Inter-Citic’s private placement will go into the ground

In an effort to finance further exploration at its prize property in China, Inter-Citic (ICI-V) announced a private placement on Tuesday.

The non-brokered placement is for up to 485,000 units at a price of $1.10 per unit for proceeds of $533,000.

Each unit will consist of one common share and one-half common share purchase warrant. Each full warrant entitles the purchaser to one common share at a price of $1.45 at any time within 18 months from the date of issuance.

Inter-Citic’s vice-president of corporate communications Stephen Lautens says the funds will be used to intensify drilling at the company’s Dachang property in western China. Lautens says the money would be sufficient to, “get us through to the end of this year and hopefully well into the first quarter (of 2006).”

Based in Toronto, Inter-Citic is a gold pure-play with two exploration projects in China.

Lautens credits Inter-Citic’s unique position of owning its two properties and gaining a right of first refusal on any future gold projects in the Qinghai province, to the long-standing relationships the company has developed within China over the last seven-years.

Dachang, along with the less explored Zalantun, were acquired in 2003 as part of a partnership agreement with both the Beijing Geological Institute and the Qinghai Geological Survey Institute bodies responsible for licensing mining concessions and collecting geological data.

“We have mutual respect and mutual interests,” Lautens says of Inter-Citic’s strong relationship with its partners.

Inter-Citic has the opportunity to gain a 90% stake in the projects it currently has 83% — if it invests $5 million by the end of next year. Lauten says the company is on track to meet that target.

James Moore, president and chief executive of Inter-Citic, says Dachang’s sediment-hosted gold deposit contained within approximately 391 sq. km is something to get excited about.

“We’re on a new gold belt,” Moore says, “in an under-explored part of the world.”

Lautens explains that the resource was discovered when local Tibetans the area is near modern day Tibet complained to government authorities about local Muslims artisanal activities. When the government came to remove the artisans it panned the streams and found indications of a resource.

Dachang’s current inferred resource of 5.7 million tonnes of ore with a grading of 7 grams of gold per tonne for roughly 1.3 million oz. of gold, was arrived at by Inter-Citic’s Chinese partners’ drilling in 2003. The inferred resource resides on only a small portion of the property .

Moore says the 1.3 million oz. number will go up and pointed to 22 recently discovered gold soil geochemical anomalies that traverse the property along a 22-km strike.

With roughly $1.7 million in cash after the placement Inter-Citic has the funds to drill 15 holes at three of the most promising anomalies by the end of this year.

“And 2006 will see a far more extensive drill program,” Moore says.