White Mountain Ore Reserve increased by 81%



    TORONTO, Feb. 13 /CNW/ -

    
    Highlights

    -   The White Mountain Ore Reserve estimate has increased 81% to
        6.5 million tonnes at 3.8 g/t gold, containing 0.8 million ounces
        (categorised in table below).

    -   Approximately 73% of Measured and Indicated Resources convert to Ore
        Reserves.

    -   The White Mountain Measured and Indicated Resource estimate has
        increased 92% to 10.7 million tonnes at 3.1 g/t gold, containing
        1.1 million ounces (categorised in table below).

    -   Deposit remains open along strike to the northeast and at depth with
        drilling to continue in 2008.

    -   Ground position has been expanded to cover 128km2.

    -   White Mountain now has a mine life of at least 10 years based on the
        updated reserve estimate.
    

    Sino Gold Chief Executive Officer, Jake Klein, commented:
    "Development of White Mountain Gold Mine remains on-schedule and
on-budget to commence commissioning of the processing plant in late 2008.
    "This increase of the resource to over one million ounces and doubling of
reserves provides White Mountain with a mine life of at least ten years.
Drilling in 2008 is planned to test the regional potential as well as continue
to further extend mineralisation to the northeast and at depth.
    "White Mountain has been advanced very quickly towards becoming Sino
Gold's second mine and is shaping up as a robust, simple underground mining
operation. Relatively low capital and operating costs in China should enhance
the economic returns for this mine."

    Mineral Resource Estimate

    The interpretation of data from the 147 diamond drillholes (totalling
32,451m) completed during 2007 culminated in the White Mountain identified
Mineral Resource being significantly upgraded and increased over the
January 2007 estimate.
    The updated White Mountain in-situ Measured and Indicated Resource
estimate as tabulated below totals approximately 10.7 million tonnes at
3.1 g/t gold, containing 1.1 million ounces.

    
    -------------------------------------------------------------------------
                  January 2007          February 2008          % Change
              -------------------- --------------------- --------------------
                      Grade                 Grade
    Category  Million (g/t   Gold   Million (g/t   Gold   Tonnes  Grade  Gold
              Tonnes   Au) ('000oz) Tonnes   Au) ('000oz)
    ------------------------------ --------------------- --------------------
    Measured    2.6    3.6    304     6.7    3.1     674   159%   -13%   122%
    Indicated   2.3    3.5    258     4.0    3.1     407    76%   -10%    58%
              -------------------- --------------------- --------------------
              -------------------- --------------------- --------------------
    M+I         4.9    3.6    562    10.7    3.1   1,081   120%   -13%    92%
    Inferred    2.9    3.1    284     1.7    2.1     110   -42%   -34%   -61%
    -------------------------------------------------------------------------
    Note: Cut-off grade of 1.0g/t gold used for both estimates. Mineral
          Resources are inclusive of Ore Reserves.
    

    This new Measured and Indicated Resource estimate is approximately double
the previous estimate in terms of both tonnes and contained ounces.
    Drilling has extended the mineralisation contained in the resource
approximately 140m to the northeast. The majority of the resource increase has
come from the northeast area of the resource.
    The grade has reduced by 13% from previous estimate, primarily due to the
drilling and inclusion of lower grade, previously Inferred Resource into
Measured and Indicated resources, and additional lower grades zones within the
deposit.
    A cut-off grade of 1.0g/t gold was used for the resources reported above.
The tonnes and grade of the Measured and Indicated Resources at varying
cut-off grades is detailed in the graph and table available at
www.sinogold.com.au/newsite/Docs/PDF/White%20Mountain%20Reserves%20Feb08%20FIN
AL.pdf.

    The updated resource estimate is primarily based on:

    
    -   Data from 297 diamond drillholes, totalling 83,006m, all drilled by
        Sino Gold, as well as data from channel sampling of trenches and two
        underground adits;

    -   Drill spacings of generally 40m along strike and in the range of 40m
        to 60m down dip;

    -   Cut-off grade of 1.0g/t gold; and

    -   Ordinary Kriging geostatistical resource estimation technique.

    Ore Reserve Estimate

    The updated White Mountain Ore Reserve estimate as tabulated below totals
6.5 million tonnes at 3.8g/t gold, containing 0.8 million ounces.

    -------------------------------------------------------------------------
                   March 2007           February 2008          % Change
              -------------------- --------------------- --------------------
                      Grade                 Grade
    Category  Million (g/t   Gold   Million (g/t   Gold   Tonnes  Grade  Gold
              Tonnes   Au) ('000oz) Tonnes   Au) ('000oz)
    ------------------------------ --------------------- --------------------
    Proved      1.8    4.2    239     4.2    3.7     494   138%   -13%   106%
    Probable    1.4    4.2    195     2.3    4.0     290    58%    -5%    49%
              -------------------- --------------------- --------------------
              -------------------- --------------------- --------------------
    Total       3.2    4.2    434     6.5    3.8     784   102%   -10%    81%
    -------------------------------------------------------------------------
    Note: Cut-off grades used: 2.0g/t and 2.3g/t gold for March 2007
                               estimate.
                               1.7g/t and 2.0g/t gold for February 2008
                               estimate.


    Proved Reserves comprise 63% of the total Ore Reserve.
    Ore is planned to be accessed via a decline with the sub-level open
stoping mining method being used for portions of the orebody thicker than 10m,
with the cut-and-fill method being utilised for the remainder of the deposit.
The reduced dip of the deposit in some areas has resulted in much of the area
previously planned to be mined by bench stoping now planned to be extracted
using cut-and-fill stoping.
    Key parameters for this Ore Reserve estimate are:

    -   Gold price of US$650 per ounce;

    -   Current estimates of operating costs and metallurgical recoveries;
        and

    -   Cut-off grades of between 1.7g/t to 2.0g/t gold.

    The following additional information is available at www.sinogold.com.au
under "Our Projects":

    -   The reserve and resource estimate methodology, including a summary of
        relevant assessment and reporting criteria (in the Reserves and
        Resources section); and

    -   A table containing details on all drillholes completed (in the White
        Mountain section).

    Geological Setting

    Gold mineralisation at White Mountain is:

    -   Contained within a major northeast trending regional fault zone;

    -   Hosted by a silicified breccia and pyrite veinlets in this fault zone
        between a "hanging wall" quartzite and a "footwall" silicified
        dolomite or marl;

    -   Associated with multi-stage silica, iron-oxide, pyrite and barite
        mineralisation;

    -   Dipping between 25 degrees and 70 degrees (average 45 degrees) to the
        southeast.
    

    The resource extends over a strike length of approximately 1,520m, to a
maximum depth of 530m, with true thickness up to 60m and an average true width
of approximately 9m. Geological continuity is well demonstrated by the extent
of breccia development on the main controlling fault with high-grade shoots at
the intersections of faults.
    A diagram can be viewed at
www.sinogold.com.au/newsite/Docs/PDF/White%20Mountain%20Reserves%20Feb08%20FIN
AL.pdf.
    The geometry of the mineralisation should enable higher grade zones to be
mined in the early years of the operation.
    The primary control on mineralisation is interpreted to be the
intersection of the two major northeast-trending regional faults (F100 and
F102). Transverse faults across the F100 Fault are interpreted to also
localise gold mineralisation into high-grade zones.
    Gold mineralisation at White Mountain remains open along strike to the
northeast and at depth.

    Mine Development

    In August 2007, the Sino Gold's Board of Directors approved development
of White Mountain Gold Project
    Project development capital costs are estimated to total US$55 million
(including contingency). Sino Gold owns 95% of White Mountain and is
responsible for funding the local joint-venture partner through development.
    The White Mountain processing plant is a standard Chinese design Carbon
in Leach ("CIL") plant and being built entirely with Chinese equipment. Mill
throughput is planned to be approximately 650,000 tonnes per annum with
overall gold recoveries averaging 80%.
    White Mountain is planned to produce approximately 70,000 ounces per
annum.
    White Mountain is located close to infrastructure in an established
mining district. The proposed site layout is summarised in the diagram at
www.sinogold.com.au/newsite/Docs/PDF/White%20Mountain%20Reserves%20Feb08%20FIN
AL.pdf.

    White Mountain Outlook

    During the winter months, development of the underground mine is the key
activity on site. Detailed engineering design, off-site fabrication and
procurement are also being carried out over winter with the majority of the
construction work planned to start in April 2008.
    Development of White Mountain Gold Project remains on-schedule and
on-budget to commence commissioning of the processing plant in late 2008.
    As the resource remains open to the northeast and at depth, the Company
intends to continue drilling in 2008 with the aim of further upgrading and
expanding resources, as well as discovering near-mine gold resources.

    Competent Persons

    These Mineral Resources and Ore Reserves are presented in accordance with
the 2004 Edition of the "Australasian Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserves ("JORC Code"), which is equivalent
under the corresponding categories of mineral reserves and mineral resources
to Canada's National Instrument 43-101 - Standards for Disclosure for Mineral
Projects ("NI43-101") and CIM Standards. Further technical information on the
White Mountain Project is contained in the Offer and Takeover Bid Circular for
Golden China Resources Corporation dated 24 October 2007.
    The information relating to this Mineral Resource estimate has been
compiled by Sino Gold's team of geologists led by Dr Yumin Qiu (MAIG) in China
and Mr Phillip Uttley (FAusIMM) in Australia.
    Mr Robin Simpson (MAIG) of SRK Consulting prepared the Mineral Resource
estimate using the Ordinary Kriging geostatistical method.
    Mr Uttley takes responsibility for the information relating to this
Mineral Resource estimate and has over 25 years relevant experience in
evaluation of gold deposits. Mr Uttley consents to the inclusion in this
report of the information in the form and context in which it appears.
    Dr John Chen (MAusIMM) takes responsibility for the information relating
to this Ore Reserve estimate. Dr Chen is an underground mining engineer,
Manager - Mining, Technical Services for Sino Gold, and has more than 20 years
experience in the mining industry.
    Mr Uttley and Dr Chen are full-time employees of Sino Gold Limited and
are Competent Persons as defined in the JORC Code and "qualified persons"
under NI43-101. They consent to the inclusion in this report of the
information in the form and context in which it appears.

    About White Mountain

    White Mountain is being developed into Sino Gold's second mine during
2008 and is located 230km south-southeast of Changchun, the capital city of
Jilin Province in northeast China. Sino Gold owns 95% of the project and the
surrounding 128km2 exploration licences.
    The White Mountain project is located in lightly forested public land,
within 2km of a newly paved concrete road that is linked to the national
highway and railway systems. Grid power and water are available on site, which
is only 7km from the prefecture level city of Baishan, a coal and iron ore
mining centre.

    Cautionary Statement on Forward-Looking Information

    Certain statements contained in this news release constitute
forward-looking information within the meaning of securities laws. The words
"expect", "will", "intend", "estimate" and similar expressions identify
forward-looking statements. Forward-looking statements are necessarily based
upon a number of estimates and assumptions that, while considered reasonable
by management of Sino Gold are inherently subject to significant business,
economic and competitive uncertainties and contingencies. Sino Gold cautions
the reader that such forward-looking statements involve known and unknown
risks, uncertainties and other factors that may cause the actual financial
results, performance or achievements of Sino Gold to be materially different
from their respective estimated future results, performance or achievements
expressed or implied by those forward-looking statements and the
forward-looking statements are not guarantees of future performance. These
risks, uncertainties and other factors include, but are not limited to:
changes in the worldwide price of gold or certain other commodities (such as
fuel and electricity) and other currencies; changes in U.S. dollar interest
rates or gold lease rates; risks arising from holding derivative instruments;
legislative, political or economic developments in the jurisdictions in which
Sino Gold carries on business; operating or technical difficulties in
connection with mining or development activities; employee relations;
availability and increasing costs associated with mining inputs and labour;
the speculative nature of exploration and development, including the risks of
diminishing quantities or grades of reserves, adverse changes in our credit
rating, contests over title to properties, particularly title to undeveloped
properties; and the risks involved in the exploration, development and mining
business. These factors are discussed in greater detail in statutory releases
filed with the applicable securities regulatory authorities.





For further information:

For further information: regarding Sino Gold please contact: Investor
Enquiries: Jake Klein, CEO or Roger Howe, Investor Relations, +61 2 8259 7000,
info@sinogold.com.au; Media Enquiries: Kate Kerrison, +61 2 6746 3221,
kate@katekerrison.com.au

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SINO GOLD MINING LIMITED

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