Dachang Gold Project
Inter-Citic's Dachang Gold Project is a 279 km2 property in the Qinghai Province of Western China. It is a newly-discovered and extensive sediment-hosted system of at-surface gold mineralization on an under-explored district. Inter-Citic has now completed its 7th year of advanced exploration at Dachang.
The currently defined NI 43-101 resource at Dachang (reported on June 19, 2012) consists of an estimated Measured and Indicated inventory of 2.20 million ounces contained gold (22.52 million tonnes grading 3.04 g/t Au), plus a further Inferred mineral resource estimate of an additional 2.18 million ounces contained gold (25.91 million tonnes grading 2.62 g/t Au). This inventory of mineral resources for the Dachang Gold Project has been updated by the Company with the results from the 2011 exploration program with a total of 25,003 meters of drilling in 317 diamond drill holes and approximately 21,000 metres of surface trenching. Since 2004 Inter-Citic has drilled 1,362 diamond drill holes totaling 174,000 m and has excavated and sampled 1,108 trenches totaling more than 109,000 linear metres.
Dachang Estimated Mineral Resources at June 1, 2012
2011 Exploration Program
A 25,000 metre drill and trenching program was announced as underway on August 8, 2011 and was completed in December. Assay results fromthe final approximately 25,000 m of drilling and 21,000 m of trenching have been reported in the press releases below.
Exploration in 2011 continued in the Acadia, 861/XP, and NR-1 Zones, as well as new work off the eastern end of the current Dachang Main Zone, where a gap between known mineralization extends for approximately 4 km under thicker overburden. On the far side of the gap soil geochemistry has shown a significant number of large gold soil anomalies in the South East Area Zone, which the Company believes is likely the continuation of the Dachang Main Zone mineralization not visible under the gap’s heavier soil cover.
First results were reported on December 5, 2011. On December 12, 2011 results of drilling and trenching were reported for the 861/XP Zones, which now appear to be part of the same system and extend over a 2.8 km strike. A map of drill and trench results on 861/XP can be seen here. The third set of drill results from the 2011 exploration program were reported on January 10, 2012. The fourth set of drill results were reported February 6, 2012.and final results on February 14, 2012. Trenching results outlining the extension and definition of the XP/861 Zones was reported on March 27, 2012.
The press release reporting the updated estimated mineral inventory at Dachang was released on June 19, 2012.
Click on the map below to see a larger PDF version (7.6MB PDF) showing 2011 and before drill hole locations.
On March 22, 2011, Inter-Citic announced the appointment of China Nerin Engineering Co., Ltd. to complete a Chinese-Standard Feasibility Study, (“CFS”) a Mineral Resources Development and Utilisation Program and the associated Project Application Report, for our Dachang Gold Project. Nerin is one of China’s largest engineering companies, and an internationally accredited Level 1 Design Institute, based in Nanchang. They have extensive experience in all forms of engineering design and construction management, and have acted as the design engineers for numerous mine projects worldwide, including Eldorado’s Jinfeng Gold Mine in Guizhou Province (approx 200,000 oz gold per year), plus numerous other mine, mill and smelter designs, both in China and in other countries worldwide. The engagement of a recognized and accredited Chinese engineering company like Nerin to complete a Chinese-Standard Feasibility Study is a requirement and major milestone to advance a gold project in China towards development and production.
On February 28, 2012, Inter-Citic announced the further renewal of exploration licenses by the Chinese government for the Dachang property.
2010 Exploration Program
A 26,000 metre drill program was announced on July 8, 2010, targeting new areas of exploration on previously identified gold anomalies. Drilling in 2010 has focussed on areas well to to the north of the Dachang Main Zone resource area, including the highly prospective "Acadia Zone". Click here to see a high-resolution location map for 2010 drill holes (PDF - 7.2 MB). Exploration in 2010 resulted in a new NI 43-101 resource estimate (calculated at June 28, 2011) of an estimated Measured and Indicated inventory of 1.88 million ounces contained gold (17.2 million tonnes grading 3.41 g/t Au), plus a further Inferred mineral resource estimate of 1.93 million ounces contained gold (21.3 million tonnes grading 2.83 g/t Au). A new independent Technical Report prepared by Micon International under NI 43-101 was filed on June 30, 2011. The updated NI 43-101 Technical Report added approximately 409,000 oz. gold to the previous estimated Inferred resource inventory at Dachang.
The Acadia Zone lies along the dominant Carbonate Thrust Fault that transects the property, and represents the first time gold mineralization has been found in a new host rock. On November 23, 2010, Inter-Citic released results that intersected near-surface gold mineralization in all 46 exploration drill holes including numerous drill holes in the Acadia Zone.
The first set of drill results from the 2010 exploration season at Dachang included a drill hole on the DMZ-X with 13.0 metres averaging 4.9 GPT gold and a new trench with 16.0 metres at surface averaging 8.18 GPT gold. Earlier in 2010, Inter-Citc released results from the first hole from the 2010 drill season at Dachang on the newly-discovered Acadia Zone. Drill Hole CJV-924 returned results that include 7.0 metres averaging 1.37 GPT gold, plus 10.0 metres averaging 5.62 GPT gold, which includes an interval of 3.0 metres of 12.0 GPT gold.
The second set of results released from the 2010 drill program announced that all exploration drill holes reported intersected gold mineralization, many intersecting multiple intervals. Significant results include numerous drill holes in the Acadia Zone. Drill hole CJV-1064 on the Acadia Zone intersected 32.3 metres of mineralization averaging 1.93 GPT contained gold, including 6.0 metres of 3.83 GPT gold. It also had an additional 11.5 metres of mineralization averaging 0.77 GPT contained gold, and 3.0 metres grading 3.58 GPT gold. According to the Company’s interpretation, the estimated true width of the zone of gold mineralization intersected by drill hole CJV-1064 is approximately 20 metres, including several zones from 6 to 8 metres true thickness that do not change too much in thickness from surface to depth and are separated by short barren intervals. Click here to see a sectional view. Drill hole CJV-1058A, also in the Acadia Zone, intersected 12.3 metres of mineralization averaging 3.01 GPT contained gold. Drill hole CJV-1056 in the Acadia Zone intersected 8.0 metres of mineralization averaging 2.64 GPT contained gold.
The third set of drill results released January 18, 2011, encountered gold mineralization in 41 drill holes in new areas of the property, including the Acadia Zone. Drill hole CJV-1142 in the Acadia Zone intersected 14.0 metres of mineralization averaging 2.15 GPT contained gold. The Acadia Zone has now encountered multiple longer intercepts of gold mineralization increasingly defining a structure very similar to the Dachang Main Zone resource area indicating to the Company a potentially significant new discovery at Dachang.
The fourth and final set of drill results from 2010 released January 26, 2011, continued to encounter gold mineralization in all new areas of the property, as well as a large number of highly mineralized trenches.
Resource Update – June 30, 2011
Based on results from the 2010 exploration program, on June 30, 2011 Inter-Citic published an independent Technical Report under NI 43-101 with an update to its previous mineral resource update at Dachang, adding approximately 409,000 ounces gold to the Inferred estimated resource inventory.
The Technical Report reported a Measured and Indicated inventory of 1.88 million ounces contained gold (17.2 million tonnes grading 3.41 g/t Au), plus a further Inferred mineral resource estimate of 1.93 million ounces contained gold (21.3 million tonnes grading 2.83 g/t Au). .
|Total Measured & Indicated (DMZ)||17.2||3.41||1.88|
A new independent Technical Report for Dachang prepared by Micon International under NI 43-101 was filed on June 30, 2011, and is available here (PDF 4.9 MB).
Zijin Mining Group Makes Strategic Investment in Inter-Citic
On April 20, 2010, Inter-Citic announced the closing of $18.56 MM private placement and strategic investment by Zijin Mining Group Co., Ltd. in return for 16,000,000 common shares of the Company. Zijin is China’s largest gold producer, China’s third largest copper producer, and one of China’s six major zinc producers. It operates the Zijinshan Gold Mine, the largest open pit gold mine in China. It has subsidiaries in over 20 provinces in China and in seven other foreign countries, and is listed on the Hong Kong Stock Exchange (HLSE: stock code: 601899) and the Shanghai Stock Exchange (SHA: 601899.SS) with a market capitalization of approximately $20 billion.
Under the terms of the Agreement, Zijin has a participation right that will enable it to maintain an equity level of up to 19.9% in Inter-Citic. The Agreement also provides that Zijin will not, for 24 months from April 19, 2010 (subject to a change of control or a change of management), vote against management in respect of certain matters set out in the Agreement. In addition, for 12 months from April 19, 2010, Zijin shall not without the prior written consent of the Company sell, transfer, dispose of or otherwise trade, or lend, encumber, transfer or assign for the purpose of short selling, any Shares other than in connection with certain change of control transactions. Zijin has also agreed, for a period of 24 months from April 19, 2010, to a standstill provision under which it will not, among other things, make any offer to acquire securities of Inter-Citic without the consent of the Inter-Citic Board. On November 22, 2010, Mr. Fusheng Lan, Vice Chairman of Zijin Mining Group, was appointed to the Inter-Citic board.
2009 Drill Program
A 25,000 metre drill program was completed in 2009 at Dachang aimed at both infill and resource expansion, as well as a 10,000 metre trenching program across previously identified gold soil anomalies. The first, second, third, fourth and final sets of results from the 2009 drill season have now been reported. A complete table of results can be seen here, along with a location map for all 2009 DMZ drill holes. A step-out hole was reported December 1, 2009 7.5 km to the north-west of the DMZ, which is mineralized and appears similar in geology to the DMZ. Trenching in 2009 has discovered new areas of mineralization.
On January 11, 2010, Inter-Citic announced the discovery of new style of gold mineralization on the Carbonate Thrust Fault, which crosses the Dachang propertyapproximately 9 km from the DMZ. (Location Map - JPG 700K and Area Detail Map PDF - 1.1 MB). A second drill hole near the Carbonate Thrust Fault, CJV-923, was reported on January 25, 2010 approximately 750 m to the east of the previous discovery (Location Map - JPG 70K and Area Detail Map PDF - 420 KB). On March 4, 2010, exploration and infill drill hole results were reported from the Placer Valley Zone.
2009 Preliminary Economic Assessment (Scoping Study) and Resource Update
On August 20, 2009, Inter-Citic filed a new, independent NI 43-101 Technical Report - Preliminary Economic Assessment (PEA or Scoping Study) and Resource Update - Dachang Gold Project (PDF 9.4 M). The highlights were announced in a press release on July 6, 2009. The Scoping Study / Preliminary Economic Assessment was prepared at an early stage to demonstrate positive economics even though exploration continues at Dachang. It was prepared using only the mineralization discovered in the Dachang Main Zone (“DMZ”).
The preferred case reported in the PEA/Scoping Study comprises of an open pit mine on the DMZ delivering 2 Million tonnes per year of ore to a fully integrated flotation, Biox® and CIL circuit which would produce approximately 165,000 oz gold doré per year. Highlights of the preferred case reported in the PEA/Scoping Study includes:
- At a gold price of US$750/troy ounce the Dachang project is estimated to generate an after tax internal rate of return (IRR) in excess of 40% and an after tax project Net Present Value (NPV5) at a 5% discount rate in excess of US$198 million.
- At a gold price of US$800/troy ounce, the after tax IRR increases to 47% and NPV5 exceeds US$241 million.
- Total gold production of approximately 1.5 million ounces is forecast to be generated during a mine life of approximately 9 years.
- Estimated minesite cash operating costs average US$404/oz and project capital cost is forecast to be US$104 million for the complete facilities and all infrastructure.
The scoping study economic model is based upon conceptually scheduling an estimated 17.8 Million tonnes of mineral resources at an average grade of 3 grams gold/tonne. This was derived from pit optimizations generated from using the resource model prepared to update the mineral resource estimate for the Dachang Main Zone (“DMZ”) as reported below. It does not include resources contained in areas such as Placer Valley. Please see the full press release for highlights or the full NI 43-101 Technical Report here: Scoping Study (PDF 9.4 M).
It is important to note that the above PEA and economics do not include the additional approximately 540,000 ounces Au in the Measured + Indicated from the 2009 drill program reported in the 2010 update to the estimated resource inventory.
PEA Resource Estimate (2009)
With the Preliminary Economic Assessment, the Company reported an update to its inventory of mineral resources for Dachang, on July 6, 2009, as follows:
- Estimated Measured and Indicated mineral resources of 12.4 million tonnes grading 3.37 g/t Au (1.34 million ounces contained gold) retaining over 90% from the original Inferred mineral resource estimate.
- Estimated Inferred mineral resources of 11.9 million tonnes grading 3.00 g/t Au (1.14 million ounces contained gold) for the Dachang Main Zone (“DMZ”), and 2.4 million tonnes grading 4.82 g/t Au (0.37 million ounces contained gold) for the NR-2 and other areas, for a total Inferred mineral resource estimate of 14.3 million tonnes grading 3.31 g/t Au (1.52 million ounces contained gold).
Dachang Mineral Resources at July 6, 2009
(Superceded by the 2010 & 2011 Resource UpdateS)
|Total Measured & Indicated (DMZ)||12,400||3.37||1,340|
The full independent technical report dated August 20, 2009, is filed on SEDAR and is available here: NI 43-101 Technical Report - Preliminary Economic Assessment (PEA or Scoping Study) and Resource Update - Dachang Gold Project (PDF 9.4 M). This resource update has been superceded by the 2010 and 2011 estimated resource inventories reported in Inter-Citic's July 19, 2010 press release and June 30, 2011 press release, respectively.
Metallurgy Results Reported:
On March 2, 2009, Inter-Citic reported on first stage metallurgy at Dachang. Results to date demonstrate that high recoveries of gold (96%) can be achieved using conventional flotation methods. The concentrate produced contains 30 g/t gold and is considered to be marketable. Further test work has shown that the rougher concentrate can be upgraded to 57.7 g/t gold through regrind and cleaning stages. This results in an overall recovery of 94% of the gold into a final cleaner concentrate with a mass of only 6.2% of the original.
On May 7, 2009, Inter-Citic reported results from bio-leaching/CIL test work conducted on a bulk flotation concentrate sample from the Dachang gold project. The results showed that high gold leach recoveries of 89% can be achieved by bio-leaching and conventional CIL. Fast leach kinetics were observed with 88.6% of the gold leached into solution after 4 hours. The leach kinetics curves also showed no signs of “preg robbing” occurring. “Preg-robbing” is where the presence of “preg-robbing carbon”, defined as carbonaceous material that preferentially absorbs gold from solution thereby reducing gold leach recoveries. Overall gold recoveries to doré are predicted to be 85%, assuming 96% for the flotation stage, 89% for the BIOX/CIL stage, and 99% for solution/goldroom losses.
Further testwork supervised by Goldfields reported on March 2, 2011, confirmed the previous results and the suitability of the BIOX process at Dachang, and increased predictable overall yields to 87.8% to dore.
2008 Drill Program Results:
Inter-Citic completed a 50,000 metre drill program in 2008. A total of 300 of the 325 exploration drill holes reported gold mineralization. Results have now been released for the complete sets of drill holes drilled in 2008 - June 26, 2008 with MAP (PDF - 1.4 MB) , July 18, 2008, August 7, 2008, September 29, 2008, November 3, 2008, December 3, 2008, January 6, 2009, January 21, 2009, February 4, 2009. and February 17, 2009. A map of all 2008 drill holes can be seen here (PDF- 3.1 MB). A full list of reported results for 2008 can be seen on our Maps & Data page. Up to seven drills operated at Dachang in 2008, working on both infill drilling to further define the existing 43-101 inferred mineral resource estimate on the DMZ in preparation for a scoping study, as well as additional drilling in new areas focused on resource expansion. IP geophysical exploration has further extended the DMZ and discovered new areas of mineralization.
A 28,000 metre drill program was completed in 2007. Click here to see a map of all drill hole locations for 2007, and click here to see all trenches from 2007's exploration season. In 2007, 180 of 187 drill holes reported near-surface gold mineralization in the area of the Dachang Main Zone. As a result, the Company reported an update of its mineral resource on April 10, 2008. A map of the 2008 exploration plan can be seen here (PDF - 2.5 MB).
For full results from the 2007 exploration season and before, please click here.