Major increase for Majestic Gold’s Song Jiaguo

Majestic Gold (MJS-V) has more than doubled indicated resources at its Song Jiaguo gold project in Shangdong province, China.

Indicated resources for the open pit mining operation have increased by 138% in tonnage and 112% in contained gold.

Indicated resources were 24.9 million tonnes grading 1.25 grams gold per tonne for 1 million oz. gold – an increase of 138%.

Inferred resources were 28.1 million tonnes grading 1.88 grams gold per tonne for 1.7 million oz. gold – an increase of 15% in tonnage but 228% in contained ounces.

The last resource estimate was done in 2007. This estimate takes into account surface drilling and trenching done since then as well as depletion of mined ore since then.

Majestic says its working on a prefeasibility study for the project with Wardrop Engineering with the goal of expanding the current mine from a 1,400 tonnes per day open pit and underground operation to a 5,000 tonne per day open pit only.

Majestic is also working toward buying the remaining 40% of the Song Jiaguo project

The project is located on the western edge of the Muping-Fushan gold belt which hosts about 20% of the known gold deposits on the Jiaodong Peninsula. Gold production from this entire peninsula accounts for more than a quarter of China’s annual gold production – about 9.3 million oz.

Gold mineralization at Song Jiaguo is hosted by steeply dipping, sub-parallel north-northeast trending fault zones within upper Cretaceous conglomerates overlying Proterozoic granitic rocks.

Majestic shares were up 2¢ today to 19.5¢ on a trading volume of 3.98 million shares.