Afcan begins US$4.5m gold program

At its Tanjianshan gold project in west-central China, Afcan Mining (AFK-T) will spend US$3.5 million on exploration aimed at upgrading inferred resources to the indicated category.

Situated in Qinghai province, the project consists of four contiguous licences covering 342 sq. km.

Afcan has an option to earn 85% of Tanjianshan through the joint-venture company Qinghai Dachaidan Mining. In December 2002, Quinghai submitted a prefeasibility study that calls for construction of an underground mine capable of producing 70,000 oz. gold per year over six years.

In March, Afcan revised the resource estimates for two deposits situated 26 km apart on the property. One of these, Jinlonggou, was found to have an indicated resource of 2.3 million tonnes grading 5.23 grams gold per tonne and an inferred resource of 1.1 million tonnes at 4.9 grams gold. The other deposit, known as Qinlongtan, has an indicated 772,400 tonnes grading 7.49 grams gold, plus 1.1 million tonnes at 4.9 grams gold in the inferred category. The two deposits are estimated to contain an indicated 579,000 oz. gold. The overall resource estimate is based on a cutoff grade of 1 gram gold per tonne.

The Jinlonggou resource estimate was compiled from drilling results, surface trenching and underground channel sampling. Gold values were cut to 25-40 grams per tonne. Previously unrecognized mineralized zones in the underground workings were sampled in 2003, resulting in grades as high as 9.96 grams gold per tonne over a true width of 4 metres. Previous underground sampling was also validated by the collection and analysis of 746 samples.

Mineralized material is concentrated in areas of random faulting and associated breccia zones. A flat-lying structure discovered at the end of the last drilling campaign will be a major target this year.

The Qinlongtan deposit is in a well-defined shoot, open to the north and south and up- and down-plunge. The resource estimate is based on data available to 180 metres below surface. Gold grades have been cut to 35 grams gold per tonne.

In the past, these deposits produced a total of 8,000 oz. gold per year. Last year, the mill operated between April and December, during which time 3,350 oz. gold were produced from stockpiled ore. The recovery from the roasting and standard cyanidation plant was 78%.

Metallurgical tests on sulphide ore, mainly from Jinlonggou, showed that a 90% gold recovery can be obtained using two stages of roasting.

Pyrite is the dominant sulphide associated with gold. The pyrite-to-arsenopyrite ratio is 22:1. Oxide ore accounts for 15% of the ore.

Oxide ore has been treated by heap leaching. A combined indicated resource from four leach pads was calculated, based on 179 drill holes with a nominal spacing of 20 metres, and resulted in an estimate of 592,200 tonnes averaging 1.91 grams gold per tonne.