Jinshan Gold achieves producer status

Vancouver – Jinshan Gold Mines (JIN-T, JINFF-O) has started commercial production at its Chang Shan Hao (CSH 217) open-pit gold mine in the Inner Mongolia region of northern China.

The first 500-oz. dor bar has been poured at the mine Jinshan expects will produce 120,000 oz. gold per year once operations are ramped up over the next few months. Heap leaching commenced a couple of weeks ago.

We now have a proven development track record to support our growth strategy in Asia, stated Jinshan president Jay Chmelauskas.

Capital expenditures of about US$31.2 million were borne to build the mine.

Operations will focus on recoverable proven and probable reserves of 66.7 million tonnes grading 0.75 gram gold per tonne in the Northeast zone of the open pit model. A waste-to-ore strip ratio of 1.07-to-1 was tabled in the engineering study over the mines initial estimated 9-year lifespan.

The mine plan sees a heap leach processing rate of 20,000 tonnes per day with run-of-mine ore being delivered to the leach pad in the first two years. Planned construction of a three-stage crushing plant in year two will process the mainly sulphide ore from year three onwards.

Average cash costs of about US$253 per oz. gold are projected over the nine year operating plan.

Jinshan recently engaged an engineering study to boost the mines output to 180,000 oz. annually. The study will look to incorporate the Southwest zones measured and indicated resource of about 32 million tonnes at 0.86 gram gold into the mining plan.

Jinshan owns 96.5% of the mines operating company, Ningxia Pacific Mining, with the remainder held by Brigade 217 of the Northwest Geological Bureau.

The new gold producer is also exploring its Dadiangou gold project in central Chinas Gansu Province.

Ivanhoe Mines (IVN-T, IVN-N) owns about 43% of Jinshans shares.

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