Location:
Location Map
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The Song Jiaguo Property is located on the Jiaodong Peninsula in Muping County, the Shandong Province, the People's Republic of China.
The property lies on the western edge of the Muping-Fushan Gold Belt, which hosts 20% of the known gold deposits on the Jiaodong Peninsula.
Gold production from the entire peninsula accounts for over 25% of China's annual gold production, presently estimated to be 288 tons or 9.3 M ounces.
Gold deposits in the belt are commonly controlled spatially by fault zones.
To the south of the property, the Pengjiakuang Gold Deposit (>650,000 oz) occurs in the same structural environment within Cretaceous Laiyiang conglomerates which underlie the Song Jiaguo Property.
Project Highlights:
Visible gold in DDH SJ05-11
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- Situated in a well-known Gold Belt
- Existing NI 43-101 Resource Estimate (2.5 M ounces)
- In production - 1,400 tpd operation
- Mill expansion program underway = an increase in production within six months
- Contract mining = low production cost
- Management with proven track record
- Excellent entry point = low market cap
Geology and Mineralization:
Gold mineralization on Song Jiaguo is hosted by a series of steeply dipping, sub-parallel north-northeast trending fault zones within upper Cretaceous conglomerates overlying Proterozoic granitic rocks. The area of Song Jiaguo is interpreted as being the higher levels of a mesothermal system where gold bearing fluids have mineralized the matrix of the host conglomerates. The gold bearing quartz veins would then likely continue to much lower levels in the system.
Chinese estimates of 1.7 million tons at 6.76 grams per ton are reported from the high-grade fault zones to depths of 250 metres. Mineralization remains open to depth and indications in drill holes are that it continues for over 100 metres down dips. Pilot mining by Muping Gold Mines at 120 tons per day accesses the ore from four underground levels.
The potential at Song Jiaguo lies at depth and in sub-parallel structures to the known resource which remain to be tested and in the low-grade bulk tonnage potential within the matrix of the host conglomerates.
2004 Exploration Program:
- 541 metres of channel samples in 4 cross cuts
- Average 1.5 g/t over 95.4 metres (incl. 2.6 grams/tonne over 47.5 metres)
- Results indicated bulk-mineable target
2005 Exploration Program:
- 26 holes drilled with an aggregate length of 6,558 metres
- Tested near-surface and down-dip extension of near-vertical, high grade mineralized fault zones
- Large area of gold mineralization confirmed 550 metres long, 500 metres wide, and up to 600 metres deep
- Initial resource estimate delivered 400,000 ounces with limited data
2006 Exploration Program:
- 9 holes drilled on surface totaling 3,700 metres (infill)
- Channel sampling L1 and L2
- Underground drilling (1000 metres) all levels
- Prepared detailed geological / structural model
- NI 43-101 Resource Estimate completed (April 26, 2006)
Click to view drill results table
2007 Exploration Program:
- Trenching program to test the grades and widths of the gold mineralization on surface
- 5,000 metres of surface core drilling to further delineate near surface gold mineralization
- Updated NI 43-101 Resource Estimate increasing ounces by 285 percent to 1,174,460 ounces from 413,900 ounces (April 26, 2006)
Pilot Mining/Bulk Sampling commenced - 300 tpd
First concentrate shipped to smelter
Knelson Concentrator, truck scale and other QA/QC equipment installed
2010 Mining Operations and Future Plans:
- Revised NI 43-101 Resource Estimate - represent in excess of a 138% increase in the tonnage and a 112% increase in contained gold in the Indicated category and a 15% increase in tonnage in the Inferred category but a 228% increase in Contained ounces.
- Acquisition of the remaining 40% of Song Jiaguo Project pending
- Pre-feasibility study underway
- Mill expansion program underway = increase in production within six months
Click to view 43-101 results
NI 43-101 (2010)
The revised estimate represents in excess of a 138% increase in the tonnage and a 112% increase in contained gold in the Indicated category and a 15% increase in tonnage in the Inferred category but a 228% increase in Contained ounces.
Method |
Category |
Tons* |
Grade AU (g/t)** |
Contained oz AU |
Kriging |
Indicated |
24,929,869 |
1.251 |
1,002,694 |
Kriging |
Inferred |
28,133,107 |
1.883 |
1,703,174 |
Inverse Distance 2 |
Indicated |
23,665,831 |
1.280 |
973,919 |
Inverse Distance 2 |
Inferred |
26,089,673 |
1.762 |
1,477,970 |
Nearest Neighbour |
Indicated |
21,408,861 |
1.531 |
1,053,804 |
Nearest Neighbour |
Inferred |
24,190,043 |
2.430 |
1,889,879 |
* Calculations conducted using 0.4 g/t cutoff
** Gold grades were capped at 40 g/t
The current report updates the 2007 Songjiagou estimate and takes into account assay results from surface core drilling and trenching that were carried out since 2007, as well as depletion from surface mining since the time of the last estimate. Depletion attributable to underground mining during the same interval has been negligible.
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