Inter-Citic adds ounces at Dachang (December 26, 2005)

Inter-Citic Minerals (ICI-V, ICMTF-O) has unveiled the first resource estimate for the NR-2 fault zone on the 391-sq.-km Dachang gold project in China’s Qinghai province.

The zone is estimated to contain inferred resources of 1.3 million tonnes running 5.8 grams gold per tonne, for around 238,000 contained ounces. The figure is based on surface trenching and 1,747 metres worth of shallow diamond core drilling in 13 holes. The holes were sunk 200 metres apart on cross-sections along the structure.

NR-2 is one of three anomalous areas in the North River district (one of six districts at Dachang), and one of 22 priority gold-in-soil anomalies that traverse the property along a 22-km strike.

So far, the near-vertical NR-2 fault structure has been traced over 800 metres of strike to depths of up to 200 metres. It remains open at depth and along strike to the west.

Highlights from the latest batch of holes include:

– hole 17 — 17 metres averaging 2.7 grams gold per tonne, 4.5 metres of 7.1 grams gold;

– hole 19 — 1.5 metres of 3.3 grams gold;

– hole 24 — 2.2 metres of 12.6 grams gold; and

– hole 29 — 8.1 metres of 4.7 grams gold, and 2 metres of 6.25 grams.

Hole 23 was abandoned at the south edge of the zone after cutting 1.7 metres grading 1.6 grams gold. Six of the holes failed to return significant gold values, with three of these believed to have tested below and to the west of the structure.

The recent drilling followed up on mineralization encountered by hole 15, which returned 7.1 metres of 7.6 grams in late 2004. Earlier this year, hole 16 yielded 8 metres running 6.5 grams gold.

Inter-Citic says the drilling is outlining a west-plunging zone of gold mineralization hosted by highly deformed sediments caught up in the fault.

The Dachang East anomaly, 10 km to the southeast, is home to an inferred resource of 5.7 million tonnes grading 7 grams gold, for 1.3 million contained ounces.

Meanwhile, 3 km to the west on the NR-1 anomaly, four holes totalling 774.2 metres are highlighted by a 9-metre section of a fault zone averaging 1.1 grams gold. The limited drilling tested one of two fault structures. A third anomaly in the district remains untested.

Inter-Citic can take a 90% stake in Dachang, along with the less explored Zalantun property, by spending $5 million by the end of 2006. The projects 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.