China Gold International to Increase Gold Production by 95% by 2014; Shares Up 1.5% Mid-Morning

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China Gold International Resources Corp. Ltd. (CGG.TO) today announced the results of a National Instrument 43-101 compliant Technical Report Expansion Feasibility Study for the Chang Shan Hao ( CSH ) Gold Project, located in Inner Mongolia Autonomous Region, People's Republic of China. The Expansion Feasibility Study (EFS) supports a 60,000 tonne per day (tpd) expansion plan, under which the open pit reserves at the CSH project stand at over 213 million tonnes of ore containing about 4.08 million ounces of gold.

Highlights

Gold production to increase by ~95% in 2014 to 260,000 ounces per annum from the current +133,000 ounces per annum;

Open pit reserves: 213 million tonnes averaging 0.59 g/t gold totalling 4.08 million ounces of gold at 0.28 g/t cutoff gold grade;

Measured and Indicated Resources: 262 million tonnes, averaging 0.60 g/t gold totalling 5.05 million ounces of gold at 0.28 g/t cutoff gold grade;

Ore production to increase from 30,000 tpd to 60,000 tpd by August 2013 (~20 million tonnes per annum thereafter;

Life Of Mine (LOM): 11 years;

Estimated LOM capital expenditure: US$213 million;

Operating cost: US$9.83/tonne ore; or LOM US$713/oz of gold;

Undiscounted total LOM cash flow: US$1,253 million;

After-Tax Net Present Value ( NPV ): $642 million at discount rate of 9%;

Internal Rate of Return ( IRR ) on expansion capital: 30.5%



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This article appears in: Investing , Commodities

Referenced Stocks: CSH , IRR , NPV

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