Minco Mining Closes $6.37 million Financing

Vancouver — Minco Mining & Metals (MMM-V) has closed its bought deal financing led by Toronto-based Octagon Capital. The junior will put the money towards exploring its projects in the People’s Republic of China as well as the acquisition of further mineral properties and for general corporate purposes.

The offering consists of 3.7 million units at a price of $1.70 per unit for total proceeds of $6,37 million. Each unit consists of one common share and one-half of one common share purchase warrant. Each whole warrant can be exercised at any time for a period of two years from the closing date to acquire one common share at a price of $2.15.

In addition, Minco has entered into an amendment agreement with regard to the original joint venture contract with Baiyin Non-Ferrous Metal Cooperation (Baiyin). The amendment will stop the earn-in process on the White Silver Mountain project, situated in Baiyin City, Gansu, China. To date, Minco has earned a 61% equity interest on the project and will not spend any more money until base metal prices improve.

Subsequently, Baiyin and Minco have agreed to focus on other precious metal projects in China, specifically on the Anba gold project. In early November, Minco signed several agreements with Gansu Provincial government and two other companies to acquire a 40% equity interest in Yangshan Gold Mining, (YGM), which will acquire a 100% interest in the Anba gold deposit in the Yangshan gold field. YGM will acquire the full interest for US$6 million. It is required to make an initial payment of 40%, or about US$2.4 million. The remaining 60%, US$3.6 million will be paid over a five year period.Minco’s subsidiary will be the largest shareholder in YGM and will have the right to appoint the President.

The Yangshan Gold Field is located in the central part of famous west Qinling gold belt which hosts numerous Carlin-style gold deposits with total proven gold resources of over 16 million ounces.

The Anba deposit is located near the middle of the Yangshan gold field. Gold mineralization occurs in two principal vein groups and is hosted in granite porphyry and calcareous phylite. Total resources, based on grid drilling and trenching were estimated by the Gansu Provincial Government at 16.1 million tonnes averaging 5.64 grams gold per tonne.

Minco also recently inked a deal with No.2 Exploration Institute of the Gansu Bureau of Geological Exploration (GBGE) for the exploration and development of mineral resources in the south Gansu Province.

Minco and GBGE intend to establish a new sino-foreign joint venture company to explore for gold in three areas held by GBGE. These project areas are known as Guanniuwan, Hongyanggou and Guojiagou. Minco has right to earn 75% equity interest in all three projects through the joint venture. Total initial investment will be about US$960,000, 75% of which will be contributed by Minco and 25% contributed by GBGE.

The three areas, Guanniuwan, Hongyanggou, and Guojiagou, are all located in the Yangshan Gold Field. The Guanniuwan license area covers the west strike extension of the Anba gold deposit and east strike extension of the Xinguan gold area. The Xinguan gold area to the west is reported by GBGE to include a resource of 550,000 oz gold averaging 4.67 grams gold. This resource is specifically excluded from Minco’s license. The Guanniuwan area is situated between these two areas in the center of a very large, 100 sq. km regional geochemical gold anomaly.

The Hongyanggou license area is situated at the north end of the Xinguan gold deposit and also hosts part of a major geochemical gold anomaly. Initial, early stage field investigation by the existing owners resulted in the discovery of two previously unknown gold showings on the property. No further exploration work has been done since GBGE shifted all its exploration efforts to the Xinguan gold deposit itself.

The Guojiagou is located on the northeast part of the Yangshan gold field. Strong geochemical gold, lead, zinc and silver anomalies were defined during a regional stream sediment sampling program. A follow-up soil sampling program lead to the discovery of a gold zone measuring 6-to-7 metres wide with samples averaging 10grams gold per tonne.

Minco is also in the process of registering several exploration permits covering a 600 sq. km area in the Yangshan gold field. The applied areas have the identical geological and structure settings as the Anba gold deposit and cover several major regional gold anomalies.