HONG KONG, Jan 25, 2010 - (ACN Newswire) - One of the PRC's leading gold production enterprises, Zhaojin Mining Industry Company Limited ("Zhaojin Mining" or the "Company", stock code: 01818, together with its subsidiaries, the "Group") announced that the Company and Fengcheng Municipal Government of Liaoning Province in the PRC entered into a Framework Agreement on Jointly Developing Fengcheng Gold Resources on 30 December 2009.
Pursuant to the framework agreement, the scope of the cooperation includes gold resources in the southern region of Fengcheng and Baiyun Gold Mine in the northern region of Fengcheng and the gold resources in its surrounding areas. Located in the Liaoning Province of the PRC, Fengcheng region is rich in gold resources. Its gold output volume ranks no. 7 in the PRC. It was also listed as one of the key gold production areas in the PRC and has tremendous potentials for gold resources development. Currently, it has proven gold metal of 70.2 tonnes with an average grade of 6.66 grams per tonne, and prospective gold metal of 470 tonnes. The Company will participate in restructuring of Baiyun Gold Mine, set up the New Company where the Company will hold a minimum equity interest of 51% and depending on the condition of mineral resources, increase its investment by RMB150-200 million to expand the production capacity of Baiyun Gold Mine to 1,000-2,000 tonnes per day from currently 400 tonnes per day. According to the information provided by the other party of the Framework Agreement, Baiyun Gold Mine currently has retained ores of 3.5 million tonnes and gold metal of 11,314 kilograms. In 2009, ore reserves of approximately 2.6 million tonnes and gold metal of around more than 9,000 kilograms were newly obtained in the eastern part of the mining area. As of today, the aggregate ore reserves of more than 6 million tons and gold metal of more than 21 tons have been recorded in Baiyun Gold Mine.
The restructuring of Baiyun Gold Mine is planned to be completed within six months after signing of the Framework Agreement. If the Company succeeds in restructuring Baiyun Gold Mine and establishing the New Company, Fengcheng Municipal Government will exempt some land requisition fees and administrative fees for basic construction of the New Company and will refund some land grant fees, water and soil erosion prevention fees, pollutant charges and charges for water resources. In terms of taxation, the New Company will be exempted from corporate income tax for three years, while resources tax and resources compensation fees will be levied at the same rates as those of similar enterprises of the Company in other areas.
Mr. Lu Dongshang, Chairman of Zhaojin Mining Industry Company Limited said, "Leveraging on the technology and management strengths of Zhaojin Mining and tie in with the geographical location, favorable policies and mineral resources of Fengcheng City, we hope to set up a sizable and highly effective gold enterprise in Fengcheng, Liaoning. The cooperation will lay a solid foundation for the Company's resources consolidation and expansion in Liaoning, thereby maximizing the shareholders' value."
About Baiyun Gold Mine
According to the information provided by the other party of the Framework Agreement, Baiyun Gold Mine, situated in Baiyun Mountain, Qingchengzi Town, Fengcheng City, was established in 1984 as an enterprise directly under Fengcheng Gold Group and is also the first gold mining enterprise in Fengcheng. Following years of development, it has grown into a modernized enterprise integrating the whole chain of mining, processing and smelting, with daily combined production capacity of 400 tonnes, fixed assets of RMB72 million and annual gold output of 11,000 taels (approximately 344 kilograms).
About Fengcheng City
Fengcheng City, located in the eastern Liaodong Peninsula and the eastern Bohai-Rim Economic Circle, a county-level city governed by Dandong City of Liaoning Province with a total area of 5,514 square kilometers, and situated in Liaonan Zhuanghe -Fengcheng Fault. Fengcheng has rich gold reserves and is one of the key gold production areas in the PRC. Its gold output volume ranks no. 7 in the PRC.
Porda International (Finance) PR Company Limited
Ms. Kylie Yeung
Tel: +852 3150 6770
Ms. Ada Leung
Tel: +852 3150 6732
Fax: +852 3150 6728
Jan 25, 2010 08:00 HKT/SGT
Source: Zhaojin Mining
Topic: Press release summary
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