VVC revs up Chinese mine

Vancouver — The Chinese government has given the go-ahead to VVC Exploration (VVC-V) to start producing gold at the Xing Tong joint venture in Shaanxi province.

The junior will operate the mine, in which it has a 60% interest.

The mine consists of 14 adits, five primary mills (total capacity: 450 tonnes per day), a secondary 50-tonne-per-day refining mill, and several exploration permits. Xing Tong comprises 20 sq. km in the Tong Guan gold district.

Gold is hosted in a series of quartz vein systems, which warrant further exploration. Production has targeted the near-surface and more readily accessible mineralized veins.

Ore averages 5-8 grams gold per tonne, plus lead, copper and silver, which are sold separately as concentrates. In 2004, under a different ownership structure, the mill processed 65,000 tonnes averaging 7.5 grams gold.

VVC, through its Hong Kong-based subsidiary, is earning up to a 70% interest in the mine by spending US$5 million in several instalments between now and mid-2007.

The company recently closed a $4-million non-brokered private placement of 4.9 million units priced at 82 apiece. A unit consists of a share and a purchase warrant.

The junior has 32.2 million shares outstanding and recently traded at 82.

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