China Gold International Resources Provides Preliminary 2013 Operating, Production and Exploration Guidance and 2014 Outlook
VANCOUVER, Feb. 27, 2014 /CNW/ - China Gold International Resources Co. Ltd. (TSX:CGG) (HKEx: 2099) ("China Gold International Resources" or the "Company") is pleased to provide preliminary guidance on 2013 operating, production and exploration progress on both of its mines and share its goals for 2014.
2013 Production, Operating and Exploration Highlights
Gold production from the Chang Shan Hao Gold Mine ("CSH Mine") mine
slightly decreased by 5.8% from 139,443 ounces in 2012 to 131,418
ounces in 2013. This decline is partially due to lower grades of ore
mined and longer recovery periods caused by the growing height of the
Cumulative gold recovery at CSH has been steadily increasing over the
last few years: from 39% in 2010, to 46% in 2011, to 53% in 2012 and to
54% in 2013.
The company has successfully completed a new 30,000 tonne per day
("tpd") stand-alone crushing, heap leaching and ADR (Absorption,
Desorption and Refining) plant in addition to the existing 30,000 tpd
facility. A new 80 kilometer long government-built 110 Kilovolt ("KV")
power line was completed by end of November 2013. CSH Mine's processing
capacity increased from 30,000 tpd to 60,000 tpd.
Copper production from the Jiama Copper-Gold Polymetallic Mine ("Jiama
Mine" or "Jiama") mine increased by 10% from 25,820,417 pounds in 2012
to 28,323,626 pounds in 2013. This is the third full year of increasing
production for the Jiama mine.
On December 20, 2013, in accordance with the schedule, the Phase II
expansion NI 43-101 compliant feasibility study for Jiama has been
successfully completed by the Changchun Gold Design Institute in
conjunction with independent consulting firm Mining One and the
Company's management. The results showed measured and indicated copper
mineral resources increased to 1,486 million tonnes averaging 0.41% Cu
from 1,053 million tonnes averaging 0.44% Cu; contained copper metal
increased to 6.14 million tonnes from 4.64 million tonnes. The proved
and probable copper mineral reserves increased to 441 million tonnes at
a grade of 0.61% Cu from 363 million tonnes at 0.77% Cu. The
feasibility study estimated that the project has an NPV (9%) of $1.3
billion and is expected to generate a nominal after tax cash flow of
- By the end of December 2013, the Jiama Mine completed its 2013 drilling program for the total of 3,434 meters in the existing Tongqianshan open pit. Drilling results will be available in the first half of 2014. The major goals are to further define the main high grade ore body in the current open pit mining area and also to better understand the geological structural on controlling metallogenic regularity. Total exploration expenditures were approximately US$ 4.32 million.
Mr. Bing Liu, CEO of the Company, commented, "During 2013, we have successfully upheld our promises to the shareholders about our expansion plans on both of our mines. The Company reached monumental milestones by completing the expansion construction at CSH and finishing Jiama's feasibility study. Last year was difficult for most metals producers as metal prices and share values declined. We consider metal prices fluctuations to be a part of normal business cycle.
We are focusing on growth which incorporates a very stringent company-wide cost reduction and management policy and extremely selective acquisition strategy. This strategy worked well for us in 2013 and helped us avoid overpaying for assets or potential write-offs. Now, we expect to see many more opportunities in our sector and we are prepared to act on those opportunities if we see that they offer great value to our shareholders".
2014 Production and Operating Outlook:
Organic growth, cost management and international expansion continue to be the Company's main goals for 2014. The Company plans to continue to work very closely with China National Gold, the largest gold producer in China and a major shareholder of the Company. We serve as an international expansion vehicle for China National Gold and one of our mandates from them is to acquire and further develop accretive, top-quality assets. We continue to leverage their financial capabilities and technical expertise to facilitate financing of those acquisitions and to develop them into profitable producers.
CSH Developments and Outlook:
The 2014 gold production for the Company's CSH Mine is expected to be approximately 200,000 ounces.
At CSH, the ramp-up of production on the newly build 30,000 tpd crusher and ADR plant has commenced. Test runs are being performed. The Company expects the first gold output from the new 30,000 tpd facility in second quarter of 2014.
Gold production is expected to nearly double from its 2013 level of 131,418 ounces to about 260,000 ounces per annum by 2015.
The Company continues to conduct surface reconnaissance and exploration for further expansion opportunities around the CSH Mine.
Jiama Developments and Outlook:
The 2014 copper production for the Company was previously expected to be about 50 million pounds.
At the present time, the Company is not able to provide definitive 2014 production guidance for Jiama Mine as the mine is dealing with reduced power supply that has affected the central Tibet region during the winter months. The Tibet government and the Central Government of China are currently progressing a power supply development plan. Current locally-generated power supply available to the Company is subject to seasonal interruptions during the winter months due to the harsh climate.
The Company has implemented counteractive measures to mitigate the effect of power shortages, such as accelerating previously scheduled equipment maintenance and time off for employees during this time. Production has slowed as a result of the power supply issues, and the Jiama Mine temporarily suspended operations around the Chinese holiday period in January 2014. Production has resumed with the assistance of the local government and hydro companies, but at less than the planned capacity. The Company anticipates that the Jiama Mine will be able to resume full production in April or May 2014 as seasonal power supply comes back online.
Once the full power supply is restored, the Company expects to be able to increase productivity and efficiency in order to generate additional production to meet its previously expected and aforementioned 2014 guidance of approximately 50 million pounds of copper. However, any increase in productivity will depend on adequate power supply and the successful implementation of efficiency and mine planning being undertaken during the slowdown. Accordingly, the Company will need to confirm its 2014 guidance for the Jiama Mine in mid-2014.
The construction of Phase II expansion is not expected to be significantly affected by the power shortage and is expected to be completed on time.
Jiama's production capacity will grow in 2 stages. At the completion of stage one, scheduled for the second half of 2014, the new mill's capacity is expected to grow from 6,000 tpd to 28,000 tpd of ore. Stage two construction of an additional 22,000 tpd capacity is expected to be completed by the second half of 2015. This expansion will grow Jiama's processing capacity nearly 8 times from 6,000 tpd in 2013 to 50,000 tpd in 2015. By 2016, copper production is expected to reach 176,000,000 pounds.
Final Year-End 2013 Results and Conference Call
China Gold International expects to report its Year-End 2013 Results on March 26, 2014 and the results will be available on the company's website and SEDAR. In connection with the release, management will hold a conference call to discuss year-end results and performance. The Company will provide further details about precise timing of the release date and the call at a later date.
About China Gold International Resources
China Gold International Resources Corp. Ltd. is based in Vancouver, BC, Canada and operates both profitable and growing mines, the CSH Gold Mine in Inner Mongolia, and the Jiama Copper-Gold Polymetallic Mine in Tibet Autonomous Region of the People's Republic of China. The Company's objective is to continue to build shareholder value by growing production at its current mining operations, expanding its resource base, and aggressively acquiring and developing new projects internationally. The Company is listed on the Toronto Stock Exchange (TSX: CGG) and the Main Board of The Stock Exchange of Hong Kong Limited (HKEx: 2099).
Cautionary Note about Forward-Looking Statements
Certain information regarding China Gold International Resources contained herein may constitute forward-looking statements within the meaning of applicable securities laws. Forward-looking statements may include estimates, plans, expectations, opinions, forecasts, projections, guidance or other statements that are not statements of fact. Although China Gold International Resources believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. China Gold International Resources cautions that actual performance will be affected by a number of factors, most of which are beyond its control, and that future events and results may vary substantially from what China Gold International Resources currently foresees. Factors that could cause actual results to differ materially from those in forward-looking statements include market prices, exploitation and exploration results, continued availability of capital and financing and general economic, market or business conditions. The forward-looking statements are expressly qualified in their entirety by this cautionary statement. The information contained herein is stated as of the current date and subject to change after that date.
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