Taking on mineral projects in China requires a degree of patience and tenacity few junior companies can muster. Zen International Resources (ZQP-V), which recently doubled the size of its portfolio of Chinese gold projects to four, is under no illusions about the challenges of gaining government approvals for its joint-venture agreements.
“Following the recent reorganization of China’s central government ministries, and the promulgation of implementation regulations concerning China’s new mining law, the approval process for Sino-foreign mineral project joint ventures is expected to become more timely, standardized and transparent than in the past,” notes Zen Chairman Catherine McLeod-Seltzer.
“The company cannot, however, provide any guarantee of approvals of [its] projects.”
That caveat notwithstanding, Zen is forging ahead with plans to secure rights to its newest acquisitions: the Qianhe gold project in Henan province and the Luoding gold project in Guangdong. The former is focused on the Qianhe gold mine, from which 40,000 tonnes with an average grade of 6.8 grams gold per tonne are mined annually.
A preliminary resource estimate of 3.12 million tonnes averaging 11.5 grams gold was calculated for Qianhe; Zen has not yet confirmed this estimate. The company notes, however, that good potential exists, both along strike and to depth, to increase the gold resource. Zen’s joint-venture agreement calls for the company to spend up to US$7 million on exploration and a feasibility study in order to earn a 60% interest.
The Luoding project, covering 3,100 sq. km, includes numerous gold occurrences, ranging from low-grade, bulk-tonnage targets to “extremely high-grade” vein-type showings. Three of these occurrences are believed to have economic potential.
Zen can earn a 60% interest in Luoding through completion of a bankable feasibility study at an initial cost of US$2 million. This can be increased to 90% under certain circumstances.
Zen has been active in China since the mid-1990s, when it signed a joint-venture agreement on the Lingnan gold project. The company can earn 51% of Lingnan by conducting exploration and completing a feasibility study.
The company says the deposit is estimated to contain 7 million tonnes with an average grade of 2.8 grams to a depth of 400 metres. Of this total, 5 million tonnes are amenable to open-pit mining.
Zen sees plenty of upside at Lingnan, as three previously drilled deep holes indicated the possible extension of known mineralization into a wider, higher-grade lens at depth. Potential also exists to expand mineralization along an untested strike extension.
Because of the high potential of this region, the joint-venture agreement is being re-negotiated to incorporate several neighboring mines. Zen states that the Lingnan project agreement will be submitted for approval once re-negotiations are complete. The company also intends to submit its two newest projects for appropriate authorities for approval shortly.
Zen’s fourth project in China is the Zijinshan project in Fujian province, which hosts the Purple Mountain gold-copper deposit.
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