The government of China has issued a business licence to the Yingezhuang gold mining company — a 50-50 joint venture between Asia Minerals (AMP-A) and state-owned Zhaoyuan Gold.
The licence will enable Asia Minerals to begin an expansion project at the Yingezhuang underground gold mine in Shandong province.
Annual production over the next two years is expected to increase incrementally to 91,000 from 14,500 oz. Cash costs during this time are expected to fall to US$142 from US$210 per oz.
Asia Minerals’ total commitment in the joint venture over the next three years is US$36 million. Zhaoyuan is investing an equivalent amount in the form of the existing mine facilities and geological resource.
A positive feasibility study, completed in early September, projected a mine life of 11 years (T.N.M., Sept. 22/97). The study applied an average gold price of US$330 per oz. until mid-1999, after which, US$375 per oz. was assumed.
Proven and probable reserves in the No. 2 zone are estimated at 6.7 million tonnes grading 3.55 grams gold per tonne, equivalent to 764,203 contained ounces. Total resources within the No. 1 and No. 2 zones are 15.7 million tonnes grading 3.34 grams gold.
Mineralization at both deposits remains open along strike and downdip, which will be tested by drilling in 1998.
Stope definition will begin in the same year, with ore being mined by conventional and transverse long-hole methods.
Meanwhile, the company will attempt to elevate the known resources to the reserve category.
Geologically, Yingezhuang is a structurally controlled, hydrothermal deposit hosted by a porphryritic granodiorite of Mesozoic age. Gold mineralization is associated with pyrite, allowing for conventional milling and Merill-Crowe recovery methods.
Gold recovery rates are anticipated at 93%. Asia Minerals is 41%-owned by Royal Oak Mines (RYO-T).
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