EXPLORATION 1997 — Minco excited by China’s grassroots potential

Having raised $7.6 million through a public offering of special warrants, Minco Mining & Metals (MMM-V) is proceeding with exploration of its gold and copper projects in China.

Under an arrangement reached with Teck (TEK-T) and Cominco (CLT-T), which together hold 12% of the junior, Minco’s past efforts have focused on existing, vein-hosted gold deposits near Beijing.

But recent work suggests the best potential — in terms of both mineral prospects and land acquisition — lies in the mountains of West Tian Shan, a vast, unexplored tract in northwestern China.

“We are planning a major push into that area,” says Colin McAleenan, vice-president of exploration, who just returned from West Tian Shan. “We feel the area has tremendous potential.”

Minco holds the exploration rights to about 36,000 sq. km in West Tian Shan, where the same geological terranes that host the Kumtor gold deposit in Kyrgyzstan and the Muruntau deposit in Uzbekistan cross the border into Xinjiang province.

McAleenan says remote sensing, an important exploration tool in this desert-like region, has uncovered large areas of oxide alteration that may be associated with major gold deposits.

He added that securing final property agreements — a notoriously difficult task for foreign mining companies in China — may be easier in Xinjiang because it is an autonomous region.

Minco plans to launch a major reconnaissance program in West Tian Shan this April in the hope of finding gold mineralization associated with the oxide alteration apparent on satellite images.

McAleenan is also excited about gold and porphyry copper prospects in Sichuan province, where the company has the right of first refusal on all of the properties held by the Ministry of Geology and Mineral Resources.

He is less forthcoming about the known, high-grade deposits held under a co-operative partnership, known as Huajia, between the Chinese Ministry of Metallurgical Industry (MMI) and Temco. The former is a joint venture held 60% by Minco and 40% by China Clipper Gold Mines (CXX-A).

Temco can earn a 55% interest in Huajia, which operates the Emporer’s Delight gold-silver project and is expected to acquire and explore other gold properties.

Emporer’s Delight lies just north of Beijing and along the same structure that hosts the producing Guzhigou and Jiangshan gold-silver-polymetallic deposits. Although local explorationists have concentrated on the high-grade potential of the property, Minco believes Emporer’s Delight has the potential to host large-scale, low-grade gold deposits.

But although Emporer’s Delight has received final joint-venture approval, Temco’s other gold targets, including Stone Lake and Crystal Valley, are held under a “co-operation agreement,” which simply sets out the terms by which a joint venture would be formed.

“We will not be committing large dollars to those projects until we have a final agreement,” says McAleenan.