Pacific Minerals earns 55% of 217

Vancouver — To date Pacific Minerals (PMZ-V) has earned a 55% interest in the 217 Gold project in northern China. The junior is also in the midst of a 5,000 metre drill project on the prospect.

After providing US$250,000 in capitalization, Pacific Minerals has earned a 55% interest in the joint venture company Ningxia Pacific Mining which now holds the rights to the 217 Gold project. Pacific Minerals stands to earn a total of 96.5% interest in the 217 Gold project by paying US$750,000 over three years. The junior’s joint venture partner, Brigade 217 of Northwest Geological Bureau, China Nuclear Industry, completed the transfer of all permits governing the 217 project to Ningxia Pacific Mining.

In addition, the Chinese Ministry of Lands and Resources has granted Ningxia Pacific Mining a new exploration license over the 36 sq. km area that hosts the 217 project.

The 217 Gold project is covered by a 36-sq.-km exploration permit near the southeastern border of Mongolia. The property is accessible via paved and gravel roads linking the city of Baotou, which is served by daily flights to Beijing. The project has an ample supply of electricity and is near several large freshwater lakes, as well as a rail line, 60 km to the east.

Gold mineralization at 217 is hosted by Proterozoic-aged, carbonaceous slates which have been highly deformed and intruded by a series of granitic plutons. Mineralization remains open to the west and at depth. Work by the previous operator included 65 trenches totalling 2,600 metres plus 10 widely spaced holes (2,800 metres). All of the holes intersected gold mineralization. The best assayed 1.28 grams gold per tonne over 273 metres from the surface.

A 5,000-meter drill program is now well underway at the property. A total of 24 holes, or 4,300 metres will test the Northeast gold zone while the remaining 700 metres will test several new geophysical targets to the south. The Northeast gold zone, is 1,600 metres long and up to 200 metres wide and which forms part of a larger mineralized zone that has been traced in outcrop for 4,000 metres.

The drilling is part of a joint venture agreement between Pacific Minerals and Ivanhoe Mines (IVN-T). Pacific Minerals is required to spend US$1 million of Ivanhoe’s private placement on exploration of the 217 Gold property. Once it has done so, Ivanhoe will have a first option to acquire a 60% interest in the property by completing a feasibility study. Pacific Minerals’ holding, once exercised, will be converted to a 36.5% carried interest. Ivanhoe will be able to increase its stake to 76.5% by arranging financing to take the property into production. As a result of this option, Pacific Mineral’s interest will be reduced to a 20% carried interest, which will be subject to Ivanhoe’s right to recover its capital and carrying costs from production revenue.