Vancouver – With government approvals now in hand, VVC Exploration (VVC-V) has essentially commenced gold production on its Xing Tong joint venture in Shaanxi Province, China.
Issuance of the Xing Tong JV business licence and VVC’s initial US$604,000 investment gives the junior a 60% interest in the gold operation. The company has also taken over operatorship of the Xing Tong mine.
The gold operation consists of 14 adits, five primary mills (with a total 450-tonne-per-day capacity), a secondary 50-tonne-per-day refining mill and a number of exploration permits. The land package covers just under 2,000 hectares in the Tong Guan district, one of China’s richer gold regions.
VVC intends to apply a modern exploration program to the area and upgrade existing mining operations to optimize output.
Gold is hosted in a series of quartz vein systems, which have largely been under-explored. Production has principally targeted the near-surface and more readily accessible mineralized veins on the licence area.
Ore mined at Xing Tong has averaged from 5-8 grams gold per tonne along with amounts of lead, copper and silver which are sold as a separate concentrate. In 2004, the mill processed about 65,000 tonnes of ore averaging 7.5 grams gold.
VVC Exploration, through its Hong Kong-based subsidiary, is earning up to a 70% interest in the project by investing US$5 million in several installments by mid-2007.
The company recently closed a $4-million non-brokered private placement consisting of 4.88 million units (comprised of a share plus a purchase warrant) priced at 82 a piece.
With 32.2 million shares outstanding, the junior gold producer has a market capitalization of $27 million at its recent trading level of 82 per share.
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