Sino Gold - December 2007 Quarterly Report

    TORONTO, Jan. 28 /CNW/ -

                                 KEY POINTS


    -   Gold production increased by 128% to 32,186 ounces for the quarter at
        a cash cost of US$412/ounce, bringing production for 2007 to a total
        of 56,981 ounces.

    -   All production parameters, except flotation recovery, now meet or
        exceed design.

    -   500m underground development completed during quarter and on-track to
        contribute to ore production from late 2008.

    -   Agreement reached with government on infrastructure support and

    -   Drilling extended the deep zone, with a best intercept of 10m at
        6.6g/t (including 5m at 11.9g/t) gold. Drilling of the upper zone
        returned 29m at 13.6g/t gold.

    White Mountain

    -   White Mountain project on schedule and budget for commissioning in
        late 2008 and commercial production early in 2009.

    -   230m of underground development completed with the decline portal and
        exhaust shaft established.

    -   Key earthworks and concrete completed to allow steel erection and
        tankage to commence on schedule in April 2008.

    -   Step-out drilling in the northeast extension intercepted 15.0m at
        9.5g/t and 18.0m at 17.8g/t.

    -   New exploration licence issued to White Mountain JV increasing ground
        position to 128km(2).

    Golden China

    -   Take-over of Golden China Resources Corporation successful.

    -   A heap leach feasibility study has been completed for the Beyinhar

    -   Assessing development opportunities for the highly refractory Nibao

    Eastern Dragon

    -   High-grade Eastern Dragon gold-silver deposit acquired for US$90M
        (72% equity).

    -   Exploration work on schedule to commence in April 2008.


    -   A potential discovery hole at the Yandan prospect in Guangxi Province
        intercepted 50m of low-grade mineralisation including 5m at 4.3g/t

    -   Sino Gold Fields Alliance entered into its first joint venture at
        Bengge in Yunnan Province.

    -   Updated resource and reserve estimates are planned to be released for
        Jinfeng, White Mountain and Beyinhar during the March 2008 quarter.


    -   A$170 million placement to fund acquisition of Eastern Dragon and
        advance other projects towards production.

    -   Offer to convertible noteholders successfully completed.

    -   Net available cash of US$36 million at 31 December 2007, prior to
        approval by shareholders on 24 January 2008 of the US$107 million
        second tranche of placement.

    Safety And Environment

    During the quarter, five lost time injuries occurred at the Company's
projects, four were minor drilling related lost time injuries. The Company is
working with the drilling contractor to ensure safety performance is improved.
    No reportable environmental incidents occurred.

    Jinfeng Mine (82% equity)

    Gold production totalled 32,186 ounces for the December quarter, a
128% increase on September quarter's production. Gold production for 2007
totalled 56,981 ounces.
    Gold production for the month of December totalled 12,009 ounces with
mill throughput of 98,771 tonnes approaching design rates of 100,000 tonnes
per month. Towards the end of December the mill was able to operating at
throughput rates of 190 tonnes per hour versus design of 150 tonnes per hour.
Mill throughput rates, BIOX throughput rates and CIL recovery were all at or
ahead of design capacity but flotation recovery remained lower than design at
82% (versus 91% design).
    Consultants have been engaged to assist in improving flotation
performance and the focus is on steady state operation, optimising reagent
addition, minor plant modifications and grind size. Short term periods of
higher recovery, up to the high 80's, indicate that the design rates can be
achieved given the appropriate circuit stability.

    Jinfeng Mine                           September    December        2007
    Operating                                   2007        2007    Calendar
    Performance                              Quarter     Quarter        Year
    Waste Mined                bcm ('000)      1,476       1,555       5,275
    Ore Mined               Tonnes ('000)        162         234         692
    Ore Milled              Tonnes ('000)        111         249         449
    Head Grade                  g/t gold         5.5         5.4         5.5
    Flotation Recovery                 %        77.7        80.5        77.5
    BIOX(R)/CIL Recovery               %        92.7        92.9        92.8
    Overall Recovery                   %        72.0        74.8        71.9
    Gold Production               Ounces      14,118      32,186      56,981
    Gold Sold                     Ounces      13,435      27,512      43,483

    Cash operating costs for the December quarter were US$412/ounce. These
costs include a charge of US$16 per ounce associated with repair of the
agitators which is being claimed from the supplier. Costs are expected to
reduce as gold production continues to increase during 2008.
    Development of the underground mine progressed well with 500m of advance
during the quarter. Decline advance totalled 741m at the end of December and
the decline is forecast to reach the first ore horizon during the September
2008 quarter. Development of both the exhaust and fresh air shafts commenced
during the December quarter.
    An in-principal agreement was reached with the local government to amend
Jinfeng's concessional tax treatment in return for improved infrastructure for
Jinfeng. The Jinfeng Joint Venture has agreed to forego its entitlement to
reduced income tax until 2010. By agreeing to pay an additional 10% tax
equalisation amount to the local government until 2010, the applicable income
tax rate is now an effective 25%, the same as the national income taxation
rate. The highest priority infrastructure projects to be undertaken by the
local government are an upgrade and surfacing of the road and an upgrade to
the power supply lines, both of which have already commenced.

    Jinfeng Mine Exploration

    Drilling during the quarter continued to:

    -   extend and infill the deep zone to the east-southeast on the F3 and
        F7 Faults. Mineralisation has been extended further SE to 2280E;

    -   infill the upper zone on the F3 Fault; and

    -   explore the F7 Fault at the western end of the deposit for down-dip

    A total of 31,284m was drilled at Jinfeng during 2007 and a table
detailing the results of these drillholes is available for download from

    Key assay results from drilling undertaken during the quarter include:

                   Section            Zone        From   Interval      Grade
                                                    (m)        (m)   (g/t Au)
    HDDS171A         2240E            Deep         951        4.0        3.8
    HDDS171B         2240E            Deep         933        2.0        3.4
       "               "              Deep         947        5.0        2.4
    HDDS178          2280E            Deep         977        8.0        3.8
    HDDS178A         2280E            Deep         976       10.0        6.6
    HDDS181          1920E           Upper         188       12.0        3.2
       "               "                           202       29.0       13.6
    Note: All intercepts are downhoie intervals and based on 1.0g/t gold cut-
    off grade.

    Drilling confirmed the intensity of mineralisation and the location of
key recent results in the deep high-grade zone plunging east-southeast along
the intersection of the F3 and F7 Faults.
    Deep drill hole HDDS178 (and two wedge drill holes) was aimed at the
conceptual target of the intersection of the main controlling F3 & F7 Faults
and the Permian limestone in the east-southeast deep zone. On section 2280E,
drill holes HDDS178A and HDDS178 intersected strong mineralisation in the base
of the Triassic sediments, above the Permian limestone, over 8 metres wide
with 50 metres down-dip extent. Gold grades are moderate, but with strong
arsenic mineralisation. HDDS178A and HDDS178 intercepted 10m at 6.6g/t gold
(including 5m at 11.9g/t) and 8m at 3.8g/t gold, respectively. The up-dip
wedge hole HDDS178B intersected 2m at 1.3g/t gold. The deep zone remains open
    The deep zone was also tested on Section 2240E by HDDS171, HDDS171A and
HDDS171B, which intercepted 3m at 3.3g/t gold, 4m at 3.8g/t gold and 5m at
2.4g/t gold, respectively. Assay results are pending from an up-dip wedge hole
(HDDS171C) that has been completed into the interpreted centre of the main
deep zone target.
    A deep step-out hole (to ~1,200m) is planned to be drilled during the
March quarter, which is targeted to explore the intersection of the F3/F7
Faults and the Permian limestone contact, on Section 2440E.
    In the upper zone, HDDS181 intersected 29m at 13.6g/t gold on Section
1920, proving the westerly continuation of the previously reported
intersection in HDDS173 (16m at 8.6g/t gold) on Section 1960. Further drilling
is currently testing the down-plunge extension of this upper zone.
    Jinfeng's exploration program for 2008 is likely to be less than the 2007
program as increased drilling is prioritised on other prospects in Sino Gold's
growing exploration portfolio in China. Sino Gold plans to release updated
resource and reserve estimates for Jinfeng during March 2008.

    White Mountain Development (95% equity)

    Development of the White Mountain Gold Project in Jilin Province remains
on-schedule and on-budget to commence commissioning of the processing plant in
late 2008.
    The Project Development Permit was issued for White Mountain in early
November. This is a major milestone as the granting of this permit is the
culmination of a number of different approvals (including the environmental
impact assessment) and provides legal approval from the Chinese Government for
the project's development.
    Prior to onset of winter, major earthworks for the processing plant were
completed and concrete foundations were poured for key areas of the plant.
These concrete foundations will enable the erection of structural steel and
the installation of equipment and CIL tanks to commence around mid-March 2008.
    During the winter months, development of the underground mine is the key
activity on site. Development of the main decline and south ventilation
decline commenced during the quarter, with advance totalling 230m to
31 December 2007.
    Detailed engineering design and procurement is being carried out over the
winter months with the majority of the construction work planned to start in
mid-March 2008.
    All important equipment has been ordered and off site fabrication of
structural steel has commenced.
    Good progress continues to be made towards meeting the schedule of
commercial production in early 2009.

    White Mountain Exploration (95% equity)

    Drilling continued at White Mountain until the onset of winter in
November and drilling completed during 2007 totalled 33,783 metres and a table
detailing the results of these drillholes is available for download from
    The data from this extensive drilling program is currently being
evaluated. Sino Gold plans to release updated resource and reserve estimates
for White Mountain during February 2008.

    Assay results from drilling at White Mountain during the quarter include:

    Hole No.              Purpose                 From   Interval      Grade
                                                    (m)        (m)   (g/t Au)
    BDDS274         Northeast extension          276.0       15.0        9.5
    BDDS275                Infill                224.3       29.2        2.8
    BDDS279                Infill                223.7        6.5       23.9
    BDDS281         Northeast extension          333.6        4.8        9.0
    BDDS284         Northeast extension          258.0        5.0        4.6
       "            Northeast extension          271.0       19.8        1.7
    BDDS290         Northeast extension          382.2        5.2        4.6
    BDDS293         Northeast extension          269.0        7.0       10.0
    BDDS295         Northeast extension          235.8       21.6        2.5
    BDDS298         Northeast extension          318.5       12.0        7.0
    BDDS299         Northeast extension          228.0       18.0       17.8
    BDDS302         Northeast extension          237.6        4.0       30.8
    Note: All intercepts are downhole intervals and based on 1.0g/t gold cut-
    off grade.

    Step-out drilling in the northeast extension area continued to confirm
strong mineralisation, with best intercepts of 15.0m at 9.5g/t gold from 276m
downhole in BDDS276 and 18.0m at 17.8g/t gold from 228m downhole in BDDS299.
    A new exploration licence (23km(2)) was issued to the White Mountain
joint venture, increasing the ground position at White Mountain to 128km(2).


    Sino Gold entered into agreements during the quarter to acquire an
effective 72% interest in the Eastern Dragon Lode 5 gold-silver deposit in
northern China's Heilongjiang Province at a cost of US$90 million, subject to
various conditions precedent. Sino Gold has also secured an exclusive right to
acquire up to 80% of the surrounding Exploration Licence (53km(2) in area) for
a price to be determined.
    By 31 December 2007, Sino Gold had paid US$45 million of the agreed
US$90 million acquisition cost. This has enabled the joint venture company to
make a significant payment to the Heilongjiang Ministry of Land and Resources
in relation to the agreed government valuation of the asset.
    Eastern Dragon Lode 5 is a high-grade, low-sulphidation epithermal
gold-silver deposit which has been tested by extensive trenching, diamond
drilling and underground development.
    An exploration brigade under the Non-ferrous Metals Geology and
Exploration Bureau ("Brigade") discovered gold mineralisation at Eastern
Dragon in 1998. The Brigade is also Sino Gold's partner at the adjacent
Sanjianfang Joint Venture and this long-standing relationship laid the
foundation for this acquisition.
    Exploration at Eastern Dragon has focussed primarily on Lode 5 where
gold-silver mineralisation has been identified over a strike length of 600m
and to a depth of 250m. The Brigade has identified mineralisation that is
currently defined only in accordance with Chinese standards. Further
confirmation work is required prior to reporting a Mineral Resource for Lode 5
in accordance with internationally accepted standards including Australasia's
JORC Code.
    During 2008, Sino Gold intends to evaluate Lode 5 and also progress the
acquisition of the surrounding Exploration Licence. All partners to the joint
venture are expected to contribute to future costs proportionately to their
joint venture interests.
    Sino Gold also intends to undertake additional metallurgical,
geotechnical, mining studies and progress the permitting, so as to fast track
this project into development. Scoping studies planned for the first half of
2008 with a view to progress towards a development decision by year end.

    Preliminary studies of the potential development of Eastern Dragon Lode 5

    -   Mining via a small open pit followed by an underground operation;

    -   Simple CIL processing plant; and

    -   Plant throughput in the range of 300,000 to 500,000 tonnes per annum.

    The Brigade has identified at least ten other quartz-vein prospects
containing anomalous gold values or mineralisation in the surrounding
Exploration Licence area, most of which require further evaluation. In
addition, Sino Gold will continue to explore the Sanjianfang Exploration
Licence immediately south of Eastern Dragon.


SOURCES ------------------------------------------------------------------------- On 13 August 2007, Sino Gold announced an offer (the "Offer") of one Sino Gold share for every 4.5 share of Golden China Resources Corporation. In December 2007, Sino Gold proceeded to compulsorily acquire the shares of Golden China that were not acquired pursuant to the Offer. This process has now been completed and the remaining shares were issued on 16 January 2008 to complete the acquisition. Sino Gold has now issued a total 14.2 million shares (6% of shares on issue) to acquire 100% of Golden China. Golden China's key assets are the Beyinhar project in Inner Mongolia, the Nibao project in Guizhou Province and the BioGold processing facility in Shandong Province. These assets are complementary and are located within the three areas in which Sino Gold already has significant activity and capacity. The process to integrate Golden China's assets and management into Sino Gold is already well underway. Beyinhar Sino Gold is targeting to commence construction of a heap-leach operation at Beyinhar during 2008. Permitting has been progressed by Golden China on the basis of a 2.5mtpa heap-leach "starter" operation at Beyinhar. The Chinese Feasibility Study to commence permitting this scale operation has been completed. Providing satisfactory results at the completion of further studies, the intent is to immediately commence construction of this smaller scale operation while completing an aggressive drilling campaign to outline the extent of the oxide mineralisation and test the potential for deeper, higher grade sulphide mineralisation. Sino Gold plans to release updated resource and reserve estimates for Beyinhar during February 2008. Drilling to extend both the oxide and sulphide resource potential will commence late in the March quarter. Nibao The gold mineralisation at Nibao is believed to be highly refractive and contains potentially preg-robbing carboniferous material. In light of current gold price and the size of the current resource, Sino Gold is developing an exploration strategy and assessing possible development opportunities for the Nibao deposit. BioGold Sino Gold assumed management control of the BioGold plant in Shandong during the quarter. Sino Gold has appointed a new general manager and finance manager to the plant. A strategic and operational assessment of the asset is underway. ------------------------------------------------------------------------- Golden Triangle - Jinfeng Regional Exploration ------------------------------------------------------------------------- Jinluo Joint Venture (earning up to 92.5% equity) The Jinluo Joint Venture area covers approximately 25km strike length along the margin of the Laizhishan Dome southwest of the Jinfeng deposit. A total of 4,752m of drilling was completed at two main prospects, Banna and Bannian, in the Jinluo Joint Venture during 2007. Low-grade gold with strong arsenic mineralisation was intersected in both prospects but not in economic quantities. These results are currently being reviewed. Jindu Joint Venture (earning 70% equity) Exploration on the Jindu tenements continued to focus on the margin of the Laizhishan Dome to the northwest of Jinfeng. Work was primarily undertaken at four prospects - Pogao, Lurong, Luzhai-Baqiao and Linlou. The initial drilling program of three holes was completed at the Pogao prospect during the quarter. Low-grade gold with strong arsenic mineralisation was intersected at Pogao, and this prospect is also being reviewed before further drilling. Drilling of the Luzhai-Baqiao and Linlou prospects is planned for early 2008. ------------------------------------------------------------------------- Golden Triangle - Regional ------------------------------------------------------------------------- In addition to the area near Jinfeng, the Golden Triangle team explores the surrounding gold province that spans the Guizhou, Guangxi and Yunnan Provinces in southern China. The Golden Triangle province contains several "Carlin-style" gold deposits containing in excess of one million ounces. Guangxi Joint Venture (earning 70% equity) At Yandan, drilling has commenced on an area containing widespread gold geochemical values, a major fault structure and a significant geophysical anomaly (IP) potentially over strike length of 900m. Yandan is at the western end of a target zone nearly 15km long that also includes the Longfeng and Daping prospects of interest, and small oxide mines. These are situated on the same major structural corridor extending 50km southeast from Jinfeng, and in a similar geological setting to Jinfeng. The first hole drilled by Sino Gold at Yandan (GXYD12) intersected a wide, low-grade zone over ~50m which includes 5m at 4.3g/t gold from 163.9m down-hole. Associated with the major F1 Fault, the same mineralised zone returned an intercept of 18.7m at 1.7g/t gold closer to surface in an earlier vertical drill hole and 20.5m at 1.6g/t gold from a horizontal surface trench. Drilling continued at the Gengxin and Bayan prospects. First phase drilling at both these prospects intersected low grade gold mineralisation and strong arsenic values. Both prospects are being reviewed before further drilling, which is presently focussed on the Yandan prospect. Nibao Joint Venture (70% equity, up to 84% equity) Nibao, acquired as part of the Golden China transaction, is located in northwest Guizhou Province 30km south-southeast of Sino Gold's existing Greatland Joint Venture. The Golden Triangle team is evaluating the exploration carried out to date at Nibao, focusing on potential areas of higher grade, and planning a substantial drilling program for 2008 for Nibao. Drilling recommenced at Nibao on 15 December 2007, upon takeover by Sino Gold, to complete a drill hole in the Mayday area. ------------------------------------------------------------------------- Sino Gold Fields Alliance ------------------------------------------------------------------------- The objective of the SGF Alliance is to discover gold reserves of at least 5,000,000 gold-equivalent ounces with the potential to produce approximately 500,000 ounces per annum, exploring primarily for large bulk-mineable styles of gold and/or copper-gold mineralisation. The SGF Alliance entered into its first joint venture during the quarter. The property to be explored by the SGF Alliance is the Bengge Exploration Licence, which is located in the Pulang Belt in Yunnan Province. The SGF Alliance will acquire an initial 20% from Kunming Jinsanjiang Mineral Products Company and has the right to acquire up to 97% upon meeting agreed expenditure milestones. A number of porphyry copper-gold deposits are known within the same belt in Yunnan Province, most notably the world-class Pulang copper-gold deposit that contains more than 10 million gold-equivalent ounces. The Bengge property is located approximately 40km south-southeast of Pulang and approximately 400km northwest of Kunming, the provincial capital. Bengge gold mineralisation is hosted by sheeted arrays of parallel, low-sulphide, narrow quartz veins in several syenite intrusions. This prospect is untested by drilling and has been the site of small scale gold mining. Alliance drilling at Bengge is intended to commence in mid-2008 following an initial exploration program to define drill targets and receipt of requisite approvals from the relevant Chinese authorities. The SGF Alliance continues to evaluate opportunities in China, particularly in the four identified priority mineral belts. Agreements with local Brigades has given access to a number of highly prospective areas, and several opportunities are now being progressed towards possible acquisition. ------------------------------------------------------------------------- Corporate ------------------------------------------------------------------------- Early Conversion of Convertible Note Completed Following approval by noteholders at a meeting on 2 November 2007, the Company has issued a total of 15,383,045 shares in relation to the early conversion of its $35 million 5.75% convertible subordinated notes due 2012. Placement of A$170 Million On 14 December 2007, Sino Gold successfully arranged an A$170 million placement through the issue of 26.46 million ordinary shares to institutional investors ("Placement"). There was very strong demand for the Placement which was heavily over subscribed. The Placement was conducted through a bookbuild process and a final price of A$6.45 per share was achieved, representing a 4.4% discount to the closing price on the day immediately prior to the announcement of the Placement. Settlement of the Placement is planned to take place in two tranches: - Tranche 1 - 9.79 million shares were settled on 19 December 2007; and - Tranche 2 - 16.67 million shares which will be settled subject to approval at an extraordinary general meeting of Sino Gold shareholders to be held on 24 January 2008. The shares were allotted to a range of institutional investors globally and to Sino Gold's major shareholder, Gold Fields Limited. Cash Position At 31 December 2007, the Company had net available cash of US$36 million (A$41 million), plus US$107 million to come from the second tranche of the placement pending approval by shareholders on 24 January 2008. Exploration Expenditure Exploration expenditure, excluding business development and exploration office costs, incurred by the Company is summarised in the table below. ------------------------------------------------------------------------- 2007 Calendar Dec 2007 Sep 2007 June 2007 March 2007 Year to Date Quarter Quarter Quarter Quarter Project (US$000's) (US$000's) (US$000's) (US$000's) (US$000's) ------------------------------------------------------------------------- Jinfeng Mine 7,185 2,372 1,663 1,814 1,336 Golden Triangle 3,533 1,304 1,195 737 297 White Mountain 3,513 922 2,135 385 71 Other 1,086 433 89 483 81 Total exploration expenditure 15,317 5,031 5,082 3,419 1,785 ------------------------------------------------------------------------- Sino Gold continues to actively evaluate a range of joint venture and acquisition opportunities within the most prospective gold provinces of China. Hedging As part of the project finance facility, the Jinfeng Project was required to enter into a hedging program and all outstanding contracts are summarised in the table below (Sino Gold's share being 82%). Hedging Position at 31 December 2007 ------------------------------------------------------------------------- Fixed Forwards Bought Put Options Ounces US$/oz Ounces US$/oz ------------------------------------------------------------------------- 2008 73,548 524 74,184 400 2009 64,612 525 74,178 400 2010 64,612 525 - - 2011 64,612 525 - - 2012 35,789 530 - - ------------------------------------------------------------------------- Total 303,173 525 148,362 400 ------------------------------------------------------------------------- Note: A deferred premium averaging US$9/oz is payable on expiry of put options. The mark-to-market value of the total hedge book was negative US$107 million at 31 December 2007, based on a spot gold price of US$834 per ounce. The contracts are not subject to margin calls by counterparty banks. Sino Gold does not anticipate putting in place any further gold hedging and has not entered into any hedges of future interest rates or foreign exchange transactions. ------------------------------------------------------------------------- Corporate Directory ------------------------------------------------------------------------- Board of Directors James Askew Chairman Jake Klein CEO Xu Hanjing Executive Director Peter Cassidy Non-Executive Director Brian Davidson Non-Executive Director Jimmy Dowsley Non-Executive Director Peter Housden Non-Executive Director Zhong Jianguo Non-Executive Director Company Secretary Ivo Polovineo Competent Person Mr Phillip Uttley (FAusIMM), who is Sino Gold's Chief Geologist, takes responsibility for the information in this report which relates to Exploration Results, Mineral Resources or Ore Reserves. He has sufficient experience in relation to the style of mineralisation and type of deposit under consideration to qualify as a Competent Person as defined by the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves" (The JORC Code 2004 Edition). Mr Uttley is a "qualified person" under the Canadian Securities Administrators National Instrument 43-101 - Standards for Disclosure for Mineral Projects. Mr Uttley has consented to inclusion of this information in the form and context in which it appears. Capital Structure Sino Gold is listed on the Australian Stock Exchange (ASX Code: SGX) and The Stock Exchange of Hong Kong (SEHK Code: 1862). As at 22 January 2007, the Company has 224,659,095 ordinary shares on issue. A total of 8,585,000 unlisted options are on issue with expiry dates between December 2008 and November 2012, exercisable at prices that vary between $2.00 and $7.65 per share. Quarterly Share Price High Low Close Mar 2007 Qtr $8.31 $5.72 $6.26 Jun 2007 Qtr $6.48 $5.30 $5.63 Sep 2007 Qtr $7.65 $4.55 $7.52 Dec 2007 Qtr $8.20 $6.01 $6.95 Registered Office Sino Gold Mining Limited Level 22 44 Market Street Sydney NSW 2000 Australia Phone +61 2 8259 7000 Fax +61 2 8259 7070 Share Registry Registries Limited Level 7 207 Kent Street Sydney NSW 2000 Phone +61 2 9290 9600 Fax +61 2 9279 0664 Computershare Hong Kong Investor Services Limited 17th Floor Hopewell Centre 183 Queen's Road East Wanchai Hong Kong Phone: +852 2862 8555 Website: Please direct enquiries regarding your shareholding to the relevant share registry. ------------------------------------------------------------------------- About Sino Gold ------------------------------------------------------------------------- Sino Gold Mining Limited ABN: 42 093 518 579 ASX Code: SGX SEHK Code: 1862 Included in S&P/ASX 200 Index Sino Gold has been active in China since 1996. The Company owns 82% of the Jinfeng gold mine in Guizhou Province, southern China. Jinfeng commenced gold production in 2007 and Sino Gold aims to increase Jinfeng's gold production to optimal levels as quickly as possible. The White Mountain project in Jilin Province, northeast China, is now being developed into Sino Gold's next mine. In December 2007, Sino Gold completed the takeover of Golden China Resources Corporation and announced the Eastern Dragon acquisition. Sino Gold is a producing gold company actively pursuing a discovery and acquisition strategy in China. With a "first mover" advantage, it holds a strong competitive position in China. Sino Gold is listed on the Australian Stock Exchange (ASX Code: SGX) and The Stock Exchange of Hong Kong (SEHK Code: 1862). Cautionary Statement on Forward-Looking Information Certain information included in this release, including any information as to future financial or operating performance and other statements that express expectations or estimates of future performance, constitute "forward-looking statements". 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 and Golden China (collectively, the "Companies"), as applicable, are inherently subject to significant business, economic and competitive uncertainties and contingencies. The Companies caution 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 each of the Companies, as applicable, 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; ability to successfully integrate acquired assets; legislative, political or economic developments in the jurisdictions in which the Companies carry 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 the Companies respective statutory releases filed with the Australian securities regulatory authorities and in Golden China's most recent Annual Information Form filed with the Canadian provincial securities regulatory authorities. Each of the Companies disclaim any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as expressly required by applicable law. NONE OF THE TSX, THE ASX NOR THE SEHK HAVE REVIEWED OR ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.

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