Jinshan Gold Mines Inc. (TSX: JIN) is pleased to provide an update regarding activities at the Dadiangou Project in Gansu province, China. Crews are presently on site and a newly rehabilitated access road has now reached the property. Preparations are well underway for the planned 5,000-metre drill program to commence in January, 2007.
Gold mineralization at Dadiangou has been previously defined by the Chinese partner over a strike length of 1.8 kilometres through trenching and underground workings and is reported to average approximately 1.5 grams per tonne gold over widths of up to 40 metres. Jinshan's planned drilling program will be the first time the Dadiangou Project has been drill tested, and the first time the mineralized zone will be tested at depths greater than 50 metres below surface.
"We have been extremely pleased with the recent progress at Dadiangou" said Jinshan's Vice President of Exploration, Keith Patterson. "Our people are on site and our Chinese partner, the Northwest Industrial Nuclear Economic Technical Company, has established the necessary infrastructure to begin drilling. Work crews are on the property upgrading the site access, rehabilitating the underground workings, and surveying the surface trenches and underground sampling."
The initial drill program is designed to delineate shear-zone hosted gold mineralization that was previously identified by underground sampling and surface trenching in the central zone at Dadiangou by our Chinese partner. In addition to drilling, Jinshan plans to conduct a thorough review of the entire project area with particular focus on known shear zones parallel to the Dadiangou zone and along strike extensions to the central zone.
The Dadiangou gold system is located in the central part of China in Gansu Province within the prolific Qinling Fold Belt. The license covers approximately 15 square kilometres and is owned by the Northwest Industrial Nuclear Economic Technical Corp. (part of the Shaanxi Nuclear Geology Bureau of China).
Work to date at Dadiangou by the Chinese partner has consisted of surface exploration through mapping, trenching and underground exploration totaling approximately 1.6 kilometres of adits and crosscuts. This work has defined gold mineralization over 1.8 kilometres strike length in the central zone. The Chinese partner reports that the zone extends along strike to over three kilometers. Jinshan has re-analyzed over 1,000 pulps from sampling of the underground workings and found the results to compare favourably with earlier work by the Northwest Industrial Nuclear Economic Technical Corp. To date, only about one third of the known mineralization at Dadiangou has been tested by the underground work and only 52.5 metres have been tested in the vertical direction. The untested areas along strike and below the current workings offer excellent potential to grow Dadiangou into a significant, bulk-tonnage gold deposit.
The joint-venture agreement with the Northwest Industrial Nuclear Economic Technical Company (the Chinese partner) allows Jinshan to earn a 71% interest in the joint venture by incurring exploration expenditures of US$3.3 million and by making payments to the Chinese partner of US$1.3 million. Jinshan can further increase its ownership in the property to a minimum of 80% by conducting additional property expenditures of US$2.8 million, which include payments to the Chinese partner of US$0.3 million. The Chinese partner then can choose to participate at a 20% level for all further development and capital expenditures, or be diluted.
Keith Patterson, M.Sc., P.Geo., a Qualified Person as defined by National Instrument 43-101, has supervised the preparation of technical information in this release and will oversee all aspects of the planned exploration at Dadiangou.
Jinshan is a Canadian mining company focused on the development of the CSH (217) Gold Mine where commercial production is expected to begin in the second quarter of 2007. In addition, the company is actively exploring its portfolio of high-quality gold exploration properties and continues to evaluate additional gold opportunities in China.
Forward-Looking Statements: Statements in this release that are forward-looking statements, including the commencement time for the 5,000 metre drill program, Jinshan's planned review of the entire project area and the potential to grow Dadiangou into a bulk tonnage gold deposit are subject to various risks and uncertainties concerning the specific factors disclosed under the heading "Risk Factors" and elsewhere in the company's MD&A, financial statements and other periodic filings with Canadian securities regulators. Such information contained herein represents management's best judgment as of the date hereof based on information currently available. When used in this document, words such as "could", "planning", "estimate", "expect", "intend", "may", "potential", "should", and other similar expressions are forward looking statements. The company does not assume the obligation to update any forward-looking statement.