Mine Acquisition finalisation
November 07 2007 - 7:00AM
UK Regulatory
RNS Number:2065H
China Goldmines PLC
07 November 2007
7 November 2007
China Goldmines plc
("China Goldmines" or the "Company")
Transfer of mines at Guanzhuang Project complete
China Goldmines plc (AIM: CGM), the gold resources company focussed on the
discovery and development of gold projects in the Hunan Province of China,
announces that it has successfully achieved a major milestone in the formal
transfer of all eight producing Gold Mines in the Shenjiaya Prospect into the
Company's possession and 100% control, with all mining permits and licences
in place for it to be an immediate gold producer.
The acquisition of the mines follows the placing of 25,025,416 new Ordinary
Shares of 1p each at 120p per new Ordinary Share (the "Placing") which raised
#30million before expenses for the Company and which was announced on 28
September 2007 and approved at an Extraordinary General Meeting of the Company
on 22 October 2007.
Following the completion of the Placing and the transfer of the mines, the
Company will, as outlined in the Circular to Shareholders dated 28 September
2007, now undertake a three-stage programme for the development and
consolidation of the mines, which will proceed as follows:
Stage 1: Consolidation and Refurbishment (2007 - 2009)
In the first stage of development, the Company plans to:
*Upgrade and modernise the underground conditions, equipment and practices
at each of the mines.
*Increase the underground workforce from 300 to over 750 by the start of
2010.
*Increase the underground development from approximately 120 metres per
month to over 3,000 metres per month during 2009.
Stage 2: Infrastructure Development (2010)
In the second stage of development, the Company plans to:
*Improve the load and haul practices through mechanisation.
*Make further enhancements to communications and ventilation.
*Introduce more modern drilling equipment to increase productivity.
*Construct a processing plant linked underground to all eight of the Gold
Mines. It is the Directors expectation that they may require additional
finance (which may be equity or debt) to complete the construction of the
processing plant.
Stage 3: Mechanised Mining (2011 onwards)
In the final phase of development, the Company plans to:
*Move to mechanised mining at the same time as continuing the level
exploration along the strike length of the ore body and continued vertical
development to explore and prepare deeper mining blocks.
*Construct a vertical haulage shaft and locomotive haulage to underground
crusher and loading stations.
The consolidation of the Gold Mines over the course of 4 years is targeted to
achieve approximately 100,000oz produced per year by the end of 2010 increasing
to approximately 160,000oz per annum once the engineering development programme
is complete in 2011.
On 24 July 2007 the Company announced the resource estimate on the Guanzhuang
Project based on the findings of the Independent Geological Report. This
included a JORC Code compliant Inferred Resource estimate of 5.1 million tonnes
at 11 g/t gold containing 57,000 kg of gold equivalent to 1.8 million oz.
Commenting on the transfer, Frank Vanspeybroeck (CEO), said:
"China Goldmines has successfully achieved its short term strategy to be a
gold producer by the acquisition of 8 producing Gold Mines. We now look
forward to implementing our gold mining development strategy to improve the
logistics of the mines. In order to do so, we plan to work together with
the local communities and existing workforce at the mines, using our combined
expertise to improve the mines and increase their production levels.
"I would also like to welcome on board our new shareholders and thank both
them and our existing shareholders for their support which is enabling the
Company to deliver on its development strategy."
Ends
For additional information:
China Goldmines plc
Frank Vanspeybroeck (CEO) Mobile: +61 41 116 6276
Alec Worrall +44 207 788 7621
Marinko Vidovich (CFO) Mobile: +61 41 997 4744
Changsha Office +86 731 515 8211
Brewin Dolphin Limited +44 141 221 7733
(Nominated Adviser)
Alan Stewart (Corporate Finance)
Parkgreen Communications +44 20 7851 7480
Justine Howarth
Erica Nelson
This information is provided by RNS
The company news service from the London Stock Exchange
END
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