 0.31 0.032 0.01 0.01 2,059 210 80 69 

Inferred 219 0.29 0.034 0.03 0.01 633 74 72 32 

Measure 2.1 0.22 0.056 0.01 0.01 5 1 0 0 

Indicate d 57.7 0.33 0.043 0.01 0.01 188 25 4 6 

M+I d 59.8 0.32 0.043 0.01 0.01 193 26 4 6 

Inferred 2.9 0.23 0.099 0.02 0.04 7 3 0 1 

Measure 76 0.48 0.042 0.07 0.04 364 32 52 30 

Indicate d 977.1 0.44 0.036 0.03 0.02 4,275 348 271 232 

M+I d 1,053.1 0.44 0.036 0.03 0.02 4,640 380 323 262 

Inferred 395.9 0.42 0.039 0.09 0.05 1,676 156 359 179 

Table 14-11 Jiama Copper-Polymetallic Project – Au and Ag Mineral Resources reported at a 0.3% Cu Equivalent 

Cut Off Grade (>0.02 Au g/t), as at April 2012. 

Rock Type Class Quantity Au g/t Ag g/t Au Moz Ag Moz 

Skarn Indicated Mtonnes 256.5 0.31 17.01 2.537 140.290 

Inferred 117.0 0.39 16.50 1.472 62.077 

Hornfels Indicated 178.6 0.06 2.52 0.337 14.486 

Inferred 68.9 0.08 5.06 0.186 11.195 

Porphyry Indicated 15.7 0.24 8.22 0.121 4.145 

Inferred 0.4 0.11 10.79 0.001 0.128 

Total Indicated 450.8 0.21 10.97 2.995 158.921 

Inferred 186.2 0.28 12.26 1.659 73.400 




Page 54 

14.11 COPPER EQUIVALENT CALCULATION RESOURCES 

To assist in reporting the Mineral Resources in a transparent manner, MMC has estimated a Cu Equivalent (“CuEq”) value 

for reporting of the block model, based on associated component grades, process recoveries and consensus forecast 

metal pricing (before tax). Cu contributes the most value to the equivalence calculation and was as a result selected to 

report on an equivalent basis. 

The parameters used to estimate the Copper Equivalence for the Mineral Resources are outlined in Table 14-12. 

Table 14-12 Jiama Copper-Polymetallic Project – Copper Equivalence Parameters Mineral Resources 

Process Recoveries 

Copper 86.00% 

Molybdenum 70.00% 

Lead 88.00% 

Zinc 30.00% 

Product Prices 

Copper RMB per tonne 30,372 

Molybdenum RMB per tonne 134,878 

Lead RMB per tonne 10,166 

Zinc RMB per tonne 8,440 

Copper Equivalence Ratio 

Copper 1 

Molybdenum 3.6147 

Zinc 0.3425 

Lead 0.0969 

Note: Product pricing assumptions are based on consensus bank forecasts before tax as at May 2012 and details can be found in Section 

19 of this report. 

14.12 DILUTION AND ORE LOSSES 

The block model is undiluted with no ore loss factors applied; as a result appropriate dilution and ore loss factors must be 

applied for any economic reserve calculation. 




Page 55 

15 MINERAL RESERVE ESTIMATES 

A Mineral Reserve estimate has been independently completed by MMC in accordance with the guidelines provided in the 

NI 43-101, Standards of Disclosure for Mineral Projects, dated June 2011. The National Instrument 43-101 defines 

Mineral Reserves as the economically mineable portion of a Measured and/or Indicated Mineral Resource, taking into 

account any diluting materials and allowances for losses, which may occur when the material is mined. To enable the 

estimation of Mineral Reserves MMC has: 

 

 

 

 

 

Characterised mineralisation at the Project; 

Reviewed the applied mining methods and current life of mine designs using optimisation techniques. These 

were then used as the basis for the Reserve calculation; 

Estimated appropriate rates of mining loss and ore dilutions; 

Verified the cut-off grades as suitable for use in an Mineral Reserve estimate; and 

Completed economic modelling to determine the economic viability of extraction of the Mineral Reserves. 

15.1 MINERAL RESERVE ESTIMATION PARAMETERS 

MMC has determined suitable technical parameters to apply in the Mineral Reserve estimation process following 

discussions with site personnel, review of the draft Chinese Feasibility Study, the proposed life of mine plan, mining 

methods, and processing plant recoveries to the areas of the Project where Measured and Indicated Mineral Resources 

have been estimated. Inferred Resources have not been utilised in the estimate as required by the NI 43-101 standards. 

The following parameters have been used to estimate the Mineral Reserve: 

 

 

 

 

LOM Cut-off grade: 

o 

o 

Open cut: 0.35% Cu-eq 

Underground: varies between 0.5% Cu and 0.6% Cu-eq (refer to Section 16-4-2 for details) 

Mining dilution factor: 

o Open cut: 5% 

o 

Underground: varies between 8.7% and 15.2% depending on mining method (refer to Section 16-4-1 for 

details) 

o Dilutant material for both open cut and underground operations are assumed to have a grade of 0%. 

Mining loss factor: 

o Open cut: 5% 

o 

Underground: varies between 20% and 26% depending on mining method (refer to Section 16-4-1 for 

details) 

Design parameters: 

o 

o 

An average overall pit slope of 43 degrees. Refer to Table 16-7 for detailed pit design parameters used. 

Refer to Section 16.5.2 for the stope parameters and pillar dimensions used for each mining method. 

Processing recoveries as presented in Table 16-8. 

 

Operating and capital expenditure costs as estimated by MMC and other Relevant Experts; 

Forecast metal prices as presented in Section 19. 

15.2 MINERAL RESERVE ESTIMATION PROCEDURE 

Mineral Reserves were estimated using Surpac Mine Planning Software and Datamine. The Mineral Reserve estimation 

applied the mining modifying factors to the 3-D geological model created by MMC for the Mineral Resource estimate (April 

28, 2012). The following steps were completed to accurately estimate Mineral Reserves: 

15.2.1 Open Cut Process 

 

The quantity of open cut economic ore within the Project was determined using GEMCOM Whittle Four-X Pit 

Optimisation software. This package is an industry standard tool for applying mining and processing parameters to 

a geological block model to determine the value of each block and the largest economic (or optimum) pit for a 

commodity price. Relevant operating parameters, as described in Section 16, were applied to the pit optimisation. 




Page 56 

 

 

 

 

 

 

 

 

 

To determine the split between ore and waste a cut-off grade was estimated. The cut-off grade was based on 

analysis of the operating and capital costs, mineral grade, processing recovery, concentrate grade and product 

revenue. 

A detailed pit design was created using Surpac Mine Planning Software from the selected Optimiser shell. 

A mining recovery factor was applied to reflect the undiluted potentially recoverable tonnes; 

A mining dilution factor was then applied. The grade of the applied dilution material was 0% for all metals; 

A mining schedule was generated, which incorporated the estimated life of mine cut-off grade of 0.35% Cu-eq. 

Processing recoveries was applied to the estimated ROM tonnes; 

Product tonnes were estimated and sales prices for the various metals were applied; 

An economic model was generated incorporating operating and capital costs and revenue. MMC reviewed the 

operating and capital cost estimates prior to applying in the economic model. Additional capital costs were 

included in the economic model to allow for sustaining capital over the life of mine for the installed equipment and 

infrastructure. 

Estimated Mineral Reserves were classified as Proven or Probable based on the level of confidence in the 

estimated parameters and Mineral Resource. 

15.2.2 Underground Process 

 

 

 

 

 

 

 

 

 

The quantity of underground economic ore within the deposit was determined using Datamine Mineable Stope 

Optimiser (“MSO”) software. This package is an industry standard tool for applying mining and processing 

parameters to a geological block model to determine the value of each block and economic stopes for a commodity 

price. Relevant operating parameters, as described in Section 16, were applied to the stope optimisation. 

To determine the split between ore and waste a cut-off grade was estimated. The cut-off grade was based on 

analysis of the operating cost, mineral grade, processing recovery, concentrate grade and product revenue. 

A mining recovery factor was applied to reflect the undiluted potentially recoverable tonnes; 

A mining dilution factor was then applied. The grade of the applied dilution material was 0% for all metals; 

A mining schedule was generated, which incorporated the estimated life of mine cut-off grades varying between 

0.5% and 0.6% Cu-eq. 

Processing recoveries were applied to the estimated ROM tonnes; 

Product tonnes were estimated and sales prices for the various metals were applied; 

An economic model was generated incorporating operating and capital costs and revenue. MMC reviewed the 

operating and capital cost estimates prior to applying in the economic model. Additional capital costs were 

included in the economic model to allow for sustaining capital over the life of mine for the installed equipment and 

infrastructure. 

Estimated Mineral Reserves were classified as Probable and or Proven based on the level of confidence in the 

estimated parameters and Mineral Resource. 




Page 57 

15.3 MINERAL RESERVE ESTIMATE 

The Proven and Probable Mineral Reserve estimate for the Project reported at a 0.35% Cu-eq cut-off grade for the Ore 

extracted via open cut methods and 0.5 to 0.65% Cu-eq cut-off grade for the Ore extracted via underground methods has 

been summarised in Table 15-1. Details on the Cu-eq calculations used in the Mineral Reserves are outlined in Section 

15.4 and further details on the mining cut off grades can be found in Section 16.4. The Measured and Indicated 

Mineral Resources reported in Section 14 are inclusive of, and not additional to, the Mineral Resources modified to 

produce the Mineral Reserve estimate reported below. 

Table 15-1 Jiama Copper-Polymetallic Project – Statement of NI 43-101 Mineral Reserve Estimate as at 28 th April 

2012 

Grade 

Metals 

Type Cu Mo Au Ag Pb Zn Cu Mo Au Ag Pb Zn 

Kt % % g/t g/t % % kt kt t t kt kt 

Tongqianshan 

Proved - - - - - - - - - - - - - 

Probable 2,632 0.57 0.014 0.15 8.05 - - 15.0 0.37 0.39 21.2 - - 

Subtotal 2,632 0.57 0.014 0.15 8.05 - - 15.0 0.37 0.39 21.2 - - 

Waste 7,770 - - - - - - - - - - - - 

Strip Ratio* 2.95 - - - - - - - - - - - - 

Niumatang 

Proved - - - - - - - - - - - - - 

Probable 15,328 1.24 0.044 0.57 25.77 - - 189.5 6.74 8.78 394.9 - - 

Subtotal 15,328 1.24 0.044 0.57 25.77 - - 189.5 6.74 8.78 394.9 - - 

Waste 141,919 - - - - - - - - - - - - 

Strip Ratio* 9.26 - - - - - - - - - - - - 

South Pit 

Proved - - - - - - - - - - - - - 

Probable 38,231 0.93 0.021 0.22 20.90 - - 354.0 8.03 8.53 799.0 - - 

Subtotal 38,231 0.93 0.021 0.22 20.90 - - 354.0 8.03 8.53 799.0 - - 

Waste 233,346 - - - - - - - - - - - - 

Strip Ratio* 6.10 - - - - - - - - - - - - 

Jiaoyan 

Proved - - - - - - - - - - - - - 

Probable 146,017 0.42 0.016 0.03 1.11 - - 611.8 23.36 4.53 161.6 - - 

Subtotal 146,017 0.42 0.016 0.03 1.11 - - 611.8 23.36 4.53 161.6 - - 

Waste 224,620 - - - - - - - - - - - - 

Strip Ratio* 1.54 - - - - - - - - - - - - 

Underground (north) 

Proved 16,241 1.14 0.073 0.38 21.69 0.108 0.058 185.6 11.90 6.15 352.3 17.5 9.5 

Probable 113,158 1.10 0.049 0.42 20.61 0.039 0.033 1,241.9 55.30 47.60 2,332.1 44.5 37.0 

Subtotal 129,399 1.10 0.052 0.42 20.74 0.048 0.036 1,427.5 67.20 53.75 2,684.4 62.0 46.5 

Waste n/a - - - - - - - - - - - - 

Strip Ratio* n/a - - - - - - - - - - - - 

Underground (south) 

Proved 8,673 0.63 0.014 0.29 0.38 0.116 10.855 54.8 1.26 2.48 3.3 10.1 941.5 

Probable 23,190 0.67 0.016 0.09 10.82 0.094 0.125 155.1 3.76 2.05 251.0 21.8 28.9 

Subtotal 31,864 0.66 0.016 0.14 7.98 0.100 3.046 209.9 5.02 4.53 254.3 31.9 970.4 

Waste n/a - - - - - - - - - - - - 

Strip Ratio* n/a - - - - - - - - - - - - 

Total Reserves 

Proved 24,914 0.96 0.053 0.35 14.27 0.111 3.817 240.4 13.15 8.63 355.6 27.6 950.9 

Probable 338,556 0.76 0.029 0.21 11.70 0.020 0.019 2,567.3 97.57 71.88 3,959.8 66.4 65.9 

Total 363,470 0.77 0.030 0.22 11.87 0.026 0.280 2,807.7 110.72 80.50 4,315.4 94.0 1,016.9 


* Strip ratio units are waste tonne: ore tonne 

The Mineral Reserve estimate for the open cut pits have been classified as Probable only. This is due to two main 

reasons: 

1. In areas where the Mineral Resource Estimate has been classified as Indicated, the Mineral Reserve Estimate can 

only be classified as Probable due to the confidence of the geological data. 

2. Due to the current level of confidence in some of the modifying factors for the Project, such as the metallurgical 

testing for Jiaoyan Pit and geotechnical studies for South Pit, Jiaoyan Pit and the underground mine, the 

confidence level of the Mineral Reserve classification is limited to Probable. Further optimization studies are 

planned to occur as part of an ongoing project development plan which is likely to lead to a further increase in the 

confidence in above modifying factors, which will potentially result in increases in the classification applied. 




Page 58 

15.4 COPPER EQUIVALENT CALCULATION RESERVES 

To assist in reporting the Mineral Reserves in a transparent manner, MMC has estimated a Cu Equivalent (“CuEq”) value 

for reporting of the Mineral Reserves, based on associated component grades, process recoveries and consensus 

forecast metal pricing (before tax). Cu contributes the most value to the equivalence calculation and was as a result 

selected to report on an equivalent basis. 

The parameters used to estimate the Copper Equivalence for each Project are outlined in Table 15-2. 

Table 15-2 Jiama Copper-Polymetallic Project – Copper Equivalence Parameters Mineral Reserves 

Process Recoveries Skarn Skarn (Cu/Pb/Zn Ore) Hornfels/Porphyry 

Copper 88.00% 88.00% 84.00% 

Molybdenum 70.00% 48.00% 

Gold 45.00% 45.00% 

Silver 65.00% 60.00% 

Lead 75.00% 

Zinc 88.00% 

Product Prices 

Copper USD per lb 2.90 2.90 2.90 

Molybdenum USD per lb 15.50 15.50 

Gold USD per Troy ounce 1,300 1,300 

Silver USD per Troy ounce 20.00 20.00 

Lead USD per tonne 2,150 

Zinc USD per tonne 2,100 

Copper Equivalence Ratio 

Copper 1 1 1 

Molybdenum 2.5540 1.7513 

Gold 0.2478 0.2478 

Silver 0.0051 0.0051 

Zinc 0.2023 

Lead 0.1884 

Note: Product pricing assumptions are based on consensus bank forecasts before tax as at May 2012 and details can be found in Section 

19 of this report. 

15.5 COMMENTS 


The current mining licence does not cover all areas of the proposed open pits and underground operations, as shown in 

Figure 16-4. These areas are however covered by the current exploration licences and under Chinese mining regulation 

there is a well-defined and regulated process by which an exploration licence is converted to a mining licence with the 

Company having commenced this process already. Additionally, it is MMC’s understanding that as the Company has 

funded the bulk of the exploration work, they will receive exclusive rights to convert the exploration licence to a mining 

licence upon completion of the Chinese Feasibility Study. Hence, MMC believes that there is reasonable expectation that 

this conversion will happen in a timely fashion so as not to impact the Company’s plans. 

Although MMC does expect these licences to be granted, MMC notes it is not a legal expert and presents this information 

for reference only. 

Legal Approvals 

The Mineral Reserve estimate is contingent on relevant mining approvals being granted to enable the construction of onsite 

infrastructure, such as the Phase II Processing Plant and the expanded production rate. If the construction of 

infrastructure is not completed as per the schedule, the mining, processing and life of mine schedule will vary. This will 

likely have a negative impact on the NPV of the Project. 

Metal Pricing and Capital Operating Costs 

The Mineral Reserve is sensitive to changes in product price, operating or capital expenditure. See Section 22 for further 

details. 




Page 59 

Geotechnical Studies 

Detailed geotechnical studies for South Pit and Jiaoyan have not been completed. Based on preliminary observations of 

the current open cuts, MMC notes that the pit slopes used in the design are likely to be conservative and that further 

studies may indicate that steeper walls can be achieved to reduce the stripping ratio. Further test work is required to 

confirm this. 

Additionally detailed geotechnical studies for the underground operation are recommended to ensure stability of the mine 

and minimise dilution of the stopes. These may prove that larger stopes can be successfully extracted, thus lowering the 

overall mining operating cost. Moreover, prior to extensive development commitment, a geotechnical expert should be 

consulted to develop a programme of confirmatory and ongoing test-work to be conducted. 

Working Room 

Due to the number of loaders and trucks required to achieve the open cut 6.0 ROM Mtpa mining production rate, detailed 

production schedules are recommended to be completed to ensure sufficient working room is maintained throughout the 

mine life of each open pit. Working room is the area required for all operating equipment to function while maintaining 

forecast production rates. MMC is aware onsite short term planning currently occurs, however due to short timeframe of 

the current production, a detailed review was unable to be undertaken. 

Reserve Classification and Future Exploration and Infill Drilling 

Exploration drilling, which may upgrade the Inferred and Indicated portions present in the South Pit area needs to be 

completed. MMC notes that currently the Inferred resource that overlies the Indicated resources is regarded as waste in 

the Mineral Reserve model. Upon re-classification this Inferred material could be upgraded to Reserve status, thereby 

increasing the mine life and improving the economics of the Project. Specifically, if all inferred material is upgraded to at 

least Indicated status, this could increase the Ore tonnage in South Pit by 34%, from 38 Mt to approximately 51 Mt. 

Additionally, following further drilling to improve the internal mineralisation understanding of the mining areas, particularly 

in relation to Jiaoyan, South Pit and the underground operation, the confidence in the grade distribution could increase. 

This is likely to impact the classification of the Mineral Resource. In particular, as mining is currently underway, the level 

of information and geological understanding of the ore bodies is likely to increase, and this may have a positive impact on 

understanding of the controls of mineralisation. 




Page 60 

16 MINING METHODS 

MMC has completed a review of the Chinese Feasibility Study, including an analysis of the mine design parameters 

utilised. This review determined that the mine design parameters were appropriate and suitable for the Project and as a 

result formed the basis for the mine design and planning which MMC completed, as outlined below. 

The Company plans to operate four open cut mines, namely Tongqianshan, Niumatang, South Pit and Jiaoyan, and one 

underground mine, which is split into a north and south areas. The operation is planned to be developed in two stages: 

 

 

Phase I - This stage commenced in June 2010 with the construction of a 1.8Mtpa ROM ore processing plant and 

the development of the Tongqianshan, Niumatang and South Pit open cuts. In addition to the processing facility 

and open pits, Phase I infrastructure, which has been built, includes site offices, accommodation and site road 

access. 

Phase II – This stage is forecast to commence in 2015 with a ramp up to a maximum processing production 

capacity of 13.8 Mtpa ROM ore by the end of 2016. In addition to the Phase I pits, Jiaoyan will be developed along 

with the underground operation. The open cut operations will account for approximately 7.0 Mtpa of ROM ore 

production, while the underground mine will account for 6.6 Mtpa of ROM ore production averaging to a total of 

13.6 Mtpa ROM Ore production from 2016 to 2039. . 

Table 16-1 summarises the mining methods and status of the five proposed mines within the Project. 

Table 16-1 Jiama Copper-Polymetallic Project – Mining Summary 

Mine Method Status Stage 

Tongqianshan Open cut (truck/shovel) Operating (June 2010) Phase I 

Niumatang Open cut (truck/shovel) Operating (April 2011) Phase I 

South Pit Open cut (truck/shovel) Planned production 2013 Phase II 

Jiaoyan Open cut (truck/shovel) Planned production 2020 Phase II 

Underground (North) 

Sublevel caving 

Sublevel open stoping 

Planned production 2015 Phase II 

Sublevel open stoping 

Underground (South) 

Source: MMC Scheduling Work 

Stope and pillar 

Sublevel caving 

Room and pillar 

Shrinkage 

Planned production 2023 

Phase II 

Although Copper is the primary metal, molybdenum, gold, silver, lead and zinc are also planned to be extracted and form 

part of the saleable concentrate. Based on the Mineral Reserve estimate estimated by MMC, the Project currently has a 

mine life of 31 years with a planned 202.2 Mt of ROM ore being extracted from the open cut operations and 161.3 Mt of 

ROM ore from the underground operation. 




Page 61 

16.1 MINE PLANNING PROCESS 

MMC has used standard industry practices to complete the mine planning for the Project, which are summarised in Table 

16-2. 

Table 16-2 Jiama Copper-Polymetallic Project – Mine Planning Summary 

Step No. Open Cut Underground 

1 Deposit characterisation and consideration of mining method – the geological model created for the 

Mineral Resource estimate (as described in Section 14) was assessed for suitability of various 

mining methods; 

2 Pit limit estimation – Whittle pit optimiser 

software was used to study the value of the 

deposit and to assist determining a theoretical 

pit shell; 

3 Pit limits and mineable quantities – the pit 

optimisation results from Whittle were used to 

select a practical mining pit shell with mineable 

quantities calculated based on this pit shell; 

4 Mine development strategy – various strategies 

for developing the pit shell were examined and 

the preferred strategy chosen; 

Stope size, shape and location estimation – 

Datamine Mineable Stope Optimiser (MSO) was 

used to generate various stopes shapes; 

Stope limit and mineable quantities – the stope 

optimisation results from MSO were used to 

select practical stope shapes with mineable 

quantities calculated; 

Mine development strategy - establishing an 

appropriate development schedule to meet the 

production requirements; 

5 Production scheduling – based on the selected mining strategy, the estimated mineable quantities 

were scheduled with the estimated mineralised grades; 

6 Mine equipment selection – open cut and underground equipment was chosen to match the duty 

required from the production schedule; 

7 Economic modelling - Combining physical pit quantities with cost estimates reviewed from the 

Chinese Feasibility Study and independently reviewed revenue assumptions to determine annual 

economic parameters (costs, margin etc) and project Net Present Value (NPV). 

16.2 MINING METHOD 

A review of the mineralisation within the Project area suggests both open cut and underground mining methods are 

applicable. Only open cut methods will be employed in Phase I, however upon commencement of Phase II in 2015, both 

open cut and underground methods are planned to be employed. 

Figure 16-1 presents the site plan, which highlights the locations of all open cut pits, underground shaft and decline 

openings, waste dumps, processing plants and other significant infrastructure. 

16.2.1 Open Cut 

Mining 

Conventional selective mining methods are planned to be employed to extract the mineralised material for all four 

proposed open pits. Mining is planned to occur on shallow benches, typically 4 to 5 m high, which will enable grade 

control of the mineralised zones to be completed. A typical mining cycle would involve: 

 

 

 

 

 

Drilling of a blast pattern; 

Sampling of drill hole cuttings for grade control; 

Blasting to fragment rock; 

Marking out mineralised zones based on grade control results; and 

Digging, loading and hauling mineralised material and waste rock to the surface. 

Four open pits are planned to be developed over the life of the mine, namely the Tongqianshan Pit, the Niumatang Pit, the 

South Pit and the Jiaoyan Pit. These pits have a variety of sizes, strip ratios and types of mineralisation as shown in 

Table 16-3. 




Page 62 

Table 16-3 Jiama Copper-Polymetallic Project – Open Cut Pit Summary 

Unit Tongqianshan Niumatang South Pit Jiaoyan Total 

Skarn kt 2,472 14,334 31,629 0 48,435 

Hornfels kt 160 994 6,602 133,204 140,960 

Porphyry kt 0 0 0 12,812 12,812 

Waste kt 7,770 141,919 233,346 224,620 607,655 

Strip Ratio waste t: ore t 2.95 9.26 6.10 1.54 3.01 

Copper % 0.57 1.24 0.93 0.42 0.58 

Molybdenum % 0.014 0.044 0.021 0.016 0.019 

Gold g/t 0.15 0.57 0.22 0 0.31 

Silver g/t 8.05 25.77 20.90 0 21.62 

Cut-off Grade % Cu 0.3 0.3 0.3 0.3 0.3 

Source: MMC Derived. NMT, TSQ and JY are based on FS Pit Designs. MMC independently designed SP. 

Note: Mineralised Quantities and grades are Measured and Indicated Mineral Resources within the pit designs reported at a cut-off grade 

of 0.35% Cu-eq. 

Ore Haulage, Crushing, Stockpiling 

All ore haulage from the pits is planned to be completed by contractors. As a result of the site topography and to minimise 

haulage costs, ore is planned to be hauled from the pits to crushing facilities located close to the proposed pit locations. 

After crushing to 300 mm the ore will go either directly into vertical ore passes or conveyed to passes using belts. The ore 

passes will feed a conveyor system that will transport ore to stockpiles located adjacent to the processing plants. Table 

16-4 describes the ore haulage, crushing and stockpiling plans for the proposed pits. 

MMC notes that, until the Phase II Processing Plant has been constructed, the crushed ore of Tongqianshan and 

Niumatang from ore pass #2 will be transferred to ore pass #1 via tramcar (ore dropped from 4,261 mRL to 4,087 mRL). 

Following, tramcars in the adit will be used to transport the ore from ore pass #1 2.7 km to the ROM stockpile at Phase I 

Processing Plant (4,000 mRL). 




4 80 

4805 

5030 

4760 

4790 

4820 

4850 

4 80 

4910 

4940 

4865 

5 0 

4970 

4940 

4790 

5045 

4 80 

4850 

4820 

4730 

4790 

4820 

4760 

4790 

4850 

4850 

4760 

4 80 

4 75 

4910 

4940 

4970 

4820 

4745 

4760 

4790 

4820 

4850 

4910 

4940 

4970 

5 0 

5 0 

5030 

4850 

5060 

5060 

5090 

5120 

5120 

5150 

5150 

5180 

X3291000 

To Phase I Processing Plant 7Km Away 

N 

Phase II Processing Plant 

JY & SP Ore Pass 

X3290000 

Power Station 

Phase I 

Dump 

X3289000 

Explosive Magazine 

Administration Building 

North Haulage Shaft 

X3288000 

LEGEND 

Ore Tansport Road 

NMT & TQS Crushing Station 

UG Dump B2 

Niumatang Pit 

Jiaoyan Pit 

Jiaoyan Dump 

Road 

UG Dump 1 

Dump 

X3287000 

Pit 

Open cut Conveyor Belt 

JY & SP Crushing Station 

Tongqianshan Pit 

South Dump 

South Pit 

Underground Conveyor Belt 

South Haulage Shaft 

0 

500 1000 

X3286000 

metres 

Y16375000 

Y16376000 

Y16377000 

Y16378000 

Y16379000 

Y16380000 


FIGURE 16-1 



Site Plan

Page 64 

Table 16-4 Jiama Copper-Polymetallic Project – Ore Haulage, Crushing, Stockpiling Summary for the Open Pit 

Mines 

Pit to 

Crusher Ore 

Haulage 

Crushing 

Crusher to 

ROM 

Stockpile 

Ore Haulage 

Ore 

Stockpile 

Tongqianshan & Niumatang 

Truck haulage transport ore from the pit to crushing 

system (4,484 mRL). 

Distance from pit to crushing station: 

Tongqianshan = 4km, Niumatang = 1km 

Crusher is located next to Ore pass # 2, (ore 

dropped from 4,496 mRL to 4,261 mRL). 

Tramcars transport the Ore to TNNU ore pass (ore 

dropped from 4,261 mRL to 4,215 mRL) 

Ore from TNNU ore pass is transported 2.2 km 

using a conveyor system to the ROM stockpile on 

surface of Phase 2 Processing Plant (4,500 mRL). 

Ore crushed to less than 300 mm 

South Pit & Jiaoyan 

Truck haulage transport ore from the pit to the 

crushing system at the edge of Jiaoyan pit (4,880 

mRL). 

Distance from pit to crushing station: 

South Pit = 1.1 km, Jiaoyan = 0 km 

Crushed Ore is transported via conveyor system to 

ore pass located north-east of Phase 1 Dump (ore 

dropped from 4,880 mRL to 4,780 mRL) 

Ore transported 1.8 km using conveyor haulage 

system in decline to ROM stockpile at Phase 2 

Processing Plant (4,500 mRL) 

Figure 16-2 shows in cross-section view Tongqianshan, Niumatang and the underground workings, which illustrates the 

ore passes used for Tongqianshan, Niumatang during Phase I and when Phase II is constructed. 

Waste Dumps 

Truck haulage will be used to transport waste material to surface dumps. Five dumps are planned to be utilised for the 

Project. Waste from Tongqianshan and Niumatang is currently dumped to the north of the Project area, while the waste 

from South Pit and Jiaoyan is planned to be dumped in an area 0.2 km to the east of Jiaoyan. Once this eastern dump 

area has been exhausted, the remaining waste from Jiaoyan will be dumped into the South Pit void. Two other dumps will 

be established where the current Tongqianshan and Niumatang pits are located once mining has ceased in these areas – 

these dumps will service the underground operations. Dumping in previously mined out areas will minimise surface 

disturbance and reduce rehabilitation requirements. Figure 16-1 shows the location of the five dumps. The waste 

haulage distance from each pit to their respective dumps is provided below: 

 

 

 

 

Tonqianshan = 2 km 

Niumatang = 4 km 

South Pit = 3.3km 

Jiaoyan = 1.1 km 

Table 16-5 shows the capacity of the individual waste dumps. MMC notes that currently these proposed dumps do not 

have enough capacity to accommodate the planned waste volumes; however MMC is aware that there is sufficient land 

within the Project area that the Company could utilise. For these areas to be used the Company will be required to obtain 

land usage permits in addition to the current exploration licence covering these areas. 

Table 16-5 Jiama Copper-Polymetallic Project – Dump Capacities 

Dump Name Unit Capacity 

Tongqianshan and Niumatang Dump M cu.m 29.4 

Jiaoyan Dump M cu.m 108.0 

South Pit Dump M cu.m 94 

UG Dump A (Tongqianshan area) M cu.m 8.5 

UG Dump B (Niumatang area) M cu.m 9.0 

Source: Chinese Feasibility Study, Client Supplied Documents & verified by MMC 

16.2.2 Underground 

In the underground north section, there is one vertical haulage shaft, one air-intake shaft, two air-return shafts, one 

conveyor belt drift with a length of 2 km and an incline of approximately 8 degrees, and one air intake ramp with the exit at 

4,562 mRL. In the underground south section, there is one vertical haulage shaft, one air-return shaft and one assist ramp 

with the exit at 4,562 mRL. These are shown in Figure 16-3. Due to the variability of the orebody and location of 

Niumatang open pit, variations of open stoping and sublevel caving mining methods will be used. Underground mining 

methods for northern and southern areas are outlined below: 




Page 65 

 

 

 

In the northern areas of the underground mine, where the orebody varies from horizontal to slightly inclined with 

varying ore thickness and is of medium to high strength, the sublevel caving (“SLC”) method will be employed. In 

other areas, variations of sub level open stoping will be used to extract the ore. 

In the underground areas immediately adjacent to the Niumatang open pit a suitable method with backfill will be 

employed to maintain the stability of the open pit walls. 

In the southern areas of the mine, where the orebodies are at variable inclination and thickness, open stoping has 

been selected. Due to the variability of the orebody a number of different open stoping methods will be employed, 

these include: 

o Two types of sub-level open stoping when the slope is greater than 30°; 

o 

o 

Stope and pillar with fill and SLC will be used when the ore is shallow dipping (

South Air-return Drift 

4900m 

South Ore and Waste Rock Pass 

4700m 

4711m 

4630m 

4536m 

4500m Level 

North Haulage Shaft 

Air-intake Shaft 

South Ramp 

South Air-return Shaft 

North Air-return Shaft 

Measure Air-intake Shaft 

#2 Ore Pass 

4450m Level 


4534m 

4400m Level 

4300m Level 

Pass and Crush 

System Air-return Shaft 

#3 Ore Pass 

#4 Ore Pass 

#5 Ore Pass 

Air-intake Ramp 

Waste Rock Pass 

Cage Shaft 

Waste Rock Skip Shaft 

North Southern 

Air-return Shaft 

4261m 

Main Transportation 

Roadway 

Conveyor Belt Drift 

To Processing Plant 

TNNU Ore Pass 

0 

100 200 

metres 

FIGURE 16-2 


120ûE 



Underground Mine Plan Layout

North 

South 

5100 

5050 

5000 

4950 

4900 


4900m 

5000mRL 

Ore Pass 


4900mRL 

South Air Return Shaft 

4850 

4800 

North North Haulage Haulage Shaft Shaft 

4800mRL 

4800mRL 

4750 

4700 

4650 

4600 

4550 

4500 

4450 

4400 

4350 

4300 

4270 

4087 

4534m 

Belt Conveyor Drift 

2# Ore Pass 

#2 Ore Pass 

4261m Main 

Transportation Adit 

1# #1 Transfer Ore Pass Pass 

4087m Main 

Transportation Roadway 

4530m 

4500m 

4450m 

Measure Air-intake Shaft 

Open Transfer Cut Transfer Belt Belt Conveyor ConveyorNiumatang Open Cut 

North Air Return Shaft 

4400mRL 

Backfill Drill Hole 

4517m 

4600m 

4562m 

4400m 

Drift 

#3 Ore Pass 

#4 Ore Pass 

#5 Ore Pass 

TNNU Ore Pass 

4660m 

Air-intake Shaft 

Existing Skip Drift 

Hoister Chamber Head Sheave Chamber 

4250m 

4215m 

4700m 

4711m 

Air Return Shaft 

North Cage Shaft 


4250m Loading Level 

Tongqianshan Open Cut 

4200m Fine Ore Recoverg Level 

4150m Loading Level 

4100m Fine Ore Recoverg Level 

Ore Pass 

4750mRL 

4650mRL 

4550mRL 


4450mRL 

North Air Return Shaft 



0 

200 400 

metres 

LEGEND 

Note: the azimuth angle is 120 degree. 

e 

Topographic Line 

Final Open Cut Boundary Line 

Designed Roadway 

Pre-designed Roadway 

Ore Haulage Transport Path before commencement of Phase 2 Processing Plant 

Ore Haulage Transport Path after commencement of Phase 2 Processing Plant 

FIGURE 16-3 


120ûE 



Section View of Tongqianshan & Niumatang 

Open Cut Operations and Underground Operations

Page 68 

16.3 OPTIMISATION – OPEN CUT 

Pit limit optimisation was conducted to define the economic pit limits for the deposit. The geology model created for the 

Mineral Resource estimates was the basis for pit limit optimisation using the Whittle 4X Optimiser. The optimisation 

process involved the following steps: 

 

 

 

 

 

 

 

Define physical constraints; 

Define elements to be optimised; 

Define quality/recovery inputs; 

Define mine operating cost rates; 

Define non-mine operating cost rates; 

Define product prices; and 

Run Optimiser(s) and report results. 

Note that the terminology “pit limit optimisation” refers to a process which generates the best value mining pit shape. It 

presents theoretical three dimensional boundary between ore and waste that can be mined economically and material 

that is not economic to mine. It does not imply that mining has been “optimised” in other ways; such as a practical design 

including access ramps and safety berms, equipment optimisation, labour optimisation, schedule optimisation or cut-off 

grade optimisation. 

16.3.1 Physical Constraints 

MMC is not aware of any surface physical constraints to mining, such as roads, rivers or environmental issues that would 

affect the pit limits in the immediate area of the mineralisation. However MMC is aware the mining licences are restricted 

in their limit. Please refer to Section 15 for further details. 

The mining constraints used for the Project optimisation are provided in Table 16-7. 

Table 16-7 Jiama Copper-Polymetallic Project – Open Cut Optimiser Physical Constraints 

Item Units Value 

Max Slope Angle 

Mineralised Material Loss 

Mineralised Material Dilution 

Dilutant Grade 

Material Used 

Degrees 

% weight 

% weight 

% 

Category 

43 (overall) 

5 

5 

0 

Measured & Indicated 

Source: MMC Derived 

The waste rock density used was 2.6 t/cu.m. 

16.3.2 Metals and Cut-Off Grades 

No cut-off grades were applied for the pit optimisation as Whittle 4X Optimiser estimates the appropriate cut-off grade 

based on the metallurgical and economic constraints. 

16.3.3 Processing Factors 

Based on the review of the current processing test work, as described in Section 13, the processing recoveries estimated 

for the different rock types are shown in Table 16-8 below. 




Page 69 

Table 16-8 Jiama Copper-Polymetallic Project – Recovery Factors 

Ore (Rock) Type Product Element Recovery (%) 

Cu 88 

Cu-Mo Ore (Skarn) 

Cu Concentrate 

Au 45 

Ag 65 

Mo Concentrate Mo 70 

Cu-Mo Ore (Hornfels & Cu Concentrate Cu 84 

Porphyry) 

Mo Concentrate Mo 48 

Cu 88 


Au 45 

Cu-Pb-Zn Ore (Skarn) 

Ag 60 

Pb Concentrate Pb 88 

Zn Concentrate Zn 75 


16.3.4 Cost Rates 

Operating cost rates were based on those provided in the draft Chinese Feasibility Study and reviewed by MMC. These 

costs are considered suitable after review by MMC. MMC did, however, add a depth cost to account for the increased 

haulage with depth of material below the average surface level. The operating costs used for the optimisation process are 

provided in Table 16-9. 

Table 16-9 Jiama Copper-Polymetallic Project – Open Cut Cost Rates used for Optimisation 

Parameter Unit Cost 

Waste Cost RMB/ROM t 13.82 

Ore Cost RMB/ROM t 14.55 

Mining Depth Cost RMB/m 0.05 

Overheads RMB/ROM t 27.52 

Processing Costs RMB/ROM t 72.00 

Transport RMB/ROM t 5.00 

Marketing RMB/ROM t 9.00 

Royalties (Au, Ag) % 2.8 

Royalties (Cu, Mo, Pb, Zn) % 2 

Resource Tax RMB/ROM t 5 

Value Added Tax (“VAT”) % 17 

Source: Chinese Feasibility Study 

16.3.5 Metal Prices 

For pit optimisation purposes, the prices presented in Table 16-10 were used. The final pit designs were based on the 

Whittle optimiser pit shell at a revenue factor of 100%, which equates to those prices shown below. The Ore mined by 

open cut mining methods has very low lead and zinc grades, which meant lead and zinc were not recoverable and thus 

not included in the economic analysis. 

Table 16-10 Jiama Copper-Polymetallic Project – Metal Price Assumptions 

Metal Unit Price 

Cu USD/lb 2.90 

Mo USD/lb 15.50 

Au USD/oz (troy) 1,300 

Ag USD/oz (troy) 20.00 


16.3.6 Results 

The Whittle optimiser was run a number of times to assess the change in potential in-pit resources based on Mineral 

Resource classification, metals and prices. The scenario selected for further analysis and mine planning for the Mineral 

Reserve estimates was based on the metal prices shown in Table 16-10 for the Measured and Indicated Resource 

categories. This scenario was deemed the most appropriate as only Measured and Indicated resources can be classed 

as reserves in a Mineral Reserve estimate and prices must be reasonable. The Whittle results validated the 

Tongqianshan and Niumatang pit designs as presented in the Chinese Feasibility Study and also identified the potential 

economic value of mining the South Pit, which was not presented in the Chinese Feasibility Study. 




Page 70 

16.4 OPTIMISATION – UNDERGROUND 

16.4.1 Physical Constraints 

The mining constraints used for the underground optimisation are provided in Table 16-11. 

Table 16-11 Jiama Copper-Polymetallic Project – Underground Optimiser Physical Constraints 

Method Thickness Dilution Loss Prod Rate Dip Level Interval 

(m) (%) (%) (t/pd) (°) (m) 

min max min max 

shallow 

Stope & pillar with Fill variable 13.6 20 1,200 angle 50 

Open Stoping with Fill 15 30 13.6 20 1000 11 ore width 

Sub Level Open Stoping 1 5 20 13.6 20 500 50 50 

Sub Level Open Stoping 2 5 30 13.6 20 500 30 50 50 

Room & Pillar 5 15 8.7 26 400 30 ore width 

shallow 

angle 

Sub Level Caving* > 30 15.2 25 1500 

Source: MMC 

*Sub level caving has 20 m sublevel intervals *15m crosscuts 

Ore density = 3.11 t/cu.m 

16.4.2 Metals and Cut-Off Grades 

100m*60m blocks 

Cut off grades for each ore type were estimated using prices, recoveries, and costs extracted from the Chinese Feasibility 

study and revised by MMC. Three methods of cut-off grade estimation were used as outlined below. 

Break-Even Cut-Off Grade (“BECOG”) 

The BECOG is the fully-costed cut-off used to evaluate the economic viability of a discreet region of the mine. . It 

includes the underground capital costs. As well as determining whether mining the north and south zones was viable, this 

cut-off grade was used to determine if outlying stopes were able to be included into either the north or south zone. The 

cut-off grades vary depending on distance from the nearest stopes that would be developed. 

Stope Evaluation Cut-Off Grade (“SECOG”) 

The SECOG is used as the basis for selecting economic stoping areas. The SECOG includes: 

 

 

 

 

mining costs for ore development and operating waste development; 

direct stoping costs; 

mining overheads (mining contractor and owner fixed mining costs); and 

processing and all non-mining overheads. 

The SOCOG determined are as follows: 

 

 

Skarn: 0.6% Cu-eq 

Hornfels and Porphyry: 0.55% Cu-eq 

Stope Only Cut-Off Grade (“SOCOG”) 

SOCOG is the SECOG less ore development costs and is used to select incremental stoping areas, where development 

already exists, but cannot justify development in their own right. 

The SECOG determined are as follows: 

 

All ore types: 0.5% Cu 

Notes: 

 

The SECOG cut-off grade described above was used to initially identify economic stoping limits. 




Page 71 

 

Incremental (SOCOG) stopes were then added manually in Datamine. 

16.4.3 Processing Factors 

Similar mineralisation is found within the underground, as for the pits, as a result the same processing recoveries were 

utilized (Table 16-8). 

16.4.4 Cost Rates 

The underground optimisation was completed using the cut-off grades detailed in Section 16.5.4, which were calculated 

from the costs provided in Table 16-12. These costs were reviewed and verified by MMC. 

Table 16-12 Jiama Copper-Polymetallic Project – Underground Cost Rates used for Optimisation 

Parameters Unit Cost 

Stoping RMB/ROM t 58.18 

Development RMB/ROM t 19.93 

Transport RMB/ROM t 10.71 

Hoisting/Power RMB/ROM t 2.48 

Ancillary RMB/ROM t 8.64 


16.4.5 Metal Prices 

The underground optimisation was completed using the cut-off grades calculated from the metal prices provided in Table 

16-13. These costs were reviewed and verified by MMC. 

Table 16-13 Jiama Copper-Polymetallic Project – Underground Cost Rates used for Optimisation 

Metal Unit Price 

Cu USD/lb 2.90 

Mo USD/lb 15.50 

Au USD/oz 1,300 

Ag USD/oz 20.00 

Pb USD/t 2,150 

Zn USD/t 2,100 

Source: MMC Derived based consensus long term bank forecasts, see Section 19. 

16.4.6 Results 

Datamine’s MSO Stope Optimiser was run to determine the stope shapes for each mining method. The parameters and 

cut-off grades described above were input into the MSO stope optimisation software and results were then tabulated and 

combined. The MSO results validated the underground mine as presented in the Chinese Feasibility Study, excluding the 

areas where Inferred Resources and South Pit are located. 

MMC notes: 

 

 

Any overlapping stopes between mining methods were removed manually in Datamine prior to reporting tonnages. 

As the MSO software does not make allowance for pillars along strike, an adjustment was made to the results to 

allow for these pillars. 




Page 72 

16.5 MINE DESIGN 


MMC utilised Whittle to validate the pit designs for Tongqianshan, Niumatang and Jiaoyan, as well as identifying South Pit. 

The designs formed the basis for the mine planning analysis, which included scheduling and economic modelling. 

The open cut mine parameters for each mine are summarised in Table 16-14. MMC considers these parameters to be 

reasonable, however, further geotechnical work is recommended to support the overall slope angles for the South Pit and 

Jiaoyan pit design, particularly due to their planned depths (shown in Figure 16-4). MMC notes that significant mining has 

successfully taken place in the Tongqianshan and Niumatang pits over the past few years with no geotechnical issues. 

Table 16-14 Jiama Copper-Polymetallic Project – Open Cut Mine Design Parameters 

Item Unit Tongqianshan Niumatang South Pit Jiaoyan 

Overall Slope Angles Degrees 45 45 43 43 

Bench Height Metres 10 15 15 15 

Bench Slope Degrees 70 70 65 55-65 

Cleaning Berm Width Metres 10 15 12-16 12-16 

Safety Berm Width Metres 3 4 12-16 11.5-16.5 

Road Width Metres 12 12 11.5-16.5 11.5 

Road Slope % 8 8 5 5 

Ore Loss % weight 5 3 5 2 

Ore Dilution % weight 5 8 5 2 

Dilutant Grade % 0 0 0 0 


A cut-off grade of 0.35% copper-equivalence was used when reporting ore tonnages within each of these pits. It was 

calculated using the mineral grade, processing recovery, concentrate grade, product revenue and operating costs and 

represents the minimum grade for each mining block that can be economically extracted taking into account these factors. 

Table 16-15 shows a breakdown between Measured and Indicated material reported at a cut-off grade of 0.35% Cu-eq 

when only open cut mining methods are used, in addition to the waste material within the final pit designs. 

Table 16-15 Jiama Copper-Polymetallic Project – Breakdown of Measured and Indicated Material within Final 

Open Pit Designs 

Unit Tongqianshan Niumatang South Pit Jiaoyan Total 

Measured Kt 0 0 2,014 4,610 6,624 

Indicated Kt 2,632 15,328 36,217 141,407 195,583 

Waste Kt 7,770 141,919 233,346 224,620 607,655 

Source: MMC 

Note: Mineralised Quantities are based on Measured and Indicated Mineral Resources only using a cut-off grade of 0.35% Cu-eq. 

MMC notes that all inferred material has been treated as waste and the inclusion of inferred material would result in an 

increase of approximately 7% of mineralized material (and therefore a corresponding decrease in waste). 

MMC notes in particular that if the infill drilling presently being undertaken in the South Pit area results in an upgrade of 

the inferred material inside South Pit to at least Indicated status, then this could increase the ore tonnage from 38 Mt to 

approximately 51 Mt, an increase of 34%, which would add approximately two years to the Project’s mine life. It is 

expected that the grades would remain reasonably consistent with those reported within the Proven and Probable 

categories, and thus improving the Project’s economics. 




X3289000 

N 

Niumatang Pit 

Depth:610m 

X3288500 

Jiaoyan Pit 

Depth:495m 

X3288000 

X3287500 

South Pit 

Depth:539m 

X3287000 

X3286500 

Tongqianshan Pit 

Depth:290m 

0 

500 1000 

LEGEND 

X3286000 

metres 

Mining Lease Boundary 

Y378000 

Y378500 

Y379000 

Y379500 

Y380000 

Y380500 

FIGURE 16-4 


120ûE 



Open Cut Pit Designs and Location of Mining Lease

Page 74 


The Chinese Feasibility Study underground designs were used as the basis for the designs completed by MMC. The 

design parameters vary with the selected underground mining methods. These parameters are summarized in Table 16- 

16 and are further discussed below with comment on each method. 

Table 16-16 Jiama Copper-Polymetallic Project – Underground Mine Design Parameters 

Description 

Unit 

Sublevel Open 

Stoping 

Open Stoping 

with filling 

Sublevel 

Caving 

Room & Pillar 

Stope & Pillar 

Width m 5 - 30 15 - 30 >30 5 - 15 

15 (Stope) 

18 (Pillar) 

Dip ° >30

Page 75 

 

Production using this method is scheduled at 1,000 tpd per stope. 

Room & Pillar 

This method will be used to extract shallow dipping orebodies (

Page 76 

stages of the mine life. Niumatang, Tongqianshan and South Pit are predominately comprised of skarn material as 

presented in Table 16-3. 

There is a two year gap between when South Pit finishes mining and underground mining begins in the southern orebody. 

This two year period allows for the construction and stabilisation of the South Haulage Shaft, located on the rim of South 

Pit (see Figure 16-1), which is required to access the southern orebody. If the production in South Pit is delayed, this 

could delay forecast underground operations. 

In regards to underground mining, with the orebody in the northern area of the underground mine being more regular in 

shape and having suitable grades and quantities, it is planned that ore extraction from this area will meet the initial 

production requirements from the underground operations. In addition, it is envisaged that the processing of the northern 

area ore will be easier, which is likely to reduce costs, due to the copper-molybdenum ore having lower copper and lead 

content. The northern area ore will therefore be developed first, with the southern areas of the underground mine only 

being developed as the production from the open pit reduces – with the development scheduled so as to ensure that the 

production capability of the southern area being able to meet the requirement. With the southern portion of the coppermolybdenum 

and copper-lead ores being of relatively low tonnage per vertical metre the annual progression to depth is 

significantly greater in the southern areas. 

16.7 PRODUCTION SCHEDULE 

Table 16-19 presents the historical production figures for Tongqianshan and Niumatang. Based on forecast production 

figures up to and including 2014, copper and gold grades are expected to be higher than those reported historically, while 

the silver grade is expected to be lower. 

Table 16-19 Jiama Copper-Polymetallic Project – Historical Production 

Unit 2010 2011 2012* 

Ore ROM kt 39.78 1,768.89 512.97 

Waste Kt 144.00 3,267.95 584.05 

Strip Ratio waste t: ore t 3.62 1.85 1.14 

Cu ROM Grade % 0.62 0.66 0.56 

Mo ROM Grade % Data not available - - 

Au ROM Grade g/t Data not available 0.32 0.28 

Ag ROM Grade g/t Data not available 33.24 23.91 

Pb ROM Grade % Data not available 1.58 0.64 

Zn ROM Grade % Data not available 0.44 0.22 

Source: Client Supplied 

Note: Production for 2012 is up to mid-April 2012 


The scheduling process for the open cut mines involved the following steps: 

 

 

 

 

 

 

Dividing the final pit shell into “reserves” blocks; 

Estimating mineralised material quantities and grades for each block using Surpac software; 

Importing the resulting data into MMC’s proprietary MiMaSo scheduling software; 

Sequencing blocks, that is ordering blocks to give a logical sequence which develops the mine according to the 

adopted mining strategy; 

Smoothing waste quantities required to uncover necessary mineralised material to provide a more reasonable 

mining schedule. This required excavating some waste earlier as “pre-strip”; and 

Checking the results and then exporting the schedule for importing into other MiMaSo software, such as mining 

fleet estimation and economic modelling software. 

The key outcomes of the open cut production schedules include: 

 

29 year mine life; 




Page 77 

 

 

 

 

 

The open pit production rate is approximately 7 Mtpa ROM ore over the life of mine. 

From 2015 to 2022 the open pit production rate varies between 7 Mtpa and 9.9 Mtpa to ensure that the processing 

plants are appropriately utilised while the underground operation production is ramped up; 

The average strip ratio for all four open cut mines over the 29 year mine life is 3.0:1 (waste t: mineralised material 

t), however it ranges from 0.4:1 to 23.9:1 (waste t: mineralised material t). From 2022, the strip ratio remains below 

2.9:1 (waste t: mineralised material t); 

Average Cu, Mo, Au and Ag grades decrease notably in 2019, and then remain relatively constant thereafter; and 

Further detailed optimising of the schedule will be required for South Pit and Jiaoyan to ensure ROM ore mined 

and strip ratios are kept relatively consistent. Additionally, from 2013 to 2021, additional contractors may be 

required to handle the forecasted large waste movement, and possibly provide extra equipment. MMC notes, 

however, that if the infill drilling currently being undertaken by the Company upgrades the Inferred Mineral 

Resources to at least Indicated status, then this would reduce the amount of waste forecast during these years, 

which could change the mine plan and have a positive impact on Project economics. 


The scheduling process for the underground operation involved the following steps: 

 

 

 

 

 

 

Estimating mineralised material quantities and grades of each element for each mining method, ore type, level, and 

stope and using Surpac software; 

Reviewing development requirements and removing isolated stopes that do not meet cut-off grade requirements for 

mining; 

Importing the model reports into Excel; 

Defining the scheduling scenario by specifying mining method, location, direction, proposed equipment, production 

rates, and working calendar assumptions; 

Sequencing the stopes to give a logical sequence which develops the mine according to the adopted mining 

strategy (the mining sequences used for each mining method were as proposed in the Chinese Feasibility Study, 

that is mining from the top down in each mining zone and completing each level before continuing down to the 

next); 

Checking the results and then exporting the schedule for importing into MMC economic modeling software. 

The key outcomes of the underground production schedules include: 

 

 

 

29 year mine life (including 29 years mining north zones and 21 years mining the south zones); 

Total maximum underground material movement of 5.4 Mtpa ROM ore, which is achieved in Year 12; and 

Average Cu, Mo, Au, and Ag grades increase initially and then decrease as mining extends to depth. 

16.7.3 Combined 

The Project has a planned average mining production rate of 13.6 Mtpa ROM ore from 2016 to 2039 with production 

ramped down during the remaining years of the mine life. Table 16-20 shows the planned production rates yearly for the 

next six year, and then summaries the remaining years. 

Figure 16-5 shows the yearly production of each mine for the 31 year mine life. MMC notes that mine planning has been 

completed to 2042, even though it is estimated that the mine could be extended by at least 15 years. At this stage a mine 

plan with a shorter mine life has been selected as this improves the economics for the Project. A detailed Schedule is also 

included in Annexure C, Table 30-3. 

MMC notes that in 2016 and 2020 when approximately 14.7 Mt and 14.3 Mt of ROM ore is mined respectively, which 

means the processing plant capacity of 13.8 Mtpa is exceeded, this ore can be stockpiled for processing in the following 

year. 




Page 78 

Table 16-20 Jiama Copper-Polymetallic Project – Production Schedule 

Units 2012 2013 2014 2015 2016 2017 2018-19 2020-24 2025-44 Total 

Tongqianshan Mt 0.9 1.4 0.3 0.0 0.0 0.0 0.0 0.0 0.0 2.6 

Niumatang Mt 0.9 0.0 1.9 0.0 0.2 4.3 8.1 0.0 0.0 15.3 

South Pit Mt 0.0 0.4 3.2 9.7 9.7 4.3 9.4 1.5 0.0 38.2 

Jiaoyan Mt 0.0 0.0 0.0 0.0 0.0 0.0 0.0 36.5 109.5 146.0 

UG North Mt 0.0 0.0 0.6 2.3 4.8 4.8 9.6 26.7 80.6 129.4 

UG South Mt 0.0 0.0 0.0 0.0 0.0 0.0 0.0 2.2 30.8 33.0 

Total Mt 1.8 1.8 6.0 12.0 14.7 13.4 27.1 66.9 220.9 364.6 

Waste Mt 15.3 43.0 56.2 50.0 47.6 55.8 114.3 135.2 91.3 608.8 

Strip Ratio waste t: ore t 8.5 23.9 10.4 5.2 4.8 6.5 6.5 3.6 0.8 3.0 

Cu % 0.73 0.53 1.03 0.83 1.36 0.98 1.15 0.73 0.68 0.77* 

Mo % 0.029 0.018 0.013 0.025 0.025 0.050 0.040 0.025 0.031 0.030* 

Au g/t 0.21 0.17 0.39 0.23 0.42 0.37 0.40 0.21 0.17 0.22* 

Ag g/t 13.82 9.63 19.26 19.75 28.81 19.03 23.06 10.03 9.17 12.06* 

Pb % 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.015 0.043 0.029* 

Zn % 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.012 0.032 0.021* 


*average values over the life of mine 




ROM Ore (Mt) 

Page 79 

Figure 16-5 Jiama Copper-Polymetallic Project – Production Schedule Per Mining Area 

16.0 

Mining Schedule Per Mining Area 

14.0 

12.0 

10.0 

8.0 

6.0 

4.0 

2.0 

0.0 

Tongqianshan Niumatang South Pit Jiaoyan UG North UG South 




Page 80 

The Chinese Feasibility Study assumes a 300 day operating calendar (3 shifts per day x 8 hours per shift) for the open cut 

operations and 330 day operating calendar (3 shifts per day x 8 hours per shift) for the underground operations. MMC 

notes that there may be a risk that the actual days of operation, particularly in relation to the open cuts, may be less than 

forecast due to the snowy conditions generally characteristic for the Project area from October through to March. MMC, 

however, considers this risk to be minimal. As such, the annual production rate achieved will be dependent on weather 

conditions. 

MMC considers the annual production quantities and grades shown in Table 16-20 to be reasonable. However, MMC 

envisages minor variations in annual tonnages and expects grade fluctuations over the life of mine. These differences 

would be the result of natural variations in bulk density and grade distribution throughout the resources. MMC considers 

the ramp up of ore production to 6.7 Mtpa in 2015 to be achievable, however this is dependent on appropriate mining 

licences being granted and the construction and commissioning of Phase II infrastructure projects, such as the Phase II 

processing plant and various roads. 

16.8 MINE LIFE 

Based on the Mineral Reserve estimate provided in Table 16-21 and the project production capacity, the current mine life 

for the Project is estimated to be 31 years. MMC, however, believes there is potential to define additional resources, 

which could form part of a Mineral Reserve estimate and therefore potentially increase the mine life. Given the significant 

mineralisation that exists down dip for the skarn mineralisation and the continuity of mineralisation observed, MMC 

believes there is significant potential to increase the underground mine life in the medium to long-term. 

Table 16-21 Jiama Copper-Polymetallic Project – Mine Life for Individual Mines 

Mine Unit Mine Life 

Tongqianshan Years 3 

Niumatang Years 8 

Jiaoyan Years 21 

South Pit Years 8 

UG North Years 29 

UG South Years 21 


16.9 MINING EQUIPMENT 

Contractors will be used to operate all equipment for both the open cut and underground operations. Currently separate 

contracting companies are used to operate Tongqianshan and Niumatang. 


A conventional truck and loader mining system was selected as it offers the following advantages: 

 

 

 

 

 

 

 

Cost effective; 

Proven technology; 

Flexible operations; 

Relatively easy to manage and maintain; 

Good access to spare parts; 

Potential to reduce capital outlay through leasing of equipment; and 

Adaptable for contractor mining. 

Table 16-22 provides the main mining equipment requirements MMC considers appropriate for Tongqianshan and 

Niumatang mines. This selection has been based on equipment specified in the Chinese Feasibility Study. 




Page 81 

Table 16-22 Jiama Copper-Polymetallic Project – Tongqianshan and Niumatang Equipment List 

Equipment Specification Quantity 

ATLAS D9 4 

Drill 

Sandvik 3 

Ingersoll 2 

Explosive Truck Dongfeng 2 

HITACHI 870 4 

HITACHI 450 1 

HITACHI 360 3 

Excavator 

HITACHI 330 3 

HITACHI 210 2 

HYUNDAI 805 1 

HYUNDAI 455 1 

CAT 330 2 

Tonly TL85 (60t) 15 

Truck 

Bei Ben (40t) 21 

TEREX (50t) 10 


Table 16-23 provides the main mining equipment requirements MMC considers appropriate for South Pit and Jiaoyan 

mine. This selection has been based on the Feasibility Study. MMC considers the equipment selected to be suitable for 

the proposed mining operation and forecasted production rate. Due to the long mine life, opportunity exists to review and 

optimise the equipment selection, when equipment is due to be replaced, which MMC envisages will occur twice during 

the proposed mine life. 

Table 16-23 Jiama Copper-Polymetallic Project – Jiaoyan and South Pit Equipment List 


Rotary Drill 250mm 2 

Hydraulic Drill 165mm 2 

Hydraulic Rockbreaker 2 

Hydraulic Backboe Excavator 5 cu.m 2 

Shovel 

Excavator 8 cu.m 4 

Truck 54t 25 

Bulldozer 320Horse power 3 

Water truck 25t 2 

Front end Loader 5 cu.m ZL90 2 

Grader 120Horse power 1 

Roller 180 horse power 1 

Charging vehicle 15t 2 

Hydraulic Backboe Excavator 1.5 cu.m 1 

Refueling truck 8t 1 





Page 82 


Table 16-24 provides the main mining equipment requirements described in the Chinese Feasibility Study for the 

underground mine. MMC has reviewed and validated this selection. 

Table 16-24 Jiama Copper-Polymetallic Project – Underground Mine Equipment List 


Stope Drilling 

Hydraulic Jumbo SimbaH1354 11 

Drilling Jumbo Boomer281 1 

Ore transport Equipment 

Electric LHD TORO1400E(6 cu.m) 13 

Hydraulic LHD TORO9 (6 cu.m) 3 

Hydraulic LHD ACY-3 (3 cu.m) 4 

Development Equipment 

Hydraulic Jumbo Boomer281 15 

Jumbo YSP-45 14 

Jumbo YT27 8 

Creeping Cage PG -1 9 

Waste transport Equipment 

Hydraulic LHD JCY-3 (3 cu.m) 4 

Gathering arm Loader WZG-120 6 

Loader Z-30 4 

Auxiliary Equipment 

Concrete Spray PZS3000 10 

Concrete Spray PZ-5 7 

Mining Charging machine BCJ-4 8 

Development Charging machine BQF-100 11 

Refueling Truck JY-5 4 

Material Truck EQ-240 10 

Service Car JY-5 4 

Pickup Truck TFR55HDLJX 4 

Local Fan JK58-2No4 29 

Local Fan JK58-2No5 47 


For the development phases of the underground mining operation a single boom Atlas Copco Boomer drill jumbo has 

been selected. Although the penetration rate of the COP1838 drill may be suitable, in order to more fully meet the 

coverage requirements, a two boom jumbo could be considered. With a 6.3 m x 8.7m coverage the 2 boom Boomer 282 

has a 45% greater coverage than the 6.1m x 6.1m coverage of the single boom Boomer 281. 

The selected stope drilling rig, the Simba 1354 by Atlas Copco, has a hole length capability of 33 m which is likely to meet 

the majority of the drilling requirements. In the ‘Small Stage Open Stope method of bottom plate trench’ when the orebody 

is 30 m thick, however, the hole length requirement is likely to be greater than 36m. 

The Load-Haul-Dump unit nominated is the Toro 1400E (this is now the Sandvik LH514E). The standard bucket size is 5.4 

cu.m, with a tramming capacity of 14 t. The nominated bucket size is 6.0 cu.m. At a 90% fill factor the capacity is 5.4 

cu.m. At a density of 3.11 t.cu and 40% swell this load is 11.9 t, which is within the tramming capacity of the loader. The 

standard 1,000 V cable length on this loader is 400 m (380 m usable). At this maximum trailing cable length the 

productivity is 35% of that at 100 m tramming distance. As they are electric drive loaders, altitude should have no effect. 

The diesel powered equipment is likely to achieve 80% efficiency due to the effect of altitude. 

The ancillary equipment should be able to satisfactorily meet the mining requirement. 

16.10 CROWN PILLAR 

While Niumatang and South Pit are still in operation a stoping method that employs a cemented fill will be utilised to 

maintain the stability of the open pit walls and floor. Once mining has ceased in the open pits, the SLC mining method will 

be used to mine the material contained in the crown pillar, which is located in the floor of the open pit. With the addition of 

broken rock into the base of the open pit, on top of the crown pillar material, this ore can be recovered. 




Page 83 

16.11 GEOTECHNICAL 

Site personal state no geotechnical issues have been encountered during operation of Tongqianshan and Niumatang 

open pits since commencement in 2010. Nevertheless, as underground mine workings are present in the Tongqianshan 

pit, MMC recommends the Company ensures these voids are identified within the future mining areas as mining 

progresses to avoid safety and production risks. 

Additionally, stability of the pit walls will be crucial to enable the pits to achieve their design depths of over 300 m. 

Therefore, monitoring of the pit walls should be routine practice to ensure safety of the workers. 

MMC recommends further geotechnical analysis be undertaken for South Pit and Jiaoyan, as only high level mine 

planning has been completed for these two areas. Specifically, pit slopes for South Pit and Jiaoyan should be better 

defined with detailed geotechnical studies undertaken. These studies introduce the potential to reduce operating costs for 

South Pit and Jiaoyan pit if the pit slopes can be steepened without increasing the risk of wall failure. 

Additionally, due to the pit boundary of South Pit, the location of the South Haulage Shaft should be further examined to 

ensure that it will be safe for use. 

In the Chinese Feasibility Study the RQD of the skarn material is stated to be 46.85 and poor quality. Therefore MMC 

recommends that exposures in the underground mining area should be small and that void duration should be minimised. 

The recommendations for monitoring work to be conducted during production include: 

 

 

 

Monitoring of rock-mass stress variation; 

Monitoring of rock-mass displacement; and 

Rock-mass sonic wave testing. 

Further studies should be undertaken to better understand the rock mechanics specifically related to the underground 

mine. The Chinese Feasibility Study has only been able to make qualitative descriptions regarding the stress distribution 

characteristics of rock mass in the rock mechanics and general estimations regarding the ground surface caving. This has 

been due to the fact that there is a lack of raw data available for review that includes actual measured quantities for 

parameters such as original rock stress, lateral pressure coefficient, modulus of elasticity and Poisson’s ratio. 

MMC recommends the following additional geotechnical work include: 

 

 

 

 

 

Rock stress testing; 

Research on rock mass strain properties; 

Numerical analysis model; 

Photo-elastic simulation; and 

Ground pressure observation and analysis. 

16.12 WATER/HYDROLOGICAL 

Main hydrological issues associated with open cut mines will arise from rain (annual rainfall is 563 mm), which is 

predominately concentrated between June and September. As the topographical conditions of the open pit mining areas 

allow for natural drainage of the water, drainage systems are not necessary for the open cut mine sites. Nevertheless, to 

ensure that flooding does not occur, drainage systems involving water-collecting tanks and water pumps will be installed. 

There are no hydrological issues relating to the underground mining operations. 

16.13 MINING LEASES 

The current mining lease does not cover the entire proposed mining areas for the open pit and underground operation, as 

illustrated in Figure 16-4. In addition the forecast production rate for Phase II exceeds the current production capacity of 

the licences. MMC notes that all the production until 2014 is roughly within the current licence and allowable capacity. 

The proposed mining areas under consideration are currently covered by a valid exploration licence and under Chinese 

mining regulation there is a well-defined and regulated process by which an exploration licence is converted to a mining 

lease with the Company having commenced this process already. Hence MMC believes that there is reasonable 

expectation that this conversion will happen in a timely fashion so as not to impact the Company’s plans. 




Page 84 

17 RECOVERY METHODS 

17.1 INTRODUCTION 

MMC visited the current processing, the pilot testing and the dry tailings facilities between the 28th and 30th of April 2012. 

The Huatailong personnel were particularly helpful and co-operative. 

The current mineral processing plants include the operating Huatailong 1.8 Mtpa processing plant (capacity of 6,000 tpd of 

Cu-Mo-Pb-Zn ores) and a pilot processing plant (capacity of 600 tpd of Cu-Pb-Zn ores). The Huatailong processing plant 

started operation in 2010, while the pilot plant has been in existence at the site for many years since modification from an 

old processing plant. 

It is proposed that a new Huatailong processing plant be constructed to treat the copper-molybdenum sulphide ores from 

the deposit. It is forecast to have an overall throughput rate of 40 ktpd ROM (i.e. 12 Mtpa ROM of Cu-Mo ores) and 

commence production in 2014. Once commissioned, the overall processing capacity for the operation will be 13.8 Mtpa for 

Cu-Mo ores, not including 0.18 Mtpa for the Cu-Pb-Zn ores. 

The existing 6,000 tpd plant that was designed for processing both Cu-Mo and Cu-Pb-Zn ores, currently only processes 

Cu-Mo ores. Nevertheless it is possible to process Cu-Pb-Zn ores if required, depending on the mining schedule of Cu- 

Pb-Zn ores. The existing 600 tpd plant can support the proposed mining schedule of Cu-Pb-Zn ores. 

17.2 EXISTING MINERAL PROCESSING PLANT 

A summary of the existing processing plant is presented in Table 17-1. 

Table 17-1 Jiama Copper-Polymetallic Project - Processing Plant Overview 

Daily Capacity Annual Capacity 

Name of Plant 

tpd 

ktpa 

Ore Type 

Status 

Huatailong No.1 6,000 1,800 Cu-Mo Operating 

Note: 300 operating days per year 

The main existing processing facility was designed for the recovery of Cu, Pb, Zn, Au and Ag by a bulk flotation, followed 

by a Cu-Pb-Zn flotation circuit and Cu-Mo separation flotation circuit, finally producing separate Cu, Pb, Zn and Mo 

concentrates. The current operation, however, only treats the Cu-Mo ore with a low Mo content ore to produce only a Cu 

concentrate (Au and Ag are credits; Mo separation is not economic) by bulk flotation. The ore sources are equally split 

between the Tongshan and Niumatang mines. 

The processing flowsheet and plant are conventional and suitable for the processing of skarn copper-molybdenum 

sulphide materials (refer to Figure 17-1). The Cu-Pb-Mo bulk flotation circuit consists of one stage of roughing followed by 

three stages of scavenging, with the rougher concentrate being upgraded in three stages of cleaning. The Cu-Pb-Mo 

flotation tailings are fed to a zinc flotation circuit where zinc concentrate is produced with the final tailings reporting to a 

press filter for dewatering before being stockpiled in a tailings facility. 

The Cu-Pb-Mo bulk concentrate will report to the Cu-Pb separation flotation circuit, where a lead concentrate is produced 

as final concentrate. The tailings flow into a Cu-Mo separation flotation circuit for the production of separate copper and 

molybdenum concentrates. The final separate concentrates (i.e. Cu, Pb, Zn, and Mo) are dewatered by dedicated 

thickeners and filters. 

Most of the current plant feed is open cut sulphide Cu-Mo ore with a low Mo content, which has not been recovered as a 

separate Mo concentrate since the cost of the reagents used to separate the Mo exceeds the value of the Mo concentrate 

produced. With higher Mo head grades, a separate Mo concentrate would be expected to be produced. Consequently, 

due to the nature of the ore being fed to the operation, neither the Cu-Pb-Zn flotation circuit nor the Cu-Mo separation 

circuit have been operated. 

The internal laboratory has sufficient and competent facilities for the assaying requirements of geology and mining 

samples as well as plant shift samples. 




ROM Ore 

Cu-Pb Bulk Flotation 

Primary Jaw Crusher 

Conditioning 

Tank 

Tailings 

Concentrate 

Cu-Mo Separation Flotation 

Secondary Cone Crusher 

Thickener 

Cu-Pb Separation Flotation 

Ball Mill 

Hydrocyclone 

Regrinding Mill 

Screen 

Undersize 

Oversize 

Tertiary 

Cone 

Crusher 

Zinc Flotation 

Pb Concentrate 

Thickener 

Thickener 

Mo Concentrate 

Thickener 


Fine Ore Bin 

Thickener 

Zn 

Concentrate 

Final Tailings 

Ceramic 

Filter 

Ceramic 

Filter 

Ceramic 

Filter 

Hydrocyclone 

Ball Mill 

Ball Mill 

Oversize 

Ceramic 

Filter 

Zinc Concentrate 

Stockpile 

Lead Concentrate 

Stockpile 

Press Filter 

Molybdenum Concentrate 

Stockpile 

Final Tailings 

Stockpile 

Copper Concentrate 

Stockpile 

FIGURE 17-1 


Jiama Copper- Polymetallic Project 


6000 tpd Mineral Processing Flowsheet

Page 86 

Flowsheet Description 

Ore from the mines is crushed in the gyratory crusher at the mine site prior to being transported by dedicated train to the 

stockpile bin located in front of the crushing plant. ROM material (-300 mm) is discharged from the vibrating feeder and 

feeds a C110 jaw crusher (160 kW). The crushed ore reports to a screen, where the oversize ore feeds the secondary 

GHP500 cone crusher (400 kW) and the crushed product and screen undersize are stored in a fine ore storage bin. 

Ore recovered from the fine ore storage bin is fed to a single stage grinding circuit. The grinding circuit consists of two 

parallel lines, each with an overflow 4 m diameter by 8 m long ball mill (2000 kW) in closed circuit with a hydrocyclone and 

the underflow reporting to the ball mill feed. The hydrocyclone overflow (P 70=74 microns) reports by gravity to the flotation 

conditioning tank. 

The flotation circuit consists of a Cu-Pb-Mo bulk flotation circuit followed by a lead flotation circuit, a Cu-Mo separation 

flotation circuit and a zinc flotation circuit. The Cu-Pb-Mo bulk flotation circuit consists of a bank of rougher cells (16 cu.m) 

followed by a bank with three stages of scavenging cells (16 cu.m) with three stages of cleaning cells (2 cu.m). The third 

scavenger concentrate reports back to the feed of the previous scavenger stages, while the first scavenger concentrate 

reports to the rougher feed. The rougher concentrate is upgraded in three stages of cleaning with the first cleaner tailings 

reporting to the rougher feed. 

The cleaner concentrate feeds the lead flotation circuit, consisting of a bank of rougher cells (16 cu.m) followed by a bank 

with three stages of scavenging cells (16 cu.m) and four stages of cleaning cells (2 cu.m) to produce a final lead 

concentrate. The tailings flow into a 1.5 m diameter by 3 m long ball mill in closed circuit with a hydrocyclone. The regrind 

product feeds the Cu-Mo separation flotation circuit for further upgrading. 

The Cu-Mo separation flotation circuit consists of a rougher flotation column followed by a bank with two stages of 

scavenging cells (2 cu.m) and two stages of column cleaning where a final molybdenum concentrate and a final copper 

concentrate (tailings) are produced. 

The final concentrates (Cu, Mo, Pb and Zn) are dewatered by dedicated thickeners and filters equipped for each 

concentrate and then recovered to a storage stockpile before transportation to the smelters. 

The scavenger flotation tailings is dewatered in eight membrane press filters before being stored in the tailings facility with 

process water recovery from both filtration as well as the tailings dam. 

Equipment 

The key processing equipment is summarised in Table 17-2. MMC considers that the equipment is typical of the most 

modern flotation processing equipment available and is suitable for the processing capacity and the production of 

marketable concentrates. 

A comprehensive quality management system was implemented using modern technical standards. MMC was provided 

with the quality data for procured materials as well as the requirements for operators. The operators appeared to be 

diligent, with the process visibly operating well, with a high degree of automation and control. Overall, it appears to be a 

well-run operation. 

The Cu-Pb-Zn separation circuit, as well as the Cu-Mo separation flotation circuit, are currently not operated since the 

current plant feed does not contain sufficient Cu, Pb- or Mo to warrant recovery. The amount of Cu-Pb-Zn ore available for 

treatment was not known during the plant design. This idle equipment would provide an opportunity for the proposed 

processing expansion of Cu-Pb-Zn ores. 

The high moisture content of the Cu concentrates (13%) would be hard to overcome by using ceramic filters since this 

equipment is not capable of reaching the desired results at the high altitude (more than 4,500 m). Pressure plate filtration 

method followed by an air blowing cycle is recommended to significantly lower the moisture content of the concentrate. 




Page 87 

Table 17-2 Jiama Copper-Polymetallic Project –Equipment List- Huatailong Flotation Plant 

Items Specification Number 

Crushing 

Vibration Feeder GZT1560 1 

Jaw Crusher C110 1 

Cone Crusher HP400 (38mm) 1 

Cone Crusher HP500 (18mm) 2 

Electromagnetic Separators PDC-10T2 1 

Vibration Feeder GLJ1230 3 

Vibration Screen 

2YKAA2460-AT 

Grinding and Flotation 

Disc Feeder MBR16 14 

Wet Overflow Ball Mill 4m Ø ×8m 2 

Wet Overflow Ball Mill 1.5m Ø×3m 1 

Hydrocyclone 6-3178 2 

Hydrocyclone 2-3139 1 

Conditioning Tank 3.5m Ø×3.5m 8 

Conditioning Tank 2m Ø×2m 5 


Flotation KYFⅡ-16 46 

Flotation XCFⅡ-16 22 

Flotation KYFⅡ-2 46 

Flotation XCFⅡ-2 34 

Flotation Column KYZ1810 1 



Conditioning Tank 1.5mØ×1.5m 1 

Chute Feeder GZC40120 1 

Cone Conditioning Tank 3m Ø×3m 1 

Concentrate Dewatering 

Ceramic Filter TC-36 1 



Ceramic Filter TT-45B3b 1 

Box-type (diaphragm)Press Filter XMZG20/800-U 1 

Paddle Steam Dryer WH8-A 1 

Automatic packaging machine DCS-BD 1 

Thickener GNZ-30m Ø 2 

Thickener NXZ-18m Ø 1 



Tailings Thickener GZN-60m Ø 4 

Diaphragm DGMB255/11 3 

Tailings Dewatering 

Automatic Membrane Filter Press KZG600/2000-U 8 

Air Compressor SA-375A 3 


Source: provided by the Company 

Mineral Processing Performance 

The currently processed Cu-Mo ore is a blended ore sourced mainly from the Tongqianshan mine of variable copper 

grades but with relatively consistent Au and Ag grades among the different mining areas (refer to Table 17-3). 




Page 88 

Table 17-3 Jiama Copper-Polymetallic Project – Processed Ore from Various Mining Sites 

Element 

2011 Actual 

Unit 

Tongqianshan 

Mining Site 

48Line 

Open 

Cut 

Niumatang 

Wenzhou 

No.2 

Decline 

Decline 

(Jianxi Weile) 

4650 

Roadway 

Mined 

Tonnes kt 989.97 119.99 317.06 72.28 213.80 10.01 1,723.12 

Cu % 0.62 0.62 0.76 0.91 1.24 0.89 0.74 

Au g/t 0.32 0.32 0.37 0.35 0.35 0.42 0.34 

Ag g/t 22.21 21.62 24.16 20.69 23.00 22.05 22.72 

Mo % - - - - - - - 

Pb % 0.98 0.98 

Zn % 0.36 0.36 

2012 Planned 

Mined 

Tonnes kt 656.38 541.36 82.66 106.60 1,400 

Cu % 0.66 0.80 1.39 1.55 0.83 

Au g/t 0.23 0.38 0.43 0.39 0.32 

Ag g/t 21.17 22.96 16.52 25.47 21.96 

Mo % 0.01 0.04 0.02 0.02 0.02 


The production performance is outlined in Table 17-4, which estimates the quantity of marketable copper concentrate 

containing silver and gold produced, based on recoveries for copper, gold and silver of 88%, 56% and 63%. MMC 

considers that these recoveries are reasonable. There were no Mo operational data for review. 

Table 17-4 Jiama Copper-Polymetallic Project –Current Production Performance 

Items Element Unit 2011 Actual 2012 Forecast 

Processed Ore Tonnes - Mtpa 1.66 1.35 

Days Per Year - d 299 274 

Availability - % 89 75 

Tonnes Per Day - d 5,560 4,927 

Cu % 0.67 0.85 

Feed Grade 

Au g/t 0.29 0.33 

Ag g/t 21.55 25.04 

Mo % - 0.02 

Concentrate Tonnes t 47,445 38,740 

Cu t 9,863 9,616 

Metal 

Au kg 267 258 

Ag t 23 19 

Mo t - 143 

Cu % 88.24 84.13 

Recovery 

Au % 55.89 58.11 

Ag % 63.23 55.96 

Mo % 0 56 

Source: provided by the Company with modification by MMC 

17.2.1 COPPER-LEAD-ZINC PILOT PLANT 

The existing copper-lead-zinc pilot plant (capacity 600 tpd) was modified from an old processing plant with some 

refurbished equipment. These facilities provide the opportunity for processing the Cu-Pb-Zn ores at a production rate of 

0.2 Mtpa as proposed in the Chinese Feasibility Study. The modification of the pilot processing plant and original pilot 

testing operation occurred during 2011. 

MMC considers that the process flowsheet and equipment are satisfactory for the proposed processing capacity and the 

production of three marketable concentrates (Cu, Pb and Zn). 

The processing circuit is a conventional comminution-flotation operation in which separate copper, lead and zinc 

concentrates are produced. The flowsheet as presented in Figure 17-2 consists of three stages of crushing, one stage of 

milling followed by a separate lead flotation, copper flotation circuit and a zinc flotation circuit. The milling circuit employs a 

conventional ball mill for grinding and a spiral to classify the slurry for flotation. The copper flotation circuit consists of one 

Total 




Page 89 

stage of roughing followed by three stages of scavenging, with the rougher concentrate being upgraded to a final 

concentrate by two stages of cleaning. Both lead and zinc flotation circuits employ one stage of roughing followed by two 

stages of scavenging as well as two stages of cleaning. The separate copper, lead and zinc concentrates are initially 

dewatered in separate thickeners followed by filtration by disc filters. 

The plant equipment is listed in Table 17-5. Some equipment and facilities have been refurbished. 

Table 17-5 Jiama Copper-Polymetallic Project – Equipment List- Huatailong Pilot Plant 

Items Specification Numbers 

Screen YA1536 1 

Jaw Crusher FK05-11-22 2 

Crusher PEF 1 

Cone Crusher GP100M 1 

Spiral Classifier 2m Ø 2 

Ball Mill 2.1m Ø x 3.6m 2 

Flotation 31 

Flotation 32 

XBT elevated Conditioning Tank XBT 3 

Conditioning Tank RJ25 4 

Vibrating Mill Prototype RK/ZZM-400 1 

Multifunction Vacuum Filter RK/ZL-260/200 2 

Ventilation Centrifuge 4-72N04A 1 

Magnetic Separator RCYB-6.5 1 

Thickener NXZ-9 2 

Thickener NXZ-12 1 



The flowsheet is relatively standard and employs basic processing principles. Some aspects of the flowsheet upgrade 

were based on testing undertaken internally and by testing institutes, such as the requirement for fine grinding (currently 

P 70=74 microns), modification of thickening facilities, upgrading of filtration capacity with modern ceramic filters, and 

relocation of the flotation reagent additions for zinc recovery. 

It was noted that in the previous pilot testing, the tested ores were considered not to be fresh (i.e. oxidised) which resulted 

in a poor metallurgical performance (refer to Section 13.4.3). Further investigations with a representative fresh sample 

would be required to understand the potential for improvement. 




ROM Ore 

Flotation Feed 

Jaw Crusher 

Cleaner 3 Cleaner 2 Cleaner 1 Rougher Scavenger 1 Scavenger 2 Scavenger 3 

Tailings 

Secondary Cone Crusher 

Conditioning 

Tank 

Filter 

Concentrate 


Stockpile 

Conditioning Tank 

Cleaner 2 Cleaner 1 Rougher Scavenger 1 Scavenger 2 

Screen 

Oversize 

Tertiary 

Cone 

Crusher 

Cleaner 2 Cleaner 1 Rougher Scavenger 1 Scavenger 2 

Conditioning 

Tank 

Thickener 

Fine Ore Bin 

Oversize 

Spiral Classifier 

Undersize 

Filter 

Thickener 

Thickener 

Filter 

Ball Mill 

Lead Concentrate 

Stockpile 

Filter 

Tailings Stockpile 

Zinc Concentrate 

Stockpile FIGURE 17-2 


Jiama Copper- Polymetallic Project 


Lead - Zinc Pilot Processing Flowsheet

Page 91 

17.3 PROPOSED MINERAL PROCESSING PLANT 

It is proposed that another mineral processing plant be designed and constructed to treat the two separate Cu-Mo ore 

types, namely skarn and hornfels hosted types at a rate of 20,000 tpd for each type of ore. The Chinese Feasibility Study 

is ongoing. It was planned that the mineral processing plant would commence construction in 2012 and the subsequent 

production in 2013. 

The proposed mineral processing plant is based on the metallurgical testing results by CGRI, as well as that from the 

existing mineral processing operation. The processing plant would be a conventional flotation plant with a total capacity of 

40 ktpd. 

A summary of the proposed processing plant is presented in Table 17-6. 

Table 17-6 Jiama Copper-Polymetallic Project – Proposed Processing Plant Overview 

Daily Capacity Annual Capacity 

Name of Plant 

tpd 

Mtpa 

Huatailong No.2 40,000 12 

Note: 300 operating days per year 

Ore Type 

Primary Cu-Mo 

Sulphides 

Status 

Chinese 

Feasibility Study 

The proposed mineral processing flowsheet and plant employ a SAG milling circuit and conventional flotation circuit (refer 

to Figure 17-3). The two processing lines were designed for two types of ore, which have significantly different 

characteristics in terms of head grades, mineralogy and hardness. The comminution circuit would consist of SAG mill 

followed by a ball mill with a pebble crusher. The flotation circuit would include a Cu-Mo bulk flotation with a concentrate 

regrind circuit followed by a Cu-Mo separation flotation circuit. The Chinese Feasibility Study has proposed the tailings will 

be thicken by deep cone thickener and wet disposal in a tailings dam. While an information provided during site visit has 

stated that the flotation tailings would be dewatered by filter presses before reporting to a dry tailings facility for storage, 

while the final copper concentrate is dewatered by thickener sand ceramic filters. The molybdenum concentrate is 

dewatered by filter presses followed by dryers. 




ROM Ore 

Cu-Mo Bulk Flotation 

Gyratory 

Crusher 

Concentrate 


Oversize 

Tailings 

Surge 

Bin 

SAG 

Hydrocyclone 

Undersize 

Secondary 

Ball Mill 

Tailings 

Stockpile 

Filter 


Cone 

Crusher 

Oversize 

Screen 

Conditioning 

Tank 


undersize 

Ball Mill 

Ball Mill 

Hydrocyclone 

Oversize 

Dryer 

Press 

Filter 


Stockpile 

Thickener 

Ceramic 

Filter 

FIGURE 17-3 

Molybdenum Concentrate Stockpile 




40 ktpd Mineral Processing Flowsheet

Page 93 

Flowsheet Description 

The crushed ore (minus 300 mm) from the mining site is conveyed to the stockpile (live capacity of 46,172 t for 28 hours 

storage) and recovered by a feeder onto a conveyor to feed a 9.8 m diameter by 4.9 m long SAG mill (11.2 MW) with a 

vibrating screen on the mill discharge. The discharge screen oversize in the form of pebbles reports to a storage bin (115 

cu.m), which feeds two parallel crushing circuits that are based on each ore type. Pebbles would be conveyed to two HP 

400 cone crushers in closed circuit with the SAG mill for crushing as required. 

The screened discharge of the SAG mill in combination with the ball mill discharge is pumped to 660 mm diameter 

hydrocyclones where the underflow reports to 6.7 m diameter by 11.58 m long overflow ball mill (9.6 MW), and the 

overflow (P 70=74microns) gravitates to the flotation circuit. 

The process would be a typical copper-molybdenum separation, which is an appropriate flowsheet for the production of 

marketable copper and molybdenum concentrates. The first stage consists of bulk flotation, where the sulphide minerals 

are separated from the gangue and the bulk flotation concentrate treated by differential flotation to produce separate 

copper and molybdenum concentrates. 

The bulk flotation circuit is conventional, consisting of a rougher and three stages of scavengers (in total twenty four 200 

cu.m cells) with the rougher concentrate upgraded in three stages of cleaning (eight 70 cu.m cells). The tailings from the 

scavenger circuit are final tailings and would be directed to a paste thickener where the water is recovered for re-use in 

the process and the thickened solids pumped to the tailings storage facility. 

The cleaned bulk concentrate is subjected to dewatering and reagent removal in a 60m diameter thickener. The thickener 

underflow reports to an overflow 3.2 m diameter by 4.5 m long ball mill in closed cycle with a nest of ten 300 mm diameter 

hydrocyclones. The overflow (P 90=45 microns) is discharged to the Cu-Mo differential flotation circuit. 

In the differential flotation, the copper and iron sulphides are depressed and the molybdenum sulphide floated in a column 

roughing circuit (4.5m Ø ×10m) followed by three stages of scavenging (ten XCF/KYF40 cu.m cells). Three stages of 

column cleaning (3.2m Ø ×10m, 2.5m Ø×10, and 1.8m Ø×10m) is employed in both circuits to produce final grade 

concentrates. 

The copper concentrate is then dewatered in dedicated dewatering circuits, consisting of thickeners (15 m diameter). The 

thickened copper concentrate would be further dewatered by three ceramic disc filters (TC-80 sq.m) to produce final 

marketable products. The molybdenum concentrate is directly dewatered to less than 6% moisture by press filters followed 

by an electromagnetic spiral dryer. Water is recovered from de-watering and re-used in the process. 

The marketable copper concentrate and molybdenum concentrate is stored in concentrate warehouses (copper 2,880 

sq.m. for 30 days storage and molybdenum 720 sq.m for 60 days storage). 

Equipment Selection 

The key proposed processing equipment is summarised in Table 17-7. The equipment is suitable for a plant of this 

capacity and is typical of conventional modern flotation processing plants. 

The dewatering, crushing and ball milling equipment has been sized based on trade-off study calculations which were 

based on current operations and other similar operations. SAG mills of this size have been made and applied in many 

projects in China and internationally so there is sufficient experience in their operation and maintenance. 

MMC notes that the sizing of the comminution equipment is smaller than that indicated by comminution properties 

testwork by CITIC Heavy Industries Co. Ltd. For instance, the testwork suggests two 10.37 m diameter by 5.19 m long 

SAG mills (11,172 kW) for both ore types, as well as 7.32 m diameter by 12.5 m long overflow ball mill (13,000 kW) for 

grinding of skarn types ores and an overflow 6.7 m diameter by 11 m long ball mill (9,000 kW) for hornfels ores. 

MMC was provided with the data on the determination of the comminution properties, namely crushing and SAG milling 

work indices, unconfined compressive strength (UCS) as well as abrasion index (Ai). This has been conducted on the 

skarn type and hornfels type ore samples using three composites that reflect the variability of the different bodies, 

although the representativity of the samples requires further investigation. 

JK-SimMet modelling has been used to establish the size of the mill and the required power, as well as the necessaries for 

crushing of the SAG mill discharge oversize (pebble crusher), the transfer size and the size and power requirements of the 

ball milling circuit. Most importantly, this will confirm the possible mill throughput capacities 

Modern control and automatic technology would be applied for stable and optimised operation. 




Page 94 

Table 17-7 Jiama Copper-Polymetallic Project – Equipment List- Proposed Flotation Plant 

Items Specification Numbers Weight (t) Power (kW) 

Grinding and Flotation 

Heavy Apron Feeders 1.5m×12m 12 900 

SAG Mill 9.8m Ø ×4.9m 2 1,664 22,400 

Overflow Ball Mill 6.7m Ø ×11.58m 2 1,916 19,200 

Screen GJZKK4273AT 4 101 300 

Belt Feeder B=1,L=7.5 4 24 88 

Pebble Cone Crusher HP400 2 46 630 

Hydrocyclone FX660-GX-II×12 2 69 

Automatic Ball Adding Machine ECO-Q12-1 4 3 6 

Conditioning Tank 8.0m Ø x 8.0m 4 360 

Mechanical Flotation Cells KYF-200 cu.m 24 1,308 5,280 

Mechanical Flotation Cells KYF-70 cu.m 8 600 

Liner Mechanical Hand SAG and Ball Mill 1 6.5 

Reagent Conditioning Tank CF3.5m Ø x 3.5m 4 32 120 

Reagent Conditioning Tank CF2.5m Øx 2.5m 1 3.5 15 

Paste Thickener 42m Ø 2 320 


Overflow Ball Mill MQY3.2mØx4.5m 1 133.88 640.5 

Hydrocyclone 10XCZ300 1 

Flotation Column CCF4.5m Øx10m 1 




Conventional Flotation Cells KYF-40 cu.m 10 550 

Refrigeration Dryer HAD-6HTF 1 0.12 1.5 


Ceramic Filter TC-80 3 54 120 

High-pressure Membrane Filter Press XMG80/1000-UB 2 6.7 8 

Conditioning Tank 3.5m Ø ×3.5m 2 44 

Electromagnetic Spiral Dryer HD-DLH400 1 12.6 300 

Horizontal Screw Mixer WLDH-10000-02 1 55 

Packaging Machine LCS-1000-ZⅡ 4 12.6 

Air Compressor SA45A 2 1.96 90 

Refrigeration Dryer TSC2A 1 1.5 

Lime Preparation 

Ball Mill 1.5m Ø × 3.0m 1 16 90 

Sinking Spiral Classifier FC-15 1 16 15 

Hydrocyclone FX125 2 

Conditioning Tank 5.0m Ø × 5.5m 2 39 44 

Source: Feasibility Study, 2011 

Forecast Mineral Processing Performance 

The Feasibility Study forecasts a production performance based on the CGRI test works and similar operations. A 

summary combined with MMC’s assumptions based on up-to-date test work and studies is outlined in Table 17-8. 

The expected production rate of the proposed Processing Plant will commence in 2013. The processing plant will operate 

for 300 days per year. 

The overall production rate is considered to be reasonable. MMC notes that that the achievement of the scheduled 

production relies on consistently achieving the proposed plant ore grades. 

The Feasibility Study only refers to the processing of the dominant Cu-Mo ores at a scheduled 12 Mtpa, based on the 

mining schedule and does not address the processing of the Cu- Pb-Zn ores which should be processed at 0.2 Mtpa 

based on the mining schedule. Although the Cu-Pb-Zn ore represents only approximately 3% of total of the total ore 

resource, these ore types would require a different processing route to maximise revenues (i.e. the ability to make 

separate copper, lead and zinc concentrates). 




Page 95 

Table 17-8 Jiama Copper-Polymetallic Project – Expected Average Production Performance 

Products 

Elements 

Concentrate 

Quantity (tpa) 

Feed Product MMC Recovery ( 

Grade (%) Grade (%) %) 

Cu-Mo Ore 

Skarn 

Cu 147,600 0.615 22 88 


Au(g/t) 0.222 4.06 45 

Ag(g/t) 11.781 263.4 65* 

Mo Concentrate Mo 5,100 0.057 47 70 

Hornfels 

Cu Concentrate Cu 94,800 0.411 22 84 

Mo Concentrate Mo 1,200 0.019 47 48 

Cu-Pb-Zn Ore 

Skarn 

Cu Concentrate Cu 3,400 0.564 22* 88 

Pb Concentrate Pb 7,220 1.451 70* 88 

Zn Concentrate Zn 3,960 0.807 40* 75 

Overall recovery 

Au 45* 

Ag 60* 


Note: * modified by MMC 

MMC considers that a recovery of 88% at a concentrate grade of 22% Cu is achievable for Skarn ores with the proposed 

feed grades based on the operational record of the existing processing plants as well as the bench scale test results. The 

metallurgical performance of the molybdenum for the hornfels hosted ore type requires more testing. 

Grade and Recovery Variation 

MMC notes that the copper feed grade has a significant impact upon both recovery and operating costs. For example, 

higher copper feed grades mean lower operating costs and higher recoveries. These relationships should be developed 

for both the copper and molybdenum feed grades based on testwork. 

The development of a relationship between feed grade and recovery for both of these metals would allow incorporation of 

this data into the resource block model, the mine schedule and the metallurgical design. This would allow more accurate 

estimates of concentrate production schedules (grades, recoveries and volumes), equipment sizes and operating costs. 

A relationship of recovery versus feed grade using the plant operating data is proposed by the company as shown in 

Table 17-9, which suggests a linear relation between copper feed grade and recovery based on a relatively constant 

tailings copper grade. 

Table 17-9 Jiama Copper-Polymetallic Project – Theoretic Cu Recoveries-Feed Grade Relationship 

Feed Tailings Recovery 

Cu (%) Cu (%) Cu (%) 

0.40 0.066 83.12 

0.41 0.070 83.22 

0.42 0.069 83.96 

0.43 0.070 83.96 

0.44 0.062 86.19 

0.45 0.061 86.78 

0.46 0.061 87.15 

0.49 0.059 88.25 

0.52 0.060 88.70 

0.54 0.062 88.77 

0.57 0.064 89.02 

0.60 0.066 89.28 

0.61 0.067 89.30 

0.68 0.060 91.36 

0.70 0.062 91.37 

0.88 0.062 93.13 





Page 96 

Based on the historical data such as 2011, this relationship between the feed grade and recovery was more variable (refer 

to Table 17-10), which may be due to the operation not yet reaching the optimum processing conditions. 

Table 17-10 Jiama Copper-Polymetallic Project – 2011 Monthly Feed Grade and Recovery Relationship 

Cu Au Ag 

Time Feed Grade (%) Recovery (%) Feed Grade (g/t) Recovery (%) Feed Grade (g/t) Recovery (%) 

Feb-2011 0.60 86.10 0.25 41.36 21.14 63.44 

Mar-2011 0.62 86.53 0.25 40.76 22.50 63.56 

Apr-2011 0.64 83.66 0.36 52.63 22.23 54.10 

May-2011 0.79 85.03 0.38 29.88 24.03 70.28 

Jun-2011 0.81 86.24 0.33 49.64 24.52 63.34 

Jul-2011 0.63 86.97 0.31 50.32 21.72 59.28 

Aug-2011 0.64 90.45 0.34 53.31 20.92 60.72 

Sep-2011 0.64 90.10 0.23 60.36 21.37 52.75 

Oct-2011 0.60 88.08 0.31 53.94 21.00 69.77 

Nov-2011 0.58 87.53 0.28 57.45 18.64 59.95 

Dec-2011 0.91 94.61 0.41 68.42 21.15 78.88 

Sep-2010 0.74 73.82 0.27 42.28 23.58 53.01 

Oct-2010 0.77 72.81 0.36 39.02 29.58 43.21 

Nov-2010 0.68 80.65 0.26 55.68 24.24 54.34 

Dec-2010 0.60 76.51 0.21 47.89 25.21 52.25 

Source: Summary by MMC from the Data provided by the Company 

A molybdenum feed grade-recovery relationship would need to be developed based on the testing of both ore types for a 

range of molybdenum feed grades. 




Page 97 

18 PROJECT INFRASTRUCTURE 

Substantial infrastructure has been developed for the Phase I of the Project and includes access roads, power and water 

for mining and mineral processing as well as a tailings dam. The Company is in the process of upgrading these facilities to 

ensure that the forecast production expansion to 13.8 Mtpa ROM ore can be achieved during Phase II. As these upgrades 

are mostly further expansion of already build infrastructure it is unlikely that any material risks will be identified. 

The Project assets are generally located at high MSL elevations, ranging from 4,350 m to 5,410 m on the Tibetan Plateau. 

The site camp and existing processing facilities are located at an elevation of approximately 4,000 m, while the proposed 

processing plant would be at approximately elevation 4,420 m. The Project area has mountainous topography with steep 

slopes and large differences in elevation. There are some sparsely-populated Tibetan villages within the Project area. 

The winter season occurs from October through to March and the Project experiences frequent snow falls and is 

extremely cold. Only July and August are frost free months. The weather has a typical continental plateau climate, which 

introduces difficulties to both construction and operation. 

18.1 MINE SERVICES 

18.1.1 Roads 

The operation and facilities are accessible by a paved access road of approximately 8 km connecting the site office and 

processing plant to the Sichuan-Tibet Highway (G318) in the north. The mine site is located approximately 60 km west of 

Lhasa (capital of Tibet) and approximately 9 km east of the town of Metrorkongka. This infrastructure is already in place 

and sufficient to cater for the needs of the Phase II expansion in respect to supplying the mine site and allowing for the 

transportation of saleable products. 

The railroad, highways and airport are already in place connecting Lhasa city with other locations in China. A rail line 

connecting Lhasa with Jinchuan in Gansu province is available for concentrates transportation; some other rail lines are 

available for shipping to other places in China. 

18.1.2 Water Supply 

The freshwater supply is sourced from the downstream Chikang River, a tributary of the Lhasa River, which has a water 

flow between 10 to 20 k cu.m/d. A 10 km pipeline is available to supply water from the river pump station to the existing 

processing plant and the mining site. The future water source would be from the same place on the Chikang River with the 

fresh water capacity in the existing pipeline sufficient for the Phase II expansion. 

Water is currently recycled onsite, from tailings clarification as well as the concentrate filters, thickeners and tailings 

impoundments and this is factored into the total raw water requirement for the mine and the processing plants. It is 

estimated that for Phase II a total fresh water requirement of 93.6 k cu.m would be required for mining and processing 

when the production rate is expanded to 40 ktpd. The supply capacity of the river would be sufficient for the expansion. 

Some further water facilities, such as A1200 m DN700 water seepage drainage, semi-underground 12.0 m Ø × 13.0 m 

pumping station at capacity of Q 360 cu.m/ h and six 200LB-23.4 pumps would be required to support the water supply for 

following production expansion. 

18.1.3 Power Supply 

Currently power is sourced from a 110 kV electricity transmission line from the Metrorkongka substation located 

approximately 24 km north of the Project area, which has proven adequate at the current production rate. However, power 

supply in the central Tibet region has been generally insufficient for mining operations in the past. 

A new 750 kV/± 400 kV DC power grid line from Qinghai province to Tibet has been under construction since July 2010 

and is expected to be in service by the end of 2012. This will be the main source of power to meet the electricity needs of 

the Project production expansion during Phase II. 

18.2 CONSUMABLES, MATERIALS AND FUEL SUPPLY 

The Project is located in an economically underdeveloped area with no local large-scale machine manufacturing or 

repairing enterprises to supply external contract repair services. Except some sand, cement and building bricks, all mining 

and beneficiation consumables, raw materials, as well as fuels and oils, will need to be imported into Tibet for a reliable 

supply. A local dedicated truck transport fleet is currently servicing the Project’s needs between external supply sources 

and the mine site. 




Page 98 

18.3 TAILINGS STORAGE FACILITIES 

MMC inspected the existing tailings dam and the adjoining tailings filtration plant, which is approximately 2 km from the 

processing plant. The processing plant tailings (40% solids) are dewatered by membrane press filters (

Cu (USD/lb) 

Page 99 

19 MARKET STUDIES AND CONTRACTS 

The processing plant sells a copper concentrate to purchasers in Gansu Province. The Company sells all products on a 

spot price basis and has no long term contracts with purchasers. The Company has three indoor secure storage areas 

where it can store concentrates. All products are sold on a Free on Truck basis (“FOT”) with buyers responsible for 

transportation costs ex-mine. 

Concentrate products have a discount applied to the benchmark metal spot price as per the purchase contracts reviewed 

by MMC. From these applied discounts MMC were able to determine the net revenue attributable to the Project. Discounts 

applied to Molybdenum, Lead and Zinc have been estimated by MMC. The concentrate payment discount percentages 

are shown in Table 19-1. 

Table 19-1 Jiama Copper-Polymetallic Project – Payment discount for contained concentrate metals to 

benchmark spot metal price 

Source: MMC 

Metal Payment Discount % 

Cu 83.8 

Mo 68.1 

Au 84.0 

Ag 77.5 

Pb 80.0 

Zn 65.0 

MMC has received the actual revenue for 2011 and the first four months of 2012. This data shows revenue from Cu, Au 

and Ag. The historical pricing data shows a decrease of the benchmark Cu spot price from 5.64 USD/lb at the beginning of 

2011 to 4.10 USD/lb in April 2012. The benchmark Au spot price varies over this period but has a net gain from 1,300 

USD/troy Oz. to 1,600 USD/troy Oz. The silver spot price has decreased from 32.09 USD/Troy Oz. at the beginning of 

2011 to 29.75 USD/Troy Oz. in April 2012. These trends have been graphed and are shown in Figures 19-1, 19-2 and 19- 

3. 

Figure 19-1 Jiama Copper-Polymetallic Project – Historic Benchmark Cu Spot Price 

6.00 

Historical Benchmark Copper Price 

5.00 

4.00 

3.00 

2.00 

1.00 

0.00 

Cu Benchmark Price 




Au Price (USD/Troy Oz.) 

Ag Price (USD/Troy Oz.) 

Page 100 

Figure 19-2 Jiama Copper-Polymetallic Project – Historic Benchmark Au Spot Price 

2,000 

1,800 

1,600 

1,400 

1,200 

1,000 

800 

600 

400 

200 

0 

Historical Benchmark Gold Price 

Au Benchmark Price 

Figure 19-3 Jiama Copper-Polymetallic Project – Historic Benchmark Ag Spot Price 

50.00 

45.00 

40.00 

35.00 

30.00 

25.00 

20.00 

15.00 

10.00 

5.00 

0.00 

Historical Benchmark Silver Price 

Au Benchmark Price 

MMC has used benchmark spot metal prices based on various analyst reports and discussions with the Company to 

understand what the forecasted metal prices will be in future. The forecast spot metal prices used by MMC, which it 

considers to be reasonable, are shown in Table 19-2. All prices are listed in 2012 real term dollars. 




Cu (USD/lb) 

Page 101 

Table 19-2 Jiama Copper-Polymetallic Project – MMC Forward Pricing 

2012 2013 2014 2015 2016 2017 2018 2019 LT 

Cu USD/lb 3.70 3.60 3.50 3.50 3.42 3.31 3.22 3.10 2.90 

Mo USD/lb 15.11 16.16 16.33 17.00 18.00 18.00 18.00 18.00 18.00 

Zn USD/Metric t 2,113 2,325 2,442 2,485 2,560 2,281 2,220 2,138 2,000 

Pb USD/Metric t 2,198 2,355 2,432 2,461 2,452 2,281 2,220 2,138 2,000 

Au USD/Troy Oz. 1,749 1,798 1,585 1,539 1,475 1,380 1,380 1,380 1,380 

Ag USD/Troy Oz. 34.05 33.86 27.76 23.78 22.91 18.82 18.31 17.64 16.50 

The benchmark metal spot price for both Au and Ag used by MMC in 2012 is comparable to the actual spot prices being 

paid at the beginning of 2012. The Cu price used in 2012 is marginally lower than the actual spot price as received from 

China Gold in 2012. The Cu, Au and Ag prices trend down to longer term prices, which MMC believes to be reasonable. 

These prices have been graphed and are shown in Figures 19-4, 19-5, 19-6, 19-7, 19-8 and 19-9. 

Figure 19-4 Jiama Copper-Polymetallic Project – Forward benchmark spot Cu price MMC 

4.00 

Copper Price 

3.50 

3.00 

2.50 

2.00 

1.50 

1.00 

0.50 

0.00 

2012 2013 2014 2015 2016 2017 2018 2019 LT 




Mo (USD/lb) 

Zn (USD/tonne) 

Page 102 

Figure 19-5 Jiama Copper-Polymetallic Project – Forward benchmark spot Mo price MMC 

18.50 

Molybdenum Price 

18.00 

17.50 

17.00 

16.50 

16.00 

15.50 

15.00 

14.50 

14.00 

13.50 

2012 2013 2014 2015 2016 2017 2018 2019 LT 

Figure 19-6 Jiama Copper-Polymetallic Project – Forward benchmark spot Zn price MMC 

3,000 

Zinc Price 

2,500 

2,000 

1,500 

1,000 

500 

0 

2012 2013 2014 2015 2016 2017 2018 2019 LT 




Pb (USD/tonne) 

Au (USD/Troy Oz.) 

Page 103 

Figure 19-7 Jiama Copper-Polymetallic Project – Forward benchmark spot Pb price MMC 

3,000 

Lead Price 

2,500 

2,000 

1,500 

1,000 

500 

0 

2012 2013 2014 2015 2016 2017 2018 2019 LT 

Figure 19-8 Jiama Copper-Polymetallic Project – Forward benchmark spot Au price MMC 

2,000 

Gold Price 

1,800 

1,600 

1,400 

1,200 

1,000 

800 

600 

400 

200 

0 

2012 2013 2014 2015 2016 2017 2018 2019 LT 




Ag (USD/Troy Oz.) 

Page 104 

Figure 19-9 Jiama Copper-Polymetallic Project – Forward benchmark spot Ag price MMC 

40.0 

Silver Price 

35.0 

30.0 

25.0 

20.0 

15.0 

10.0 

5.0 

0.0 

2012 2013 2014 2015 2016 2017 2018 2019 LT 

The Cu spot price used by MMC trends down to 2.90 USD/lb, which MMC believes to be reasonable. The Project is most 

sensitive to the Cu price and therefore MMC has used a conservative long term Cu spot price. Lead and Zinc come only 

from the Underground (south) operation and are in such low tonnages that the net effect of prices is immaterial to the 

Project. 

The Molybdenum benchmark spot price increases from 15.11 USD/lb to a long term price of 18.0 USD/lb. 




Page 105 

20 ENVIRONMENTAL STUDIES, PERMITTING AND SOCIAL OR 

COMMUNITY IMPACT 

20.1 ENVIRONMENT 

The company complies with Chinese requirements to achieve a responsible standard of environmental protection. 

Environment protection measures for the mine site comprise: 

 

 

 

 

 

 

Water management: the site is being developed as a zero discharge operation, with an expectation of recycling all 

used process and TSF drainage water. A recycling rate of at least 84% is expected. The Company holds a water 

permit for the extraction of 7,300 cu.m/day for top up and domestic water, which is taken from the nearby Chikang 

River, which also receives any surplus waste water from the site following treatment in accordance with Chinese 

national standards. Waste water treatment includes sewage treatment and its reuse in the replanting program. 

Solid waste: waste rock from the open pits will initially be used to construct infrastructure foundations, particularly 

roads. Surplus waste material will be placed on constructed waste dumps. Underground waste will be mainly left 

underground or dumped into previously mine out voids. Tailings will be mixed with cement for use as stope fill, 

while TSFs will be constructed in adjacent valleys to store the remaining tailings material. 

Dust and air quality mitigation: includes the use of dust collectors (cyclones) and baghouses for the boiler houses, 

incinerator, the crushing and screening plant, and fine ore bin. Treated flue gas from these sources will be vented 

via stacks ranging in height from 20 m (crushing, screening, and fine bin areas) to 40 m (boilers). Other mitigation 

measures include the use of water sprays, including water trucks, use of paved or watered roads to reduce dust 

generated from mining and truck transport activities, and enclosure of dusty activities where possible. Personal 

protection devices are issued to workers to provide additional personal protection from dust. 

Noise control: includes the use of silencers, noise and vibration dampening on mobile equipment, enclosure of 

noisy equipment, use of insulation, and regular equipment maintenance. Company policy requires PPE use, such 

as ear muffs or ear plugs, for noise-affected workers. 

Environmental monitoring: A comprehensive air, water, and climatic monitoring plan. Data is used to build up an 

environmental baseline database. All analytical results comply with Chinese National Standards. 

Rehabilitation: a mine closure plan has been produced and approved as part of the Soil and Water Conservation 

Plan. The plan will be updated as the operation progresses and expands. 

20.2 COMMUNITY 

The Project has a policy of social responsibility towards the local community, with a focus on providing assistance and 

contributing towards social development. This is achieved through financially supporting local economic development, 

education, employment, training initiatives, local transport, communications, drinking water supply, and other social 

initiatives. 

Prior to mining operations being established in the area, the mine site was used for low-intensity grazing of yak and sheep 

with occasional scattered temporary shelters used by members of the nearby Jiama township. Land was acquired for the 

mine site and associated infrastructure corridors in compliance with PRC laws through both short-term and long-term 

leasing agreements, signed and approved by local government authorities. Compensation for land and land use rights 

was paid under these lease agreements in line with standard PRC guidelines. The community has, in general, welcomed 

the opportunity for employment in the area and has participated in ongoing dialogue with both the Company and the local 

government through the “Project Coordination and Development Management Committee” concerning the development 

and operation of the mine, potential environmental impacts and their management, and the scope and nature of 

community benefits to be generated by the development. 

MMC is not aware of any form of native title claim on the area and under PRC law there are no avenues for such claims. 

20.3 OCCUPATIONAL HEALTH AND SAFETY 

The Project has been under construction since June 2008 and is conducting its operations in accordance with specific 

national laws and regulations covering occupational health and safety (“OH&S”) in construction, mining, underground 

mining, production blasting and explosives handling, mineral processing, TSF design, hazardous wastes, environmental 

noise, fire protection and fire extinguishment, sanitary provisions, power provision, lightning and seismic protection, labour, 

and supervision. 

To manage the health and safety of the workforce, the mine is implementing an OH&S management system in line with 

national standards, with OH&S training currently in progress and regular medical checks for all employees. A medical 

clinic is located on site. An environmental emergency response plan is in place for the management of incidents such as 

chemical spills, floods and fire. 




Cost (USD/Ore tonne) 

Page 106 

21 CAPITAL AND OPERATING COSTS 

The life-of-mine forecast operating costs for the Project are set out in Table 21-1. The operating costs have been 

estimated by the Changsha Institute and were presented in the Chinese Feasibility Report. MMC has reviewed these cost 

estimates and considers them to be reasonable. These costs have been used in the economic analysis completed by 

MMC. 

Table 21-1 Jiama Copper-Polymetallic Project – Life of Mine Operating Costs (USD/ t processed) 

Cost Centre USD/t waste USD/t processed USD/lb Cu Equivalent 

Overburden Removal 2.09 6.30 

Open Cut Ore Mining 2.10 

Underground Mining 15.09 

Support 1.22 

Processing 

10.89(Cu/Mo) / 8.85(Cu/Pb/Zn) 

Administration & Other Overheads 4.28 

Total Mine Operating Costs/t processed 39.87 / 37.83 

Metal Selling and Transport 2.21 

Average royalty per ROM tonne 2.38 

VAT 3.65 

Total Project Operating Costs/t processed 48.10 / 46.06 1.58 / 2.26 

All operating costs are inclusive of VAT to the associated cost centre. This VAT on operating costs is calculated and 

deducted from the VAT paid on the concentrate. The total VAT paid in the project is the VAT on the concentrate sales less 

the deduction of the VAT paid on the operating cost. 

The cash costs per tonne of ore processed is shown in the graph below and shows the cost centre breakdown in unit 

costs. The greatest cash cost for the project is the direct mining costs for both the underground and open cut operations. 

This includes open cut mining, open cut waste removal, underground mining and development. 

Figure 21-1 Operating Cash Cost breakdown per tonne of ore processed 

Cash Cost Components (Pre-tax) 

90 

80 

70 

60 

50 

40 

30 

20 

10 

- 

OC Waste Removal OC Mining Support UG Mining Period Overheads Transport Processing Royalty Marketing VAT 




Page 107 

Capital expenditure that has already occurred in the previous years is shown in Table 21-2 below. This capital has been 

spent over the previous 4 years. The sunken capital expenditure has not been included in the economic valuation however 

the deprecation associated has been included to accurately reflect China Gold’s true tax liability. Depreciation on the 

Phase I capital expenditure has been received, MMC has calculated the written down value of these assets and then 

using a straight line depreciation method has depreciated these assets over the asset life going forward. 

The life-of-mine capital costs for the Project are set out in Table 21-3 below. The capital costs have been estimated by the 

Changsha Institute and were presented in the Feasibility Report. MMC has reviewed these cost estimates and considers 

them to be reasonable. All pre-stripping costs associated with the open cut mining operations have been included in the 

operating costs, this is in contrast to the Feasibility Study report which capitalises the prestripping cost. MMC has 

excluded pre-stripping from the capital expenditures as it better reflected in the operating costs as to account for the 

addition of South Pit. 

Table 21-2- Jiama Copper-Polymetallic Project – Sunken Capital Costs (Phase I) (kUSD) 

Capital Item 

Life of Mine Capital Cost (kUSD) 

Buildings 56,220 

Mine Infrastructure 146,744 

Equipment 61,955 

Land Purchases 4,935 

Other 41 

Total Capital Costs 269,894 

Table 21-3 Jiama Copper-Polymetallic Project – Life of Mine Capital Costs (Phase II) (kUSD) 

Capital Item 


Processing Plant 221,310 

Mining 355,434 

Engineering 76,273 

Loan Interest 27,769 

Mining Camp 24,327 


21.1 CAPITAL COSTS – MINING 

The Mining capital costs were estimated over the proposed life of mine period. The capital costs are estimated to have an 

accuracy of ± 25%. Greater variations in the estimated capital costs may occur if there are changes to the proposed mine 

plan. The mining capital costs included mining equipment and site engineering. A schedule showing the capital 

expenditure is below in Figure 21-2. As mentioned above all pre-stripping of waste material has been excluded from the 

capital expenditure and included in the operating costs as to fully reflect the amount of pre-strip need to expose the ore in 

all pits. 

The capital costs include the processing plant, mining, facilities, engineering and other contingency items. The addition of 

capital expenditure in 2021 is in preparation for the inclusion of the Jiaoyan open pit. 




Capital Cost kUSD 

2012 

2013 

2014 

2015 

2016 

2017 

2018 

2019 

2020 

2021 

2022 

2023 

2024 

2025 

2026 

2027 

2028 

2029 

2030 

2031 

2032 

2033 

2034 

2035 

2036 

2037 

2038 

2039 

2040 

2041 

2042 

2043 

2044 

Page 108 

Figure 21-2 Jiama Copper-Polymetallic Project – Mining Capital Costs kUSD 

300,000 

Mining Capital Expenditure 

250,000 

200,000 

150,000 

100,000 

50,000 

0 

Mine Capital Expenditure kUSD 

21.2 OPERATING COSTS – MINING 

The mining operating costs are detailed in Figure 21-3. Mine operating costs increase from 174.5 RMB/t Ore (27.7 USD 

/t) in 2012 to 389.3 RMB /t Ore (61.8 USD/t) in 2013 the mining costs then reduce and average out at approximately 190 

RMB/t Ore (30.2 USD/t) over the life of the mine. The change in cost is due to the large amount of pre-strip that occurs in 

2013 which is then evened out through an increase in ROM ore production in following years. The mine operating costs 

average out over the life of the project once the pre-stripping costs in 2013 are balanced with increases in ROM ore 

production, this has been achieved by optimizing and smoothing the schedules of the open cuts to create reasonable and 

practical mining schedules. 




US$/ t Ore 

Page 109 

Figure 21-3 Jiama Copper-Polymetallic Project – Mining Cost / Tonne Ore 

70.0 

Mining Cost US$ / Tonne Ore 

60.0 

50.0 

40.0 

30.0 

20.0 

10.0 

0.0 

Mining Cost US$ / Tonne Ore 

Note: the mine operating costs above include site administration and overheads and exclude VAT. 




Page 110 

21.3 CAPITAL COSTS – PROCESSING 

Table 21-3 provides a breakdown capital cost for the proposed Huatailong Processing Plant (40 ktpd). The overall 

forecast capital cost of 1,394.25 M RMB is relatively high compared to similar Chinese operations. MMC notes that there 

are significant costs of 506.63 M RMB for the grinding and flotation equipment and 231.63 M RMB for the tailings dam. 

These higher capital costs may be due to the remote location and the high altitude (4,500m) of the plant, which would 

impact equipment transportation, construction and installation. 

Table 21-4 Jiama Copper-Polymetallic Project – Proposed Processing Plants Capital Expenditure 

Items 

Civil 

Equipment Installation Total 

Main Processing Facilities Construction 

414.97 606.74 72.99 1,094.70 

(M RMB) (M RMB) (M RMB) 

Grinding and Flotation 103.72 506.63 49.98 660.33 

(M RMB) 

Copper-molybdenum Flotation 11.81 16.42 6.12 34.35 

Concentrate Dewatering 16.89 10.95 4.65 32.49 

Lime Preparation 3.20 2.48 0.71 6.38 

Raw Ore Stockpile 29.13 0.00 0.06 29.19 

Pebble Crushing 10.13 14.96 1.66 26.74 

Tailings Dewatering 6.00 37.31 1.81 45.12 

Conveying Station 2.47 0.00 0.01 2.48 

Tailings Dam 231.63 0.04 0.03 231.70 

Auxiliary Electronic Control 0.00 0.80 0.62 1.41 

Automation Instrumentation 0.00 17.15 7.35 24.50 

Auxiliary Facilities 82.18 69.60 147.68 299.46 

General Layout and Transportation 39.20 5.83 0.00 45.03 

Processing Industrial Sites 36.53 0.00 0.00 36.53 

3968m Level Processing industrial sites 2.67 0.00 0.00 2.67 

Transportation Equipment 0.00 5.83 0.00 5.83 

Water Supply and Drainage 20.18 27.25 73.42 120.85 

4084m Level Pressure Pump for Fresh Water 0.89 2.54 18.25 21.68 

4500m Level Pressure Pump for Recycle Water 0.72 0.46 1.30 2.47 

Pumping Station 0.28 0.60 1.39 2.27 

Pump of Tailings Recycle Water 0.19 0.26 1.10 1.55 

Pumping Station for Tailings 1.68 21.53 32.02 55.23 

Pressure Pump Station for Fresh Water 1.05 1.88 19.35 22.28 

Production Water Pond 0.97 0.00 0.00 0.97 

4500 Elevation Production High Water Pond 3.90 0.00 0.00 3.90 

Water Pond in Processing Plant 0.89 0.00 0.00 0.89 

High Water Pond in Processing Plant 8.18 0.00 0.00 8.18 

Suction Sump 0.59 0.00 0.00 0.59 

Pond for Tailings Recycle Water 0.84 0.00 0.00 0.84 

Power Transmitter and Telecommunications 5.20 21.78 57.88 84.86 

110KV Substation for Possessing Plant 5.20 21.78 3.56 30.54 

10KV Transmission Line 0.00 0.00 9.32 9.32 

110KV Transmission Line 0.00 0.00 45.00 45.00 

Pipe Network 0.20 2.70 12.40 15.30 

Solar Heating 0.00 8.92 2.21 11.12 

Compressed Air Station 0.70 2.24 0.56 3.50 

Warehouse 16.69 0.87 1.22 18.78 

Steel Warehouse 13.46 0.75 0.97 15.18 

Reagent and Materials Warehouse 3.23 0.13 0.25 3.61 

Administration and Processing 0.08 0.00 0.01 0.09 

Total 497.23 676.34 220.68 1,394.25 

Source: Chinese Feasibility Study 2011 

There are no significant capital expenditure costs required for the Cu-Pb-Zn facilities. 




Page 111 

21.4 OPERATING COSTS – PROCESSING 

21.4.1 Existing Operation 

Based on the information provided to MMC, there are several operating costs from different sources, which have been 

summarised in Table 21-4. 

Table 21-5 Jiama Copper-Polymetallic Project – Processing Operating Costs Summary (including Depreciation 

and Maintenance) 

Ore types Information Sources RMB/ ROM t 

FS Design 72 

Actual(2011)provided by the Company 67 

Cu-Mo Ore 

Actual(January + February) summarised by MMC 84 

Data provided by the Company 93 

Cu-Pb-Zn Ore MMC Assumed 84 

Source: Summary by MMC based on data provided by the Company 

MMC reviewed historical operating cost data for a two month period in 2011 at the current processing plant. The overall 

processing cost for the 6,000 tpd processing plant is between 79 to 90 RMB per ROM tonne, as shown in Table 21-5. 

This was generally consistent with the processing operating costs of 94 RMB/t provided by the company. MMC notes that 

these costs are higher than similar operations due to a combination of location (higher transport costs) and the high 

altitude. 

Table 21-6 Jiama Copper-Polymetallic Project – Historical Processing Plant Operating Cost 

Materials 

Price 

(RMB/kg) 

Unit 

Unit 

Consumption 

(kg/t) 

February 

Unit Cost 

(RMB/ milled t) 

January 

Unit 

Consumption 

(kg/t) 

Unit Cost 

(RMB/ 

milled t) 

Crushing 

Jaw Crushing 12.37 kg 0.03 0.61 0.05 0.6 

Liner (HP400) 21.29 kg 0.03 0.77 0 

Liner (HP500) 27.48 kg 0.06 1.62 0 

Machine Oil t 0.01 0.01 

Power 0.58 kWh 3.38 1.96 2.12 

Other Materials t 2.63 3.65 1.19 

Milling and Flotation 

Ball 5.74 kg 1.47 13.03 0.75 5.21 

Liner 7.78 kg 0.34 3.57 0.35 3.62 

Z200 22.25 kg 0 0 

Butyl Xanthate 10.56 kg 0.35 3.74 0.21 2.17 

Turpentine Oil 11.01 kg 0.03 0.31 0.03 0.31 

Sodium Sulphide 4.19 kg 0 0 

Sodium Sulphite 3.54 kg 0 0 

Ammonium Aerofloat 16.74 kg 0.01 0.21 0 0.04 

Lime 0.6 kg 0 0 

Machine oil RMB 0.54 0.33 

Other Materials RMB 4.51 15.1 

Power 0.58 kWh 41.75 24.21 41.96 24.34 

Tailings Dewatering 

Machine Oil 

t 

Other Materials t 10.05 0.89 

Power 0.58 kWh 3.95 2.29 3.98 2.31 


Machine Oil t 0.02 0.1 

Materials t 0.9 1.4 

Power 0.58 kWh 8.78 5.09 8.7 5.05 

Sub-Total 76.08 64.77 

Manufacturing (Depreciation, Maintenance and 

Other) by MMC 

14 14 

Total Operating Cost RMB / t 90.08 78.77 

Source: summary based on the data provided by the Company 




Page 112 

The forecast overall processing cost for mineral processing plant in the ramp up years is approximately 72 RMB/ROM t, as 

shown in Table 21-6. Power and reagent dominate the operating costs, with sodium sulphide constituting the highest 

reagent cost. This operating cost estimate includes depreciation and maintenance expenses related to the processing 

plant only. MMC considers that this operating cost is reasonable for a flotation operation of this size using the proposed 

processing option. 

Table 21-7 Jiama Copper-Polymetallic Project – Proposed Processing Plants Operating Cost 

Material 

Unit 

Unit Consumption 

(kg/ROM t) Price(RMB/t) Cost Centre(RMB/t) 

Ball kg 1.50 6.00 9.00 

Liner kg 0.27 12.00 3.24 

Belt sq.m 0.005 500 2.25 

Screen kg 0.02 9.00 0.16 

Lime kg 2.00 0.60 1.20 

Sodium Silicate kg 0.81 2.25 1.82 

Butyl Xanthate kg 0.02 11.00 0.25 

Turpentine Oil kg 0.01 10.30 0.07 

Sodium Sulfide kg 2.59 4.20 10.88 

SQ kg 0.04 15.00 0.53 

Kerosene kg 0.20 10.18 2.04 

Engine Oil kg 0.04 11.00 0.39 

Butter kg 0.05 17.05 0.77 

Other 2.00 

Tailings Operating Costs 5.00 

Power kWh 22.6 0.65 14.71 

Water cu.m 0.70 2.50 1.75 

Manpower Person 266 84,000 1.77 

Sub-total 57.83 

Depreciation 7.29 

Maintenance 6.01 

Others 0.88 

Total Operating Costs (RMB/t) 72.00 

Source: Chinese Feasibility Study 2011 

The differential flotation testing of Cu-Mo ores has indicated a significant operating cost with regard to the separation of 

molybdenum from the Cu-Mo bulk concentrate. This cost is 12.81 RMB/t, mainly due to additional required reagents and is 

shown in Table 21-7. 

Table 21-8 Jiama Copper-Polymetallic Project – Proposed Processing Plants Operating Cost 

Reagents Unit Consumption(g/t) Price (RMB) Unit Cost(RMB/ROM t) 

kerosene 16.4 9,200 0.20 

Turpentine Oil 1.5 11,000 0.02 

Na 2S 2,150 4,186 9.00 

ZG-2 850 4,300 3.655 

Total 12.81 

Source: Report for Differential Flotation Verification Testing of Jiama Cu-Mo ores, compiled by Internal Testing Lab of the Company in 

April, 2011 




Page 113 

21.4.2 Cu-Pb-Zn Ore 

The process operating cost for the treatment of Cu-Pb-Zn ores has not been directly estimated, however MMC has 

estimated that it would be approximately 84 RMB/ROM t, based on the Cu-Mo cost assumption as well as the 

consumables required based on the Cu-Pb-Zn ore testwork (refer to Table 27-8). 

Table 21-9 Jiama Copper-Polymetallic Project – Forecast Cu-Pb-Zn Operating Cost 

Reagent 

Consumption 

(g/ROM t) 

Price 

(RMB/t) 

Cost 

(RMB/t) 

BRIMM Site Duplicate Testing 26.13 

Lime 1,800 600 1.08 

Na 2S 205 4,186 0.86 

ZnSO 4 1,800 4,313 7.76 

BK908 47.5 24,000 1.13 

BK809 85 20,000 1.70 

BK204 25.5 10,000 0.26 

BK586 386 14,500 5.60 

BK8092 73 12,000 0.88 

Carbon 160 11,000 1.76 

CuSO 4 320 15,926 5.10 

2011 Internal Laboratory Metallurgy Testing 29.09 

Lime 980 0.59 

ZG-1 2440 8.63 

ZG-2 379 1.59 

ZG-3 1,530 6.60 

CuSO 4 200 3.19 

HTL-1 52.5 1.17 

HTL-2 18 0.22 

Butyl Xanthate 33 0.35 

Carbon 600 6.60 

Na 2S 40 0.17 

Source: metallurgy testing reports by the Internal Laboratory and BRIMM 

Note: Cu-Pb Bulk Flotation - Differential -Zn Flotation Option 




Page 114 

22 ECONOMIC ANALYSIS 

An NPV (post-tax) analysis has been completed at a 7%, 9% and 11% discount rate. Base case reserve economic model 

results at a discount rate of 9% are shown in Table 30-2 in Annexure C and the cumulative NPV over the life of the mine 

is shown in Figure 22-1. 

The key economic inputs used in this valuation have been described in detail in Sections 19 and 21. These inputs are 

summarised in Table 22-1 and Table 22-2 below. 

The recoveries used in the economic models are shown in table Table 30-1 in Annexure C. The recoveries vary between 

the different ore types and by metal. The Skarn ore type has a higher recovery of Copper and Molybdenum than the 

Hornfels ore type. The Cu-Mo concentrate product produced from the Hornfels ore body only recovers Cu and Mo 

whereas the Cu-Mo concentrate produced by the Skarn ore recovers Cu, Mo, Au and Ag. South pit, Niumantang and 

Tongqianshan are dominated by the Skarn ore type whereas the Jiaoyan pit is dominated by the Hornfels ore type. All 

open pit operations produce a Cu-Mo concentrate product regardless of the ore type. The underground operations, broken 

into North and South, are dominated by Skarn ore where Underground North produces a Cu-Mo concentrate product 

whilst Underground South produces the Cu-Pb-Zn concentrate product. 

All Copper, Molybdenum, Zinc and Lead sold are subject to a royalty of 2% and all Gold and Silver sold are subject to a 

royalty of 2.8%. A resource tax of 5 RMB / ROM t is applied to Niumatang, Tongqianshan, South Pit and the underground 

operation. Due to Government incentives, Jiaoyan is subject to 2.5 RMB / ROM t. Copper, molybdenum, lead and zinc 

produced from the mine are subject to a VAT of 17%. Additionally, this Project is also subject to a construction tax of 7% 

of VAT and education tax of 3% of VAT. 

Depreciation of assets has been undertaken using a straight line method and depreciated over the useful asset life. 

Additional consideration of the Phase I sunken capital costs has been done by depreciating the written down values of 

these assets as at 2012, this has been done to effectively model the Clients tax liability. The company tax rate has been 

assumed to be 15%, as per advice provided by the Client. 

Table 22-1 Jiama Copper-Polymetallic Project – Revenue Assumptions exclusive of VAT 

2012 2013 2014 2015 2016 2017 2018 2019 LT 

Cu USD/lb 3.70 3.60 3.50 3.50 3.42 3.31 3.22 3.10 2.90 

Mo USD/lb 15.11 16.16 16.33 17.00 18.00 18.00 18.00 18.00 18.00 

Zn USD/Metric t 2,113 2,325 2,442 2,485 2,560 2,281 2,220 2,138 2,000 

Pb USD/Metric t 2,198 2,355 2,432 2,461 2,452 2,281 2,220 2,138 2,000 

Au USD/Troy Oz. 1,749 1,798 1,585 1,539 1,475 1,380 1,380 1,380 1,380 

Ag USD/Troy Oz. 34.05 33.86 27.76 23.78 22.91 18.82 18.31 17.64 16.50 

Table 22-2 Jiama Copper-Polymetallic Project – Capital expenditure over the life of mine 

Capital Item 


Processing Plant 221,310 

Open Cut Mining 355,434 

Engineering 76,273 

Loan Interest 27,769 

Mining Camp 24,327 


A Summary of the economic analysis is shown in Table 22-3 for the pre and post-tax amounts with the base case at a 9% 

discount rate showing an internal rate of return (IRR) of 55% and a net cumulative cashflow of USD 1,240M. 

Table 22-3 Jiama Copper-Polymetallic Project – Economic Analysis Results 

NPV ($ billion) 

IRR 

@0% 

@7% 

@9% 

Base Case @11% 

% 

Pre-Tax 4.19 1.80 1.47 1.22 62% 

After-Tax 3.59 1.53 1.24 1.02 55% 

Figure 22-1 shows the cumulative discounted cash flow at 9% to be equal to USD1,240 M. The graph shows that the 

project has negative cash flows in the first 4 years, which is due to the large initial capital expenditure required to upgrade 

of processing plant, mining (particularly waste stripping of the South Pit), engineering and other facilities. However, the 

NPV, becomes positive in 2016 and increases in value from there on. As cash flows further out are discounted heavily, 

there is no great value being added to the NPV as shown by the variations in the pink line plotted in Figure 22-1. 




Cum NPV ($ 000) 

2012 

2013 

2014 

2015 

2016 

2017 

2018 

2019 

2020 

2021 

2022 

2023 

2024 

2025 

2026 

2027 

2028 

2029 

2030 

2031 

2032 

2033 

2034 

2035 

2036 

2037 

2038 

2039 

2040 

2041 

2042 

2043 

Page 115 

MMC estimates that the payback period of this project is equal to approximately 4.5 years. Figure 22-1 shows the 

cumulative NPV of the project. This project is valued to 2043 which, is 1 year after mining finishes, this is to take into 

account any working capital movement adjustments after the project has finished. 

Figure 22-1. Jiama Copper-Polymetallic Project – Base Case NPV Analysis, 9% Discount Factor 

Cumulative NPV 

4,000,000 

3,500,000 

3,000,000 

2,500,000 

2,000,000 

1,500,000 

1,000,000 

500,000 

0 

-500,000 

-1,000,000 

Cumulative NPV @ 9% 

Cumulative Cash Flow 

The projects greatest risk/sensitivities are in relation to the revenue generated from the pits. This includes commodity 

prices, grades and recoveries. Copper is the prime revenue source for the project and therefore profitability relies heavily 

on the Cu price. 

Economic model sensitivity analysis was completed on metal prices for Mo, Cu, Ag, Au and Pb, as well as capital cost 

estimates and operating cost estimates. The results are shown in Table 22-4 (the NPVs are based on a discount factor of 

9%). The results indicate that the Project is most sensitive to variations in metal price, operating costs, grades/recoveries 

and capital costs in that order. Figure 22-2 presents a graphical representation of these findings. 

Table 22-4 Jiama Copper-Polymetallic Project – Project Sensitivity Price Sensitivity (Post-Tax NPV at a 9% 

Discount Factor) 

Applied Variable 

Variation Compared to Base Case Estimates 

-10% 0 10% 

kUSD kUSD kUSD 

Metal Prices 792,031 1,239,861 1,687,630 

Opex 1,615,613 1,239,861 864,052 

Capex 1,286,934 1,239,861 1,192,788 

Grades/Recoveries 788,044 1,239,861 1,692,005 




NPV (kUSD) 

Page 116 

Figure 22-2 Jiama Copper-Polymetallic Project – Economic Sensitivities 

1,800,000 

Sensitivites 

1,600,000 

1,615,613 

1,692,005 

1,400,000 

1,200,000 

1,286,934 

1,239,861 

1,192,788 

1,000,000 

800,000 

788,044 

864,052 

600,000 

400,000 

200,000 

0 

0.9 1 1.1 

Sensitivity 

Metal Prices Opex Capex Grades/Recoveries 




Page 117 

23 ADJACENT PROPERTIES 

The Project is not surrounded by any adjacent mining licences. There are, however, mineral occurrences in the 

surrounding area. The region in which the Project is located contains several major and minor porphyry type deposits. 

These include the Qulong porphyry copper-molybdenum deposit, around 20 km southwest in the Maizhokunggar County 

and the Bangpo Molybdenum copper porphyry deposit, located 30 km north east of the deposit. 

MMC has been unable to verify the information on adjacent properties, and it is not necessarily indicative of the 

mineralisation on the property that is the subject of this Pre-Feasibility Study Technical Report. 




Page 118 

24 OTHER RELEVANT DATA AND INFORMATION 

24.1 PROJECT RISK SUMMARY 

Mining is a relatively high risk business when compared to other industrial and commercial operations. Each deposit has 

unique characteristics and responses during mining and processing, which can never be wholly predicted. MMC’s review 

of the Project indicate risk profiles typical of mining projects at similar levels of Resource estimation, mine planning and 

project development. 

MMC has attempted to classify risks associated with the Project. Risks are ranked as High, Medium or Low, and are 

determined by assessing the perceived consequence of a risk and its likelihood of occurring using the following definitions: 

Consequence of risk: 

 

 

 

Major: the factor poses an immediate danger of a failure, which if uncorrected, will have a material effect (>15% to 

20%) on the project cash flow and performance and could potentially lead to project failure; 

Moderate: the factor, if uncorrected, could have a significant effect (10% to 15% or 20%) on the project cash flow 

and performance unless mitigated by some corrective action, and 

Minor: the factor, if uncorrected, will have little or no effect (

Page 119 

Table 24-2 Jiama Copper-Polymetallic Project – Project Risk Summary 

Risk 

Ranking 

M 

Risk Description and Suggested Further 

Review 

Scheduling 

Ramp up in the early years in the open cut is 

significant with an increase from 15 Mtpa to 43 

Mtpa from 2012 to 2013. Failure to achieve this 

ramp up is likely to lead to a delay in reaching full 

production as access to ore will be limited during 

stripping. 

Mitigation Strategy 

Inferred resources in the upper 

portions of South Pit need to be 

infilled drilled so that they can be 

included in future scheduling of 

reserves. 

A plan to hire in additional 

contractor fleets needs to be 

investigated and costed into 

future mining studies. 

Area of Impact 

Schedule, NPV, Project 

Mine Life 

M 

M 

M 

M 

M 

NPV 

The Project is highly sensitive to variations in 

copper pricing, operating costs, capital 

expenditure, and any delays or variations to the 

forecast production schedule 

Mining Lease 

The current mining lease does not cover proposed 

mining areas or the proposed production rates. 

Geotechnical Studies – Underground 

Further studies should be undertaken to better 

understand the rock mechanics related to the 

underground mine because the Chinese 

Feasibility Study has only been able to make 

qualitative descriptions regarding the stress 

distribution characteristics of rock mass in the rock 

mechanics and general estimations regarding the 

ground surface caving. 

Mo Separation Flotation of Skarn Ore 

Cu-Mo separation flotation for the lower grade Mo 

ores at Mo grade 0.4% in copper concentrate and 

a Mo feed grade of minus 0.015% is not economic 

due to high reagent costs. 

Concentrate Impurities - Arsenic Content 

No impurity assay data for geological samples 

were available; Higher arsenic contents in the 

currently produced copper concentrate (currently 

As 0.4-0.7%) as well as in possible molybdenum 

concentrate (As 0.26%) would impact the 

concentrate payment if marketing conditions 

become more stringent. 

Requirements for additional 

support infrastructure to 

maintain the increased fleet 

need to be determined. 

Detailed mine planning to 

increase the accuracy of the 

current operating cost estimates. 

Further detailed capital 

expenditure studies to increase 

confidence and optimise the 

capital cost estimates 

Further marketing studies 

should be undertaken to 

understand the forecast for the 

metal prices. This will reduce the 

project risk as greater certainty 

around revenue will be 

achieved. 

Apply for extension of mining 

licence to cover all proposed 

mining areas 

Complete: 


Research on rock mass 

strain properties; 

Numerical analysis 

model; 

Photo-elastic simulation; 

 

and 

Ground pressure 

observation and analysis. 

Pilot plant test to identify the 

cut-off grade for producing Mo 

concentrate 

Further benchscale or pilot 

testing to reduce the impurities 

in concentrate 

Mineral Reserve 

estimate 

Project Mine Life 

Overall 

Mine Plan, 

Reserves 

Mo Recoveries and 

Revenue 

Marketing and 

revenue 




Page 120 

L 

L 

Controls on Mineralisation 

Detailed understanding of the mineralisation style 

and controls on mineralisation in these types of 

deposits often rests with identification of the main 

controls and high grade domains within the 

deposit. No close spaced drill holes have been 

completed to confirm the continuity of high grade 

lenses, the larger spacing in some portions of the 

Project results in a lower level of confidence for 

the estimated grade. 

Concentrate Moisture 

Higher concentrate moisture (13%) than design. 

Infill Drilling 

Select proper dewatering 

facilities to reduce the moisture 

Resource and 

Reserves 

Revenue 

L 

L 

High Altitude (4,350-5,400m) 

Higher construction capital cost and operating cost 

as well as slower project development would be 

resulted under such bad weather. Filters do not 

work well at so high altitude. 

Insufficient Dump Areas 

The proposed dumping areas are not sufficient to 

accommodate forecast waste volumes. 

Experience in construction and 

operating at higher altitude 

Company obtain land usage 

permits for within Project area 

Overall 

Mine Plan, 

Reserves 

L 

Geotechnical Studies – Open Cut 

Further geotechnical analysis needs to be 

undertaken for South Pit and Jiaoyan to confirm 

the final pit wall angles. This is particularly 

important because of the proposed depths for 

these pits, which are 495 m and 539 m 

respectively. 

Undertake detailed mine 

planning studies 

Mine Plan, 

Reserves 

L 

L 

Sterilisation of ore under proposed Jiaoyan 

Dump Area 

Sterilisation drilling needs to occur in the areas 

where Jiaoyan’s dump is proposed to be located. 

If potentially economic mineralisation is present in 

this area, then Jiaoyan dump should be relocated. 

Bulk Density 

Limited Bulk Density determinations have been 

completed with some evidence of variation with 

the different litholoigies. 

Sterilisation Drilling 

Complete Bulk Density 

Determinations on future drilling 

and remaining core. 

Mine Plan 

Resource and 

Mining Estimation 




Page 121 

25 INTERPRETATION AND CONCLUSIONS 

25.1 GEOLOGY 

 

 

 

 

The Project represents an extremely large polymetallic project, and has resources of sufficient quality to make the 

current studies economically viable. Measured and Indicated Mineral Resources make up 72.7% of all Mineral 

Resources (at 0.3 g/t Cu eq cut-off grade). 

A Mineral Resource estimate, using an ordinary kriging interpolation method, was completed by MMC of Beijing, 

China. The Mineral Resource estimate in this Technical Report is reported using cut-off grades which are deemed 

appropriate for the style of mineralisation and the likely costs of production. 

MMC considers the estimated Mineral Resources to be compliant with NI 43-101 Guidelines for Resource 

Estimates. Of importance for mine planning, the model accommodates in situ and contact dilution but excludes 

mining dilution. Block size is similar (25 x 25 x 5 meters) to the expected small-mining units conventionally used in 

this type of deposit, and appropriate for the current open pit and the planned underground mining methods. 

Potential for increasing of the Mineral Resources is considered good, with mineralisation open down dip and along 

strike, which requires further drilling to investigate potential. 

25.2 MINING 

Based on the proposed mining plan, the following comments are made: 

 

 

 

 

 

 

 

 

 

 

 

 

A Mineral Reserve estimate was completed by MMC of Beijing, China. The Mineral Reserve estimate in this 

Technical Report is reported by applying modifying factors and using cutoff grades which are deemed appropriate 

for the style of mineralisation, the current state of the Mineral Resources and planned operation. 

MMC considers the estimated Mineral Reserves to be compliant with NI 43-101 Guidelines for Reserve Estimates. 

The review completed by MMC of the draft Chinese Feasibility Study indicated that the mine design parameters 

were appropriate and suitable for the Project and, as a result, formed the basis for the mine design and planning 

that MMC completed. 

In addition to the three open cut pits proposed in the draft Chinese Feasibility Study, MMC identified and completed 

mine planning for a forth open cut pit in the south of the Project area, the South Pit. This pit was identified through 

Whittle optimisation work. 

Open cut and underground mining methods are appropriate for the Project, both in terms of productivity and safety. 

Open cut mining will use conventional trucks and excavator methods to mine the ore, while the underground 

methods consist of variations of open stoping and sublevel caving. Various ore pass and conveyor systems 

underground will be used to transport crushed ore from the open pits and underground to the processing plants. 

Open cut mining is already being used to extract ore from the Project at a rate of 1.8 Mtpa. In 2015, underground 

is forecast to commence. 

MMC considers the planned production rate from the open cut and underground operations of 13.6 Mtpa ROM ore 

over the majority of the mine life to be achievable. During the years in which production is planned to exceed 13.6 

Mtpa, however, MMC considers this achievable based on propose equipment and processing plant capacity. 

Based on the Mineral Reserve estimate, the Project has a mine life of 31 years; however MMC envisages this 

could be extended with further drilling in the South Pit area and further mine planning studies, particularly those 

related to the underground operation. 

During the earlier years of the mine life, mining will focus on Skarn material, but as the mining progresses more 

Hornfels hosted and Porphyry hosted mineralisation will be targeted. The metals that can be extracted from the 

Project are copper, molybdenum, gold, silver, lead and zinc. Copper is the primary economic metal; however Mo, 

Au and Ag have a significant impact on revenue. 

It is forecast that 202.2 Mt of ROM ore will be extracted from the four open cut operations and 161.3 Mt of ROM ore 

from the underground operation for the current LOM. 

The interaction between the open cut and underground operations must be appropriately forecast so as to ensure 

there are no disruptions to mining activities and, more importantly, there are no safety incidences. 




Page 122 

 

 

Currently, the proposed dumping areas are not sufficient to accommodate forecast waste volumes. MMC is, 

however, aware that there is sufficient land within the Project area that the Company could obtain land usage 

permits, which would solve this issue. 

Geotechnical issues are always present for any mining operation. While no high risks have been identified to date, 

ongoing monitoring is required, as well as the completion of additional studies outlined in the Report’s 

Recommendations. 

25.3 PROCESS 

25.3.1 Skarn Cu-Mo Ores 

Based on the review of the processing plant operation and relevant data, the following comments are made: 

 

 

 

 

 

 

 

Cu-Mo separation flotation for the lower grade Mo ores is currently not economic due to high operating costs. The 

cut-off grade for Cu-Mo separation would be at Mo grade 0.4% in copper concentrate or Mo feed grade of 0.015%. 

Higher arsenic contents in the currently produced copper concentrate (0.4-0.7% As) could impact the concentrate 

payment; the company clarified that there is currently no penalty because of the concentrate is well accepted but it 

is near the maximum arsenic content accepted through Chinese sea ports of 0.5% As in concentrate. 

Although the company believes that no significant impurities (apart from arsenic) are present in the deposit, which 

could impact the marketing of products, MMC was unable to confirm this due to the lack of impurity assay data. 

The high moisture of the Cu concentrates (13%), which are dewatered by ceramic filters would present some 

issues in terms handling, acceptance by smelters, as well as increasing transport costs. 

The great variation of the mineralogy of the skarn Cu-Mo ores in terms of grade and hardness are a significant 

potential risk and would result in unstable operational performance, control difficulties and loss in flotation 

recoveries. 

Since there are no smelting facilities in Tibet region, the Project is fortunate that the concentrate transport costs to 

key marketing areas (e.g. Jinchuan Company in Gansu province) are borne by the purchasers at the Project gate. 

A single stage grinding is used to achieve a flotation size of 70% passing 74 microns, which is coarser than the 

testing results (P80= 74 microns). 

25.3.2 Hornfels Hosted Cu-Mo Ores 

Based on the Chinese Feasibility Study and recent testing the following comments can be made: 

 

 

 

Molybdenite is disseminated in widely variable grain sizes and is not related to copper and pyrite minerals, resulting 

in poor Mo recoveries. The locked cycle testing conducted for the Cu-Mo separation achieved a marketable copper 

and Mo concentrate with reasonable recoveries. 

The geological grade of Au and Ag in the hornfels copper concentrate is very low (gold < 0.1 g/t and silver < 1 g/t), 

while modest precious metal recoveries have been found in testwork. The gold (Au 1.14 g/t) and silver (Ag 54 g/t) 

grades in the copper concentrate are payable. 

Further pilot plant testing would be required to confirm the proposed Mo separation circuit for design and 

construction Hornfels hosted Cu-Mo Ores processing facilities. 

25.3.3 Cu-Pb-Zn Ores 

Based on the Chinese Feasibility Study and testing the following comments can be made: 

 

 

Copper-lead-zinc ore contains a variety of divalent sulphide complex and sulphide minerals, which are closely 

associated. The presence of secondary copper sulphide ore and some oxidised ore would have activated lead-zinc 

materials thus resulting in poorer recoveries. 

Some bench scale testing of copper-lead-zinc ores has produced separate copper, lead and zinc concentrates with 

reasonable recoveries, which are considered a reasonable basis for the design of the processing facilities. 

Although the current pilot plant testing, has not confirmed these results due to non-representative samples, it was 

noted that in the previous pilot testing, the tested ores were oxidised and a poor metallurgical performance was 

experienced. Consequently, investigation with a representative fresh sample would be required to understand the 

potential for improvement. 

Further modification of the pilot processing plant is required for it to be operational. 




Page 123 

25.4 ECONOMICS 

 

The operating and capital costs were estimated by the Changsha Institute and were presented in the draft Chinese 

Feasibility Report. MMC has reviewed these cost estimates and considers them to be reasonable and applicable 

to the Project. These costs have been used in the economic analysis completed by MMC. 

The cumulative discounted cash flow at 9% is 1,240 MUSD. The Project has negative cash flows in the first 4.5 

years, which is due to the large initial capital expenditure required to upgrade of the processing plant, mining, 

engineering and other facilities. The NPV becomes positive in 2017 and increases in value from there on. As cash 

flows further out are discounted heavily, there is no great value being added to the NPV. 

 

Economic model sensitivity analysis was completed including Mo, Cu, Ag, Au and Pb metal prices as well as 

capital costs and operating costs. The results indicate that the Project is most sensitive to variations in metal price, 

operating costs, grades/recoveries and capital costs in that order. When considering a 10% variation, the Project 

has an NPV varying from USD 788 M to USD 1,692 M. 




Page 124 

26 RECOMMENDATIONS 

26.1 GEOLOGY 

Infill Drilling 

Complete infill drilling of the South Pit Inferred Resource area to upgrade resource to Indicated. This is likely to facilitate 

the decreased waste mining of the south pit and allow for further optimisation of the mining schedule. 

This drilling as planned by the company is also going to increase the density of data in the underground resource which in 

turn should allow for the improved domaining of high grade zones within the underground resource model. 

It is estimated this work would cost in the order of USD 6-7 M. 

Update Model 

Upon completion of current infill drilling currently underway by the company an update of the resource model model should 

be undertaken to reflect the revised understanding of the controls on mineralisation. This is likely to lead to an increase in 

confidence in the underlying resource classifications. 

It is estimated this work would cost in the order of USD 60-80 k. 

Grade Control 

Incorporation of the grade control blast hole data into the resource model is likely to lead to an improved understanding of 

the short range grade variability of the deposit and associated minerals. MMC recommends that automatic splitting and 

sampling attachments be added to the current blast hole drill rig fleet to improve sampling quality, and that QAQC 

practices in line with international standards be introduces to the assaying so as to allow this dataset to potentially be 

included in future resource estimates. 

26.2 MINING 

Mining licences 

The Company must obtain relevant mining licences to ensure all proposed open cut and underground operations have 

sufficient space and are allowed to operate at planned throughput rates. 

Detailed Mine Planning Studies 

Ongoing optimisation and mine design studies for South Pit and Jiaoyan are required to confirm the further optimise the pit 

designs and equipment selection. Once additional drilling is completed on the South Pit to bring current Inferred Resource 

into at least Indicated a detailed production schedule for the open cut mines should be completed to ensure a reasonably 

constant strip ratio and grade is achieved over mine life thereby ensuring consistent processing plant feed grade and 

tonnes. The underground mine designs require further work to confirm design parameters utilised as there is an 

opportunity to access the underground from the bottom of the South Pit effectively reducing the development capital 

required for the underground. 

These studies will result in a more detailed mine plan with more accurate operating and capital cost estimates. 

Life of mine business planning should be undertaken to optimise sequencing between the mines and to fix an optimum life 

of mine extraction rate. 

It is expected this work would cost in the order of USD 250k and will result in further refinement of the forecast OPEX and 

CAPEX. 

Open Cut and Underground Interactions 

MMC recommends further mine planning studies be undertaken to ensure that the open cut operations and underground 

operation can efficiently and safely operate in tandem. It is expect this work would costs in the order of USD 50k. 




Page 125 

Working Room 

Due to numerous loaders being used to mine approximately 6.0 Mt of ROM ore per year from the open pits, detailed 

production schedules should be conducted to ensure sufficient working room is maintained throughout each pit’s mine life. 

Working room is the area required for all operating equipment to function while maintaining forecast production rates. 

Detailed scheduling work is on-going at site. 

Geotechnical 

Stability of the pit walls will be crucial to enable the pits to achieve their design depths of over 300 m. Monitoring of the pit 

walls should be routine practice to ensure safety of the workers. It is estimated this work would costs in the order of USD 

50k to implement the system per pit and USD 10k per annum to review data and report findings for all pits. 

MMC recommends further geotechnical analysis be undertaken for South Pit and Jiaoyan, as only high level mine 

planning has been completed for these two areas. Specifically, pit slopes for South Pit and Jiaoyan should be better 

defined with detailed geotechnical studies undertaken. 

Additionally, due to the proposed operation of South Pit, the location of the South Haulage Shaft should undergo reexamination 

to ensure it can be safely and productively operated. 

Further studies should be undertaken to better understand the rock mechanics related to the underground mine because 

the Chinese Feasibility Study has only been able to make qualitative descriptions regarding the stress distribution 

characteristics of rock mass in the rock mechanics and general estimations regarding the ground surface caving. MMC 

recommends the following additional geotechnical work including: 

 

 

 

 

 


Research on rock mass strain properties; 

Numerical analysis model; 

Photo-elastic simulation; and 

Ground pressure observation and analysis. 

It is estimated this work would costs in the order of USD 250-300k excluding drilling if deemed necessary. 

Sterilisation Drilling 

MMC recommends sterilisation drilling takes place where the proposed Jiaoyan dump is located, as presented in Figure 

16-1. This is required to ensure that no valuable mineralisation occurs below this area before dumping on surface takes 

place. If mineralisation showing economic potential is found, then Jiaoyan dump may need to be relocated. 

It is estimated this work would costs in the order of USD 700 - 900k. 

26.3 PROCESSING 

The main recommendations concern the testing of Skarn ores to determine the molybdenum and precious metal 

recoveries. 

MMC was informed that detailed testing was underway however the details were not available for review. It is assumed 

that on-going process metallurgy testing would focus on: 

 

 

 

 

 

Regular testwork to optimise process performance, the nature of plant operation and the potential for operational 

and process improvements; 

Further testing especially on the Hornfels hosted Cu-Mo ore as well as samples from the deep ore bodies. A pilot 

plant testing for Cu-Mo separation has been planned for June, 2012; 

Conduct testwork aimed at lowering the arsenic content of Skarn concentrates as well as confirming the potential to 

produce marketable molybdenum concentrates; 

Conduct testwork to establish copper and molybdenum feed grade–recovery relationships for hornfels ores and 

confirm the metallurgy of molybdenum, gold and silver; 

Lowering the moisture content of the concentrates; 




Page 126 

 

 

Future studies would be required due to feed variability for the processing of some ores with molybdenum greater 

than 0.02% Mo. The further Cu-Mo separation flotation test needs to determine the suitability of reagent and Mo 

cut-off grades for processing lower grade Mo ores; and 

Blending of the two Cu-Mo ore types may be required to maximise the revenue for the operation and this needs to 

be investigated in terms of the ratio of the ore types as well as the recovery-feed grade relationship. 

MMC recommends that the nature and the number of the ore types present in each deposit is established, built into the 

resource block model and thus populated into the proposed mining schedule. In this way, the nature of the ore types and 

composites for each deposit can be more accurately determined before more testing is undertaken. 

For inclusion into the resource model block, each ore type or lithology will need to have a number of identifying process 

characteristics which will come from the testwork results, such as feed grades (Cu, Mo, Au, Ag, Pb, Zn), concentrate 

grades, recoveries (preferably as a function of grade), grind size and hardness (comminution properties). 

The testwork needs to establish all the metal recoveries and concentrate grades as a function of feed grade, ore type and 

mineralogy. MMC understands that the company has established a copper recovery-feed grade relationship for Skarn ore 

type based on available testing data and historical operational data, however this needs to be undertaken for copper for 

the other ore types and for molybdenum for all ore types. 

It is expected that all this work would cost in the order of USD 100 - 150k. 

26.4 COSTS/ECONOMIC ANALSYSIS 

Marketing Studies 

Further marketing studies should be undertaken to understand the forecast for the metal prices. This will reduce the 

Project risk as greater certainty around revenue will be achieved. It is expect this work would costs in the order of USD 50 

- 80k. 

Refinement of Operating and Capital Costs 

On completion of further mining and processing studies, update operating and capital cost forecasts, and review its impact 

on the Project value. It is expect this work would cost USD 40k. 




Page 127 

27 REFERENCES 

“Resource Update Report on the Jiama Copper Polymetallic Project in Metrorkongka County, Tibet Autonomous Region, 

The People’s Republic of China”. NI 43-101 Technical Report, March 2012, Behre Dolbear Asia Incorporated. 

“Canadian Institute of Mining, Metallurgy and Petroleum, CIM Standards on Mineral Resource and Mineral Reserves – 

Definitions and Guidelines” adopted by CIM Counsel on December 11, 2005. 

“Jiama Copper-Polymetallic Project Phase II Feasibility Study Report”. October 2011, Changchun Gold Design Institute 

and Changsha Nonferrous Metals Design & Research Institute) – DRAFT, completed by Changchun Gold Design Institute 

“Grinding Process Analysis Report for Jiama Copper Polymetallic Ore”, compiled by CITIC Heavy Machinery Limited by 

Share Ltd in 2011 

“Metallurgy Testing Report for Low-grade Hornfels Cu-Mo Ore Flotation Test Study” compiled by Northwest Research 

Institute of Mining and Metallurgy in November, 2011 

“Resource Update Report for the Jiama Copper-Polymetallic Project in Metrorkongka County, Tibet Autonomous Region, 

People’s Republic of China” compiled by Behre Dolbear Asia Incorporated October, 2011 

“Metallurgical Testing Report for Tibet Jiama Cu-Pb-Zn Polymetallic Ore by Bulk Flotation”, compiled by Huatailong Mining 

Development Company Limited Internal Testing Laboratory in April, 2011 

“The Quality Administration Standards for Analysis in Geological and Mineral Resource Laboratories” (DZ0130-94) 

promulgated by the former Ministry of Geology and Mineral Resources of China 

“Report for Pilot Study of Beneficiation of Tibet Jiama Cu-Mo Ore” compiled by Changchun Gold Research Institute in 

2011 

“Report for Recovery of Tibet Jiama Cu-Pb-Zn Polymetallic Ore by Differential Flotation” compiled by Huatailong Mining 

Development Company Limited Internal Testing Laboratory in November, 2011 

“Report for Site Duplicate Testing of Jiama Cu-Pb-Zn Polymetallic Ore”, compiled by Beijing Research Institute of Mining 

and Metallurgy in April, 2011 

“Report for Verification Differential Flotation Testing of Jiama Cu-Mo Ore”, compiled by Northwest Research Institute of 

Mining and Metallurgy in April, 2011 

“Report for Verification of Metallurgical Testing of Tibet Jiama Cu-Mo Ore by Bulk Flotation”, compiled by Huatailong 

Mining Development Company Limited Internal Testing Laboratory in April, 2011 

“Metallurgy Testing Report for Jiama Cu-Pb-Zn-Ag-Mo Polymetallic Ore”, compiled by Hunan Huazhong Mining Co.,Ltd & 

Lasha Weizuo Assaying and Testing Co.,Ltd in May, 2010 

“Jiama Copper-Polymetallic Project Phase I Feasibility Study Report”. December 2009, Changsha Nonferrous Metals 

Design & Research Institute. 

“Metallurgy Testing Report for Beneficiation of Tibet Jiama Cu-Mo Ore” compiled by Changchun Gold Research Institute in 

2009 

“Core Drilling Regulation” promulgated by the former Ministry of Geology and Mineral Resources of China 




Page 128 

28 ANNEXURE A – QUALIFICATIONS AND EXPERIENCE 

Philippe Baudry – Regional General Manager – Asia - Russia, Bsc. Mineral Exploration and Mining Geology, 

Assoc Dip Geo science, Grad Cert Geostatistics, MAIG 

Philippe is a geologist with over 15 years of experience. He has worked as a consultant geologist for over 7 years first with 

Resource Evaluations and subsequently with Runge after they acquired the ResEval group in 2008. During this time 

Philippe has worked extensively in Russia assisting with the development of 2 large scale copper porphyry projects from 

exploration to feasibility level, as well as carrying out due diligence studies on metalliferous projects throughout Russia. 

His work in Australia has included resource estimates for BHPB, St Barbara Mines and many other clients both in 

Australia and overseas on most styles of mineralisation and metals. Philippe furthered his modelling and geostatistic skills 

in 2008 by completing a Post Graduate Certificate in Geostatistics at Edith Cowan University. Philippe relocated to China 

in 2008 and has since project managed numerous Due Diligences and Independent Technical Reviews for private 

acquisitions and IPO listings purpose mostly in China and Mongolia. 

Prior to working has a consultant Philippe spent 7 years working in the Western Australian Goldfields in various positions 

from mine geologist in a large scale open cut gold mine through to Senior Underground Geologist. Before this time 

Philippe worked as a contractor on early stage gold and metal exploration projects in central and northern Australia. 

With relevant experience in a wide range of commodity and deposit types, Philippe meets the requirements for Qualified 

Person for 43-101 reporting, and Competent Person (“CP”) for JORC reporting for most metalliferous Mineral Resources. 

Philippe is a member of the Australian Institute of Geoscientists. 

Jeremy Clark – Senior Consultant Geologist – China-USA, Bsc. with Honours in Applied Geology, Grad Cert 

Geostatistics, MAIG 

Jeremy has over 9 years of experience working in the mining industry. During this time he has been responsible for the 

planning, implementation and supervision of various exploration programs, open pit and underground production duties, 

detailed structural and geological mapping and logging and a wide range of experience in resource estimation techniques. 

Jeremy’s wide range of experience within various mining operations in Australia and recent experience working in South 

and North America gives him an excellent practical and theoretical basis for resource estimation of various metalliferous 

deposits including iron ore and extensive experience in reporting resource under the recommendations of the NI-43-101 

reporting code. 

With relevant experience in a wide range of commodity and deposit types, Jeremy meets the requirements for Qualified 

Person for 43-101 reporting, and Competent Person (“CP”) for JORC reporting for most metalliferous Mineral Resources. 

Jeremy is a member of the Australian Institute of Geoscientists. 

Mark Burdett – Senior Consultant Geologist (China) - Bachelor of Science (Honours) - Geology, University of 

Melbourne 

Mark is a geologist with over 10 years of experience in the Australian mining industry. After gaining experience in mine 

geology, Mark entered into various resource geologist roles. 

In recent years Mark worked for Oz Minerals as the Senior Resource Geologist and was responsible for updating the 

Prominent Hill Resource (IOCG) including the management of infill and extensional drilling programs. Prior to this Mark 

worked as a resource geologist on various deposits including iron, gold and lead/zinc. Mark has also worked as a 

mine/project geologist for BHP (Pilbara) and Perilya (Broken Hill). Mark is proficient in Vulcan 3D software and is a 

member of the AUSIMM. 

Andrew Newell - BE, MEngSc, University of Melbourne, PhD, University of Cape Town. Member of the SME, CIMM, 

AusIMM (CP) & IEA as well as a Chartered Professional Engineer, Australasia 

Over 30 years of broad experience in the fields of minerals processing, hydrometallurgy, plant design, process 

engineering (including equipment selection and design) and metallurgical testwork. Andrew has worked on five iron ore 

projects, one involving flotation, and is knowledgeable about iron ore processing techniques such as magnetic separation. 

The experience includes operating and management experience in base-metal concentrators, precious metal leaching 

facilities as well as diamond processing and base-metal smelting in several countries, including Chile, Peru, South Africa, 

USA and Australia. Responsible for the design of flotation equipment, concentrators and commissioning of flotation and 

precious metals leach plants. In addition, Andrew has had experience in process and process plant evaluations, due 

diligence audits, feasibility studies and metallurgical testwork and program development. 

Tony Cameron – Independent Consultant, Bachelor of Engineering(Mining) – University of Queensland, First 

Class Mine Manager (WA), Grad. Diploma. Business - Curtin University, Maters Commercial Law - Melbourne 

University, Fellow of Australasian Institute of Mining and Metallurgy (FAusIMM) 

Tony has worked as a mining engineer for over 20 years and an independent mining engineering consultant for 8 years 

and has been working as an associate in Beijing with MMC for one year. As an independent mining consultant, Tony has 

completed a range of projects including technical valuations, life-of-mine designs and scheduling, pit optimisation, 

development of economic models, mine reserves estimation and reporting. 




Page 129 

Prior to becoming a mining consultant Tony worked with a number of underground and open cut mining companies in coal 

and metalliferous mines in various roles. Tony’s management roles included Area Manager for Macmahon Contractors, 

Mining Manager for Tiwest, and Mining Superintendent for Sons of Gwalia and St Barbara Mines. 

With relevant experience in a wide range of commodity and deposit types, Tony meets the requirements for Qualified 

Person for 43-101 reporting, and Competent Person (“CP”) for JORC reporting for both metalliferous and coal open cut 

Reserves. Tony is a Fellow of the Australian Institute of Mining and Metallurgy. 

Jim Jiang- Senior Processing Consultant, Bachelor and Master of Mineral Processing Engineering (Central South 

University) 

Jim has 9 years of experience in mineral processing with laboratory research, metallurgical test work, plant operation, 

metallurgy and process plant evaluations and pre-feasibility studies on a wide range of commodity types. He has had site 

experience on a copper-gold mine in China, working as processing engineer with China Gold Group Corporation. 

Since joining MMC in 2007, he has been involved on many technical review projects, with his work including pre-feasibility 

studies and reviewing processing plants (feasibility study, plant design and operational performance) in base-metal 

concentrators, precious metal leaching facilities as well as iron processing and base-metal smelting in several countries, 

including China, Mongolia, Malaysia, Russia. 

Giacomo Gaetani – Mining Engineer, Runge Ltd, BEng (Mining), Grad Cert Finance, Member of Australian Institute 

of Mining and Metallurgy 

Giacomo has over five years working experience in both the coal and metals mining industry. He has worked on project 

around the world and has specifically been involved in life-of-mine designs, development of economic models, prefeasibility 

and feasibility studies, technical reviews, technical valuations and mine reserves estimation and reporting. 

Jade Little – Mining Engineer, Runge Ltd, BEng (Mining), Member of the Australian Institute of Mining and 

Metallurgy 

Jade has been exposed to both coal and metals open cut and underground mining operations in Australia, China, India, 

Liberia and Madagascar. She has almost 5 years work experience during which time she has undertaken roles ranging 

from the development of short-term and strategic mine plans, completion of Life of Mine options studies, assisting with the 

generation of mine planning standards for operating sites, generating of JORC Ore Reserve statements as well as 

preparing Independent Technical Reviews. She has worked both onsite at various open cut and underground mines as 

well as assuming consulting roles. Jade has developed skills in the use of Minex, Talpac, Datavis, Split Engineering and 

Ventsim. 

Bob Dennis, Principal Mining Consultant 

Mr. Dennis has 30 years involvement in the mining industries of Australia and in Italy. He has worked in operations 

management, including mining, processing, planning and support services; planned and executed exploration programs 

from grass roots to feasibility study levels; recruited and developed teams; estimated resources using geostatistical 

methods and evaluated prospect and mining opportunities. 

Specific uranium experience includes ongoing due diligence on a large Siberian uranium resource. Bob has reviewed and 

made specific recommendations with respect to the geology, geostatistics, hydrology, environmental studies and the 

interaction between these aspects and the mining and metallurgy. 

Sheng Zhan – Consultant Geologist – PhD in Tectonics, Peking University and Universite d’Orleans; BSc in 

Geology, Peking University 

Sheng has 5 years of working experience in the mining industry. His experiences include data collaboration, 3D modeling, 

block modeling, resource estimation, field technical visits, report drafting and project evaluation of many different mineral 

projects. His commodity experience includes coal, iron ore, gold, copper, nickel, moly, lead, zinc, titanium, tin, uranium 

and rare earth elements. His involvement in mineral projects ranged from green field grass roots level, to pre-production 

level. He has visited more than 30 countries and most provinces in China, stayed in France, Canada, Mongolia, Namibia 

and the Democratic Republic of the Congo for more than 3 months for different mineral projects. 

During his work with Runge from 2010 to the present, Sheng has worked on more than 20 coal, Iron ore, gold, copper, 

nickel, moly, lead, zinc, titanium and tin projects in China, Mongolia and Africa. This work specifically has included 

resource estimation and geological reviews of deposits. These deposits include but are not limited to (as they are 

confidential) one Iron ore project and one Moly project in Mongolia; one Iron ore project in Liberia, west Africa; 5 coal 

projects in Xinjiang, Inner Mongolia, Henan and Shanxi provinces of China; 4 gold projects in Shandong, Heibei, Xinjiang 

and Shaanxi provinces of China; 3 copper projects in Tibet, Shaanxi and Hubei provinces of China; 3 Iron ore projects in 

Shandong, Xinjiang and Sichuan provinces of China; the Shizizan skarn Pb-Zn-Ag deposits in Yunnan province of China 

(China Polymetalic); the Huangjinmei gold deposit and Huaba cupper-vanadium deposit in Shaanxi province of China 

(Huili Resources); the Tonglvshan, Fengshan, Chimashan and Tongshankou cupper deposits in Hubei province of China 

(Daye Non-ferrous) . All of these deposits were estimated in accordance with the JORC Code (Australia, Africa, Europe 

and Asia) or the NI-43-101 code (Canada and South America) and resulted or will be result in Public releases or Technical 

reports. 




Page 130 

Prior to joining Runge Sheng initially worked as a project manager for China Uranium Corporation Ltd and then as a 

department manager for Mongolia International Resources Ltd. During this time he reviewed geology at more than 120 

uranium, gold, rare earth elements and iron ore projects and successful invested 3 of them. He has good knowledge of the 

resources estimation and evaluation of mineral projects as well as the project management. He also served as board 

director of Toronto Stock Exchange listing Western Prospector Group Ltd (WNP.TSX), board secretary of Zhonghe 

Resources Namibia Ltd and board director of Western Prospector Mongolia Ltd (all these 3 companies were owned by 

China Uranium Corporation Ltd at that time). 

Hongbo Liu, Mining Engineer, National Register of Safety Engineers, China University of Mining & Technology 

(Beijing) 

Hongbo Liu graduated with a bachelor degree in mining engineering from Hebei University of Engineering in 2003, was 

granted a master’s degree from China University of Mining and Technology in 2006 and qualified for the National Register 

of Safety Engineers in 2009. 

From 2006 to late 2011, Hongbo was employed at Gemcom Software International Inc. China. He performed in a project 

management and technology support engineer capacity on projects using Surpac and MineSched software training. 

During his work with Runge from 2011 to the present, he has been actively involved in many technical review projects 

including iron, gold copper; and lead mine projects in China and Africa. His work includes data reviewing, open pit 

optimization, open pit and underground mine designing and scheduling. All of his work is in accordance with the JORC 

Code (Australia, Africa, Europe and Asia) or the NI-43-101 code (Canada and South America) and the Hong Kong 

Exchange listing rules. 

Feng Wu – Consultant Geologist – China, BSc in Geology (The China University of Geosciences, 2004) 

Feng is a geologist with 8 years geological experience. He is experienced in field geological work, geological modelling, 

resource estimation and report drafting. Commodity experience includes iron, copper, gold, lateritic deposits, polymetallic 

deposits, as well as non-metallic deposits and petroleum. Relevant project experience as a site geologist include drilling, 

mapping, geochemical and geophysical exploration projects in China, Papua New Ginuea, Zambia, Indonesia and Laos 

from 2004 to 2010. 

Feng has worked in Runge from 2010 to the present, and has had an abundance of work experience in metal and coal 

geological consulting. Feng’s role in projects include data verification and resource review to meet the recommendations 

of the JORC Code. 

Roger Zhi Yao Dong – Graduate Engineer, Bachelor of Engineering (Chemical), Bachelor of Laws - University of 

Melbourne 

Roger graduated from the University of Melbourne in December 2011 with a Bachelor of Engineering (honours) and a 

Bachelor of Laws (honours). He joined Runge Ltd Beijing in 2012 as part of the Australian Chamber of Commerce 

Graduate Scholarship program. He has had experience in industrial processing research and has also interned at a 

number of law firms in Melbourne. 

Peilin Guo – Mining Engineer – BM. (Mining Engineering), China University of Mining & Technology (Beijing) 

Peilin has 8 years of experience working in the domestic and international mining industry, including in underground coal 

operations, open pit nickel laterite operations, and as a consultant in a mining software company. As a consultant, he 

performed geological modelling, resource estimation, mining design and software training for coal, iron, gold, copper, 

limestone and nickel-cobalt projects. Peilin is an expert user of Autocad and Surpac. 

Since joining Runge in 2011, Peilin has worked on more than 10 iron ore, gold, copper, lead, zinc, rare earth and coal 

projects in China, Mongolia and Africa. He has been actively involved in many technical review projects, with his work 

including reviewing and designing. All of his work is in accordance with the JORC Code (Australia, Africa, Europe and 

Asia) or the NI-43-101 code (Canada and South America) and the HKEx (Hong Kong Exchange) Listing Rules. 




Page 131 

29 ANNEXURE B- GLOSSARY 

The key terms used in this report include: 

AAS Atomic Absorption Spectroscopy 

Ai Abrasion index 

AIG Australian Institute of Geoscientists 

ASL Above Sea Level 

ASX Australian Stock Exchange 

BECOG Break-even cut-off grade 

Brigade 6 The No. 6 Geological Brigade of Tibet Geology and mineral Resource Bureau 

BS Bangong Lake-Nu River Suture Zone 

BVI British Virgin Islands 

CNAL Chinese National Accreditation Board for Laboratories 

Company means China Gold International resources Corporation Limited, “China Gold” or “the Client”. 

concentrate a powdery product containing higher concentrations of minerals resulting from initial 

processing of mined ore to remove some waste materials; a concentrate is a semi-finished 

product, which would still be subject to further processing, such as smelting, to effect 

recovery of metal 

contained metal refers to the amount of pure metal equivalent estimated to be contained in the material based 

on the metal grade of the material. 

CPR Competent Person’s Report 

CuEq Copper Equivalent 

DD Surface diamond drill holes 

element Chemical symbols used in this Report 

Au – Gold; Ag – Silver; As – Arsenic; Cu – Copper; Mo – Molybdenum; Na – Sodium; Pb – 

Lead; Zn – Zinc 

exploration activity to identify the location, volume and quality of a mineral occurrence 

 

Exploration 

Target/Results 

includes data and information generated by exploration programmes that may be of use to 

investors. The reporting of such information is common in the early stages of exploration and 

is usually based on limited surface chip sampling, geochemical and geophysical surveys. 

Discussion of target size and type must be expressed so that it cannot be misrepresented as 

an estimate of Mineral Resources or Ore Reserves. 

exploration right the licensed right to identify the location, volume and quality of a mineral occurrence 

Feasibility Study Refers to ‘Jiama Copper-Polymetallic Project Phase 2 Feasibility Study Report’ October 

2011, Changchun Gold Design Institute and Changsha Nonferrous Metals Design and 

Research Institute. 

flotation is a separation method for to the recovery of minerals using reagents to create a froth that 

collects target minerals 

FOT Free on Truck basis 

gangue is a mining term for waste rock 




Page 132 

grade any physical or chemical measurement of the concentration of the material of interest in 

samples or product. The units of measurement should be stated when figures are reported 

grind means to crush, pulverize, or reduce to powder by friction, especially by rubbing between two 

hard surfaces 

HKEx Stock Exchange of Hong Kong 

Huatailong Tibet Huatailong Mining Development Company Limited 

ICP-AES Inductively Coupled Plasma Atomic Emission Spectrometry 

In situ means rock or mineralisation in place in the ground 

In Situ Quantities estimates of total in ground tonnes and grade which meet the requirements of the PRC Code 

or other international codes for reserves but do not meet either NI 43-101 or Joint Ore 

Reserves Committee's recommendations 

 

Indicated Mineral 

Resource 

is that part of a Mineral Resource for which quantity, grade or quality, densities, shape and 

physical characteristics, can be estimated with a level of confidence sufficient to allow the 

appropriate application of technical and economic parameters, to support mine planning and 

evaluation of the economic viability of the deposit. The estimate is based on detailed and 

reliable exploration and testing information gathered through appropriate techniques from 

locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely 

enough for geological and grade continuity to be reasonably assumed. 

Inferred Mineral 

Resource 

is that part of a Mineral Resource for which quantity and grade or quality can be estimated on 

the basis of geological evidence and limited sampling and reasonably assumed, but not 

verified, geological and grade continuity. The estimate is based on limited information and 

sampling gathered through appropriate techniques from locations such as outcrops, trenches, 

pits, workings and drill holes. 

ITR stands for Independent Technical Review 

ITRR stands for Independent Technical Review Report 

JV stands for Joint Venture 

Km stands for kilometre 

Kt stands for thousand tonnes 

Lb stands for pound, a unit of weight equal to 453.592 grams 

m stands for metres 

M stands for million 

MAIG Member of the Australian Institute of Geoscientists 

 

Measured 

Mineral Resource 

is that part of a Mineral Resource for which quantity, grade or quality, densities, shape, and 

physical characteristics are so well established that they can be estimated with confidence 

sufficient to allow the appropriate application of technical and economic parameters, to 

support production planning and evaluation of the economic viability of the deposit. The 

estimate is based on detailed and reliable exploration, sampling and testing information 

gathered through appropriate techniques from locations such as outcrops, trenches, pits, 

workings and drill holes that are spaced closely enough to confirm both geological and grade 

continuity. 

metallurgy Physical and/or chemical separation of constituents of interest from a larger mass of material. 

Methods employed to prepare a final marketable product from material as mined. Examples 

include screening, flotation, magnetic separation, leaching, washing, roasting etc. 




Page 133 

mine production is the total raw production from any particular mine 

 

Mineable 

Quantities 

Estimates of in ground tonnes and grades which are recoverable by mining 

Mineral Reserves is the economically mineable part of a Measured or Indicated Mineral Resource 

demonstrated by at least a Preliminary Feasibility Study. This Study must include adequate 

information on mining, processing, metallurgical, economic and other relevant factors that 

demonstrate, at the time of reporting, that economic extraction can be justified. A Mineral 

Reserve includes diluting materials and allowances for losses that may occur when the 

material is mined. 

mineral right for purposes of this Prospectus, mineral right includes exploration right, mining right, and 

leasehold exploration or mining right 

mineralisation any single mineral or combination of minerals occurring in a mass, or deposit, of economic 

interest. The term is intended to cover all forms in which mineralisation might occur, whether 

by class of deposit, mode of occurrence, genesis or composition 

mining rights means the rights to mine mineral resources and obtain mineral products in areas where 

mining activities are licensed 

MMC refers to Minarco-MineConsult 

mRL means meters above sea level 

MSO Datamine Mineable Stope Optimiser software 

Mt stands for million tonnes 

Mtpa means million tonnes per annum 

NI 43-101 National Instrument 43-101 

NPV Net Present Value 

OC open cut mining which is mining from a pit open to surface and usually carried out by 

stripping of overburden materials 

OK Ordinary Kriging algorithm 

Ore is the portion of a reserve from which a metal or valuable mineral can be extracted profitably 

under current or immediately foreseeable economic conditions 

ore processing is the process through which physical or chemical properties, such as density, surface 

reactivity, magnetism and colour, are utilized to separate and capture the useful components 

of ore, which are then concentrated or purified by means of flotation, magnetic selection, 

electric selection, physical selection, chemical selection, reselection, and combined methods 

ore selection the process used during mining to separate valuable ore from waste material or barren rock 

residue 

ore t stands for ore tonne 

Oz Stands for troy ounces or 31.10348g 

 

preliminary 

feasibility study 

primary mineral 

deposits 

is a comprehensive study of the viability of a mineral project that has advanced to a stage 

where the mining method, in the case of underground mining, or the pit configuration, in the 

case of an open pit, has been established and an effective method of mineral processing has 

been determined, and includes a financial analysis based on reasonable assumptions of 

technical, engineering, legal, operating, economic, social, and environmental factors and the 

evaluation of other relevant factors which are sufficient for a Qualified Person, acting 

reasonably, to determine if all or part of the Mineral Resource may be classified as a Mineral 

Reserve. 

are mineral deposits formed directly from magmas or hydrothermal processes 




Page 134 

 

Probable Mineral 

Reserve 

is the economically mineable part of an Indicated and, in some circumstances, a Measured 

Mineral Resource demonstrated by at least a Preliminary Feasibility Study. This Study must 

include adequate information on mining, processing, metallurgical, economic, and other 

relevant factors that demonstrate, at the time of reporting, that economic extraction can be 

justified. 

project means a deposit which is in the pre-operating phase of development and, subject to capital 

investment, feasibility investigations, statutory and management approvals and business 

considerations, may be commissioned as a mine 

Projects Refers to the Jiama Copper-Gold project 

Proven Mineral 

Reserve 

is the economically mineable part of a Measured Mineral Resource demonstrated by at least 

a Preliminary Feasibility Study. This Study must include adequate information on mining, 

processing, metallurgical, economic, and other relevant factors that demonstrate, at the time 

of reporting, that economic extraction is justified. 

QAQC Quality Assurance and Quality Control 

QP Qualified Person 

raw ore is ore that has been mined and crushed in an in-pit crusher, but has not been processed 

further 

RAL Runge Asia Limited 

recovery The percentage of material of initial interest that is extracted during mining and/or processing. 

A measure of mining or processing efficiency 

reserves the [economically] mineable part of a Measured and/or Indicated Mineral Resource, including 

diluting materials and allowances for losses which may occur when the material is mined 

resources a concentration or occurrence of a material of intrinsic economic interest in or on the earth's 

crust in such form, quality and quantity such that there are reasonable prospects for eventual 

economic extraction 

Resources Resources which have been estimated in accordance with the recommendations of the 

guidelines provided in the JORC or NI 43-101 Standards of Disclosure for Mineral Projects. 

RL means Reduced Level, an elevation above sea level 

RMB stands for Chinese Renminbi Currency Unit; 

RMB/t stands for Chinese Renminbi per material tonne 

ROM stands for run-of-mine, being material as mined before beneficiation 

SECOG Stope evaluation cut-off grade 

 

secondary 

mineral deposits 

are mineral deposits formed or modified as a result of weathering or erosion of primary 

mineral deposits 

shaft a vertical excavation from the surface to provide access to the underground mine workings 

SLC Sublevel caving 

SLOS Sub-level open stoping 

SOCOG Stope only cut-off grade 

 

Southwest 

Center 

Southwestern Metallurgic Geology Analytical Center, Chengdu, Sichuan Province 

sq.km square Kilometre 

t stands for tonne 




Page 135 

t/bcm stands for tonnes per bank cubic metre (i.e. tonnes in situ) a unit of density 

the Team MMC’s technical team 

Technical Report Refers to the Pre-Feasibility Study Technical Report on the Preliminary Economic 

Assessment and Resource Estimate for the Jiama Project 

tonnage An expression of the amount of material of interest irrespective of the units of measurement 

(which should be stated when figures are reported) 

tonne refers to metric tonne 

tpa stands for tonnes per annum 

tpd stands for tonnes per day 

TSF Tailings Storage Facility 

TSX Toronto Stock Exchange 

UG underground mining which is an opening in the earth accessed via shafts, declines or adits 

below the land surface to extract minerals 

upgrade ratio is a processing factor meaning ROM Grade% / Product Grade % 

UCS Unconfined compressive strength 

USD stands for United States dollars 

VAT Value Added Tax 

YS Yalung Tsangpo Suture Zone 

$ refers to United States dollar currency Unit 




Page 136 

30 ANNEXURE C – BASE CASE ECONOMIC MODEL 

Table 30-1 Jiama Copper-Polymetallic Project –Economic Modelling Input Recoveries by Ore Type 

Product Ore Types MMC Recovery (%) 

Cu-Mo ore 

Skarn Type 

Cu Conc Cu 88 

Au(g/t) 45 

Ag(g/t) 65 

Mo Conc Mo 70 

Hornfels/Porphyry Type 

Cu Conc Cu 84 

Mo Conc Mo 48 

Cu-Pb-Zn Ore 

Skarn Type 

Cu Conc Cu 88 

Au(g/t) 45 

Ag(g/t) 60 

Pb Conc Pb 88 

Zn Conc Zn 75 




Page 137 

Table 30-2 Jiama Copper-Polymetallic Project –Base Case Economic Modelling Results (Post-Tax) 

NET PRESENT VALUE 

Model Type Combined China Gold Project 

ITEM RATE UNITS Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Y9 Y10 Y11 Y12 Y13 Y14 Y15 Y16 Y17 Y18 Y19 Y20 Y21 Y22 Y23 Y24 Y25 Y26 Y27 Y28 Y29 Y30 Y31 Y32 Totals/ 

Jul 2012 Jul 2013 Jul 2014 Jul 2015 Jul 2016 Jul 2017 Jul 2018 Jul 2019 Jul 2020 Jul 2021 Jul 2022 Jul 2023 Jul 2024 Jul 2025 Jul 2026 Jul 2027 Jul 2028 Jul 2029 Jul 2030 Jul 2031 Jul 2032 Jul 2033 Jul 2034 Jul 2035 Jul 2036 Jul 2037 Jul 2038 Jul 2039 Jul 2040 Jul 2041 Jul 2042 Jul 2043 

QUANTITIES 

Development Metres m 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 

ROM Production ROM t 1,800 1,801 5,980 11,962 14,731 13,409 13,576 13,515 14,317 12,300 13,600 13,100 13,600 13,600 13,600 13,600 13,600 13,600 13,600 13,600 13,600 13,600 13,600 13,600 13,591 13,600 13,600 13,600 9,917 4,152 2,871 0 361,751 

PROFIT & LOSS 

Total Revenue (real) kUSD 109,610 77,450 459,575 763,431 1,455,008 996,692 1,068,126 1,099,851 654,728 553,622 585,777 568,221 569,719 562,949 557,467 544,502 544,940 567,699 552,072 559,253 550,870 548,549 549,334 552,668 786,391 488,911 466,879 460,090 359,112 234,832 147,623 0 17,995,952 

less Operating Costs (real) kUSD 83,304 142,842 321,562 492,974 705,181 606,726 630,625 621,141 529,518 465,595 462,084 441,966 442,315 433,140 431,377 434,150 437,970 435,940 430,786 433,094 434,440 439,036 435,071 439,116 484,633 417,681 415,650 415,008 310,968 168,542 112,191 0 13,054,627 

less Salvage Balancing Adjustment (real) kUSD 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 

Profit Before Depreciation (real) kUSD 26,306 -65,392 138,013 270,458 749,827 389,965 437,500 478,710 125,210 88,027 123,693 126,255 127,404 129,809 126,090 110,352 106,970 131,759 121,285 126,159 116,430 109,514 114,263 113,551 301,758 71,230 51,230 45,082 48,144 66,291 35,432 0 4,941,325 

less Depreciation Allow ance (Phase II) (real) kUSD 0 17,571 74,132 93,256 93,256 89,979 40,022 34,321 43,755 43,352 37,198 25,699 16,265 16,265 16,265 15,352 15,352 1,461 1,012 708 708 708 708 0 0 0 0 0 0 0 0 0 677,344 

less Depreciation Allow ance (Phase I) (real) kUSD 15,615 15,615 15,615 15,615 15,615 15,615 15,615 15,615 8,784 8,784 8,784 8,784 8,784 8,784 8,784 8,784 8,784 8,784 8,784 8,784 1,809 1,809 1,809 1,809 1,809 1,809 1,809 1,809 1,809 1,809 0 0 248,418 

Profit Before Tax (real) kUSD 10,691 -98,578 48,266 161,587 640,957 284,371 381,863 428,774 72,671 35,891 77,712 91,772 102,356 104,761 101,042 86,216 82,834 121,514 111,490 116,667 113,913 106,997 111,746 111,742 299,949 69,421 49,421 43,273 46,335 64,482 35,432 0 4,015,563 

losses carried forw ard (real) kUSD 0 0 -98,578 -50,312 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 -148,890 

Tax Rate % 15% 15% 15% 15% 15% 15% 15% 15% 15% 15% 15% 15% 15% 15% 15% 15% 15% 15% 15% 15% 15% 15% 15% 15% 15% 15% 15% 15% 15% 15% 15% 15% 

Tax Payable (real) kUSD 1,604 0 0 16,691 96,143 42,656 57,279 64,316 10,901 5,384 11,657 13,766 15,353 15,714 15,156 12,932 12,425 18,227 16,723 17,500 17,087 16,049 16,762 16,761 44,992 10,413 7,413 6,491 6,950 9,672 5,315 0 602,334 

Profit After Tax (real) kUSD 9,087 -98,578 48,266 144,896 544,813 241,715 324,583 364,458 61,770 30,508 66,055 78,006 87,003 89,047 85,885 73,283 70,409 103,287 94,766 99,167 96,826 90,947 94,984 94,981 254,957 59,008 42,008 36,782 39,385 54,809 30,117 0 3,413,229 

CASH FLOW 

Profit Before Depreciation (real) kUSD 26,306 -65,392 138,013 270,458 749,827 389,965 437,500 478,710 125,210 88,027 123,693 126,255 127,404 129,809 126,090 110,352 106,970 131,759 121,285 126,159 116,430 109,514 114,263 113,551 301,758 71,230 51,230 45,082 48,144 66,291 35,432 0 4,941,325 

less Tax Payable (real) kUSD 1,604 0 0 16,691 96,143 42,656 57,279 64,316 10,901 5,384 11,657 13,766 15,353 15,714 15,156 12,932 12,425 18,227 16,723 17,500 17,087 16,049 16,762 16,761 44,992 10,413 7,413 6,491 6,950 9,672 5,315 0 602,334 

less Working Capital Movement (real) kUSD 6,408 4,580 13,748 13,186 16,324 -7,573 1,838 -730 -7,048 -4,917 -270 -1,548 27 -706 -136 213 294 -156 -396 177 104 354 -305 311 3,501 -5,150 -156 -49 -8,003 -10,956 -4,335 -8,630 0 

less Capital (Phase 2) (real) kUSD 0 241,322 265,177 98,177 0 0 0 59,533 40,903 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 705,113 

plus Salvage Values (real) kUSD 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 

Net Cash Flow (real) kUSD 18,294 -311,294 -140,912 142,404 637,360 354,883 378,382 355,590 80,454 87,560 112,306 114,036 112,024 114,801 111,069 97,206 94,251 113,688 104,958 108,481 99,240 93,111 97,806 96,479 253,264 65,967 43,973 38,640 49,197 67,574 34,452 8,630 3,633,878 

Cumulative Cash Flow (real) kUSD 18,294 -293,000 -433,912 -291,508 345,852 700,736 1,079,118 1,434,708 1,515,163 1,602,723 1,715,029 1,829,066 1,941,090 2,055,891 2,166,960 2,264,166 2,358,418 2,472,105 2,577,064 2,685,545 2,784,785 2,877,895 2,975,702 3,072,181 3,325,445 3,391,412 3,435,384 3,474,024 3,523,221 3,590,796 3,625,248 3,633,878 

Discount Factor at 7.0% 1.00 0.93 0.87 0.82 0.76 0.71 0.67 0.62 0.58 0.54 0.51 0.48 0.44 0.41 0.39 0.36 0.34 0.32 0.30 0.28 0.26 0.24 0.23 0.21 0.20 0.18 0.17 0.16 0.15 0.14 0.13 0.12 0.11 

Present Value of Cashflow 17,097 -271,896 -115,027 108,640 454,429 236,474 235,638 206,957 43,762 44,511 53,356 50,634 46,486 44,522 40,257 32,927 29,838 33,636 29,022 28,034 23,968 21,016 20,632 19,020 46,664 11,359 7,077 5,812 6,915 8,877 4,230 990 1,525,854 

Cumulative NPV @ 7% 17,097 -254,799 -369,825 -261,186 193,243 429,717 665,355 872,311 916,073 960,584 1,013,940 1,064,574 1,111,060 1,155,582 1,195,838 1,228,765 1,258,603 1,292,239 1,321,261 1,349,295 1,373,262 1,394,279 1,414,910 1,433,931 1,480,595 1,491,954 1,499,030 1,504,842 1,511,757 1,520,634 1,524,864 1,525,854 



Cumulative NPV @ 9% 16,784 -245,226 -354,036 -253,154 161,087 372,692 579,680 758,139 795,182 832,169 875,691 916,235 952,775 987,129 1,017,622 1,042,105 1,063,884 1,087,985 1,108,398 1,127,755 1,144,000 1,157,984 1,171,459 1,183,655 1,213,025 1,220,044 1,224,336 1,227,796 1,231,838 1,236,931 1,239,313 1,239,861 



Cumulative NPV @ 11% 16,481 -236,172 -339,206 -245,400 132,843 322,578 504,829 659,129 690,580 721,418 757,051 789,647 818,495 845,128 868,342 886,645 902,633 920,007 934,458 947,913 959,002 968,376 977,246 985,129 1,003,771 1,008,146 1,010,773 1,012,852 1,015,238 1,018,190 1,019,545 1,019,851 

IRR (Real) % 55% 

NPV (Real) kUSD 7.0% 1,525,854 9.0% 1,239,861 11.0% 1,019,851 


This Report has been prepared for the sole use of China Gold and must be read in its entirety and is subject to the third party disclaimer clauses contained in the body of this Report.

Page 138 

Table 30-3 Jiama Copper-Polymetallic Project –Base Case Mining Schedule Summary 

Schedule Summary 

China Gold Project 

ITEM RATE UNITS Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Y9 Y10 Y11 Y12 Y13 Y14 Y15 Y16 Y17 Y18 Y19 Y20 Y21 Y22 Y23 Y24 Y25 Y26 Y27 Y28 Y29 Y30 Y31 Totals/ 

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 Ave 

OC QUANTITY SCHEDULES - Niumantang 

Ore Production ROM kt 900 0 1,850 0 193 4,309 976 7,100 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 15,328 

Waste Removal kt 9,930 0 724 0 33,000 44,000 1,217 53,099 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 149,710 

Strip Ratio - Uncovered kt/ROM t 11.03 0.00 0.39 0.00 170.70 10.21 4.41 6.81 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 8.34 

Ore Grades 

Copper Grade (%) % 0.90% 0.00% 1.88% 0.00% 0.82% 1.12% 0.80% 1.21% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 

Molybdenum Grade (%) % 0.04% 0.00% 0.01% 0.00% 0.01% 0.07% 0.01% 0.04% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 

Zinc Grade (%) % 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 

Lead Grade (%) % 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 

Gold Grade (g/t) g/t 0.32 0.00 0.80 0.00 0.24 0.55 0.25 0.58 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 

Silver Grade (g/t) g/t 20.49 0.00 35.03 0.00 16.04 23.42 17.08 26.02 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 25.36 

OC QUANTITY SCHEDULES - Tongqianshan 

Ore Production ROM kt 900 1,440 292 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 17,961 

Waste Removal kt 5,385 3,031 480 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 149,710 


Ore Grades 

Copper Grade (%) % 0.56% 0.55% 0.71% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 


Zinc Grade (%) % 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 

Lead Grade (%) % 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 



OC QUANTITY SCHEDULES - South Pit 

Ore Production ROM kt 0 361 3,238 9,662 9,737 4,300 7,800 1,615 1,517 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 38,231 

Waste Removal kt 0 39,979 55,000 50,000 14,600 11,797 58,463 1,537 1,949 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 233,346 


Ore Grades 

Copper Grade (%) % 0.00% 0.43% 0.49% 0.66% 1.43% 0.54% 1.11% 0.57% 0.92% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 


Zinc Grade (%) % 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 

Lead Grade (%) % 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 



OC QUANTITY SCHEDULES - Jiaoyan 

Ore Production ROM kt 0 0 0 0 0 0 0 0 7,500 7,000 8,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 4,517 0 0 146,017 

Waste Removal kt 0 0 0 0 0 0 0 0 42,472 42,100 23,138 15,840 9,685 4,680 4,318 7,743 10,133 6,006 4,653 4,598 6,274 9,526 6,873 8,751 6,778 2,728 3,314 3,148 1,815 0 0 224,631 


Ore Grades 

Copper Grade (%) % 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.37% 0.41% 0.44% 0.44% 0.41% 0.40% 0.38% 0.39% 0.41% 0.45% 0.42% 0.44% 0.43% 0.42% 0.42% 0.41% 0.47% 0.48% 0.41% 0.41% 0.38% 0.00% 0.00% 


Zinc Grade (%) % 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 

Lead Grade (%) % 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 



OC QUANTITY SCHEDULES - Total 

Ore Production ROM kt 1,800 1,801 5,380 9,662 9,931 8,609 8,776 8,715 9,017 7,000 8,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 4,517 0 0 202,208 

Waste Removal kt 15,315 43,010 56,204 50,000 47,600 55,797 59,680 54,636 44,421 42,100 23,138 15,840 9,685 4,680 4,318 7,743 10,133 6,006 4,653 4,598 6,274 9,526 6,873 8,751 6,778 2,728 3,314 3,148 1,815 0 0 607,687 


UG ORE PRODUCTION 

Underground North ROM kt 0 0 600 2,300 4,800 4,800 4,800 4,800 5,300 5,300 5,300 5,400 5,400 5,400 5,400 5,400 5,400 5,400 5,400 5,400 5,400 5,400 5,400 5,400 4,480 3,000 3,000 3,000 3,000 3,000 1,719 129,399 

Ore Grades 

Copper Grade (%) % 0.00% 0.00% 1.42% 1.57% 1.26% 1.26% 1.26% 1.26% 1.25% 1.18% 1.15% 1.10% 1.07% 1.04% 1.04% 1.04% 1.04% 1.04% 1.02% 1.04% 1.04% 1.04% 1.04% 1.03% 1.01% 1.03% 1.03% 1.03% 1.03% 1.03% 1.03% 


Zinc Grade (%) % 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 

Lead Grade (%) % 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 


Silver Grade (g/t) g/t 0.00 0.00 28.00 31.78 22.61 22.61 22.61 22.61 21.85 22.12 21.54 21.65 21.69 21.71 21.71 21.71 21.71 21.71 20.86 19.39 19.26 19.26 19.26 17.68 16.79 17.80 17.80 17.80 17.80 17.80 17.80 

Underground South ROM kt 0 0 0 0 0 0 0 0 0 0 300 700 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 2,111 3,600 3,600 3,600 2,400 1,152 1,152 31,864 

Ore Grades 

Copper Grade (%) % 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.66% 0.83% 0.93% 1.07% 1.13% 0.76% 0.63% 0.65% 0.65% 0.65% 0.54% 0.53% 0.53% 0.58% 0.58% 0.60% 0.62% 0.60% 0.58% 0.58% 0.58% 


Zinc Grade (%) % 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.38% 0.30% 0.38% 0.38% 0.38% 0.38% 0.38% 0.38% 0.38% 0.38% 0.38% 0.38% 0.38% 0.38% 0.18% 0.09% 0.09% 0.09% 0.15% 0.16% 0.16% 

Lead Grade (%) % 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.50% 0.40% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 0.23% 0.13% 0.13% 0.13% 0.20% 0.21% 0.21% 

Gold Grade (g/t) g/t 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.03 0.05 0.10 0.15 0.16 0.08 0.05 0.08 0.08 0.08 0.08 0.08 0.08 0.16 0.16 0.16 0.11 0.06 0.00 0.36% 0.36% 

Silver Grade (g/t) g/t 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 7.02 6.63 7.69 9.56 10.38 13.04 14.64 20.94 20.94 20.94 10.27 9.93 9.93 17.86 17.95 15.21 7.35 3.86 0.36 36.41% 36.41% 

Total ROM kt 0 0 600 2,300 4,800 4,800 4,800 4,800 5,300 5,300 5,600 6,100 6,600 6,600 6,600 6,600 6,600 6,600 6,600 6,600 6,600 6,600 6,600 6,600 6,591 6,600 6,600 6,600 5,400 4,152 2,871 161,262 

COMBINED SCHEDULE 

OC Waste Removal kt 15,315 43,010 56,204 50,000 47,600 55,797 59,680 54,636 44,421 42,100 23,138 15,840 9,685 4,680 4,318 7,743 10,133 6,006 4,653 4,598 6,274 9,526 6,873 8,751 6,778 2,728 3,314 3,148 1,815 0 0 608,763 

OC Ore Production ROM kt 1,800 1,801 5,380 9,662 9,931 8,609 8,776 8,715 9,017 7,000 8,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 4,517 0 0 202,207 

UG Ore production ROM kt 0 0 600 2,300 4,800 4,800 4,800 4,800 5,300 5,300 5,600 6,100 6,600 6,600 6,600 6,600 6,600 6,600 6,600 6,600 6,600 6,600 6,600 6,600 6,591 6,600 6,600 6,600 5,400 4,152 2,871 162,414 

Ore Production ROM kt 1,800 1,801 5,980 11,962 14,731 13,409 13,576 13,515 14,317 12,300 13,600 13,100 13,600 13,600 13,600 13,600 13,600 13,600 13,600 13,600 13,600 13,600 13,600 13,600 13,591 13,600 13,600 13,600 9,917 4,152 2,871 364,621 

This Report has been prepared for the sole use of China Gold and must be read in its entirety and is subject to the third party disclaimer clauses contained in the body of this Report. 

ADV-HK-03709 China Gold Tibet Jiama Gold NI 43-101_PFS_signed

Page 139 

END OF REPORT 





CONSENT OF QUALIFIED PERSON 




Phone: +86 10 6410 4800 

tony@cameronmining.com 

To: 

And to: 

British Columbia Securities Commission 

Alberta Securities Commission 

Ontario Securities Commission 

China Gold International Resources Corp. Ltd. (the “Company”) 

I, Anthony Robert Cameron, consent to the public filing of the technical report titled “Pre- 

Feasibility Study Technical Report on the Jiama Copper-Polymetallic Project, Metrorkongka 

County, Tibet Autonomous Region, People’s Republic of China” dated November 12, 2012 

(the “Technical Report”) and any extracts from or summary of the Technical Report in the 

news release of the Company dated October 25, 2012 (the “Disclosure Document”), and to 

the filing of the Technical Report with the securities regulatory authorities referred to above. 

I further consent to: (a) the filing of the Technical Report with any stock exchange and other 

regulatory authority and any publication of the Technical Report by them for regulatory 

purposes, including electronic publication in the public company files on their websites 

accessible by the public; (b) the publication of the Technical Report by the Company on its 

website or otherwise; and (c) all other uses by the Company of the Technical Report or 

excerpts thereof in connection with its business. 

I also certify that I have read the Disclosure Document and that it fairly and accurately 

represents the information in the Technical Report that supports the disclosure. 

Dated this 12 th day of November, 2012. 

Signature of Qualified Person 


Print Name of Qualified Person 

Level 13, 68 Yee Wo Street, Causeway Bay, Hong Kong 

香港銅鑼灣怡和街 68 號 13 樓 | Tel 電話 : +852 2801 6103 | Fax 傳真 : +852 2801 6230 

Email 電郵 rungeasia@runge.com.au | Website 網址 www.runge.com






Phone: +86 10 6410 4800 

jclark@runge.com.au 

To: 

And to: 





I, Jeremy Lee Clark, consent to the public filing of the technical report titled “Pre-Feasibility 

Study Technical Report on the Jiama Copper-Polymetallic Project, Metrorkongka County, 

Tibet Autonomous Region, People’s Republic of China” dated November 12, 2012 (the 

“Technical Report”) and any extracts from or summary of the Technical Report in the news 

release of the Company dated October 25, 2012 (the “Disclosure Document”), and to the 

filing of the Technical Report with the securities regulatory authorities referred to above. 

















Level 12, 333 Ann Street 

Brisbane, Queensland 

Australia, 4000 

Phone: +61 7 3100 7200 

andrew.newell@pincock.com 


To: 

And to: 





I, Andrew James Haigh Newell, consent to the public filing of the technical report titled “Pre- 

Feasibility Study Technical Report on the Jiama Copper-Polymetallic Project, Metrorkongka 

County, Tibet Autonomous Region, People’s Republic of China” dated November 12, 2012 

(the “Technical Report”) and any extracts from or summary of the Technical Report in the 

news release of the Company dated October 25, 2012 (the “Disclosure Document”), and to 

the filing of the Technical Report with the securities regulatory authorities referred to above.

Pre-Feasibility Study for the Phase II Expansion of the Jiama Project

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