China Gold International Announces Completion and Positive Results of Jiama’s Feasibility Study

January 15, 2014

Measured and Indicated Resources grow by 41% to 1,486 Mt. Jiama’s
NPV(9%) increases to over US$1.3 Billion.

VANCOUVER, Jan. 15, 2014 /PRNewswire/ – China Gold International Resources Co.
Ltd. (TSX:CGG; HKEx: 2099) (“China Gold International Resources” or the
“Company”) is pleased to announce the results of an updated NI 43-101
compliant, Independent Feasibility Study for the Phase II Expansion of
its Jiama Copper-Polymetallic Mine, (“Jiama” or the “Project”) in Tibet
Autonomous Region, China. Mining One Pty Ltd, has produced the NI
43-101 compliant report based on the Phase II Expansion Project
feasibility study, prepared by the Changchun Gold Design Institute in
conjunction with independent consulting engineers and the Company’s

Project Overview

The Jiama Project is a large scale polymetallic (Cu, Mo, Au, Ag, Pb, Zn)
deposit located approximately 68 km east-northeast of Lhasa, the
capital city of Tibet Autonomous Region, along the Sichuan-Tibet
Highway within the Gangdise Copper Metallogeny Belt in Central Tibet,
China and represents one of China’s largest copper-gold mines.

Phase I of the Jiama Project commenced commercial production in
September 2010 and included the development of the Tongqianshan and
Niumatang open pits. These pits currently produce 1.8 million tonnes
per annum (“Mtpa”) of run-of-mine (“ROM”) ore. The ore from these mines
is processed via two processing plants with a combined processing
capacity of 6,000 tonnes of ore per day (“tpd”). The Company plans to
expand the Project production capacity to 50,000 tpd (Phase II plant
capacity) with the addition of a new floatation plant (44,000 tpd ore),
the development of two additional open-pits (Jiaoyan and South Pits)
and the expansion of the underground mining operation. Total production
is planned to increase from its current production rate of 1.8 Mtpa to
16.5 Mtpa of ROM ore. Metal concentrate (saleable product), will be
sold to smelters within China.


(All amounts are presented in US dollars unless otherwise stated)

        --  Copper (Cu) Measured and Indicated Mineral Resources increased
            to 1,486 million tonnes at 0.41% Cu from 1,053 million tonnes
            at 0.44% Cu;
        --  Copper Proved and Probable Mineral Reserves increased to 441
            million tonnes at a grade of 0.61% Cu from 363 million tonnes
            at 0.77% Cu;
        --  Contained copper in the resources increased to 6.138 million
            tonnes from 4.64 million tonnes;
        --  Total production rate is expected to grow to 16.5 Mtpa of ROM
            ore: 9.9 Mtpa from open-pit and 6.6 Mtpa from underground
      o Phase II plant capacity will come online in two stages in 2015 and
      o Ramp up to an annual processing capacity approximating 16.5 Mtpa of
        ROM ore is expected to happen during 2017 and is expected to
        continue until 2039 when the reserves from the open pit mines are
      o After 2039, operations will continue from the underground mine
        until 2049 at an average annual rate of 5.4 Mtpa of ROM ore
        --  At the completion of operations the total recovered metal is
            estimated to be:
      o 5.3 billion pounds of copper ("Cu")
      o 192.4 million pounds of molybdenum ("Mo")
      o 101.3 million ounces of silver ("Ag")
      o 1.5 million ounces of gold ("Au")
      o 828.2 million pounds of lead ("Pb")
      o 314.0 million pounds of zinc ("Zn")
        --  Average annual metal production is estimated to be:
      o 67 thousand tonnes of copper
      o 2.4 thousand tonnes of molybdenum
      o 2.8 million ounces of silver
      o 42 thousand ounces of gold
      o 10.4 thousand tonnes of lead
      o 4.0 thousand tonnes of zinc
        --  Contributions by metal to total sales is: 66.5% copper, 12.7%
            molybdenum, 8.6% silver, 8.3% gold, 3.5% lead and 1.3% zinc.
        --  Estimated life of mine is 35 years;
        --  Estimated capital expenditure is $716.2 million ($1.59 per
            tonne of ore);
        --  Estimated total operating costs are $23.48 per tonne of ore, of
      o Mining costs are $11.50 per tonne of ore
      o Processing costs are $10.06 per tonne of ore
      o Fixed costs are $0.33 per tonne of ore
      o Overhead costs are $1.58 per tonne of ore
        --  A Net Present Value (NPV) of over $1.3 billion with nominal
            cash flow of $5.8 billion after-tax at a discount rate of 9%
            based on metal prices of:
      o $2.90/lb copper
      o $15.5/lb molybdenum
      o $0.98/lb lead
      o $0.95/lb zinc
      o $1,300/oz gold
      o $20/oz silver
        --  After-tax Internal Rates of Return (IRR) of 24.0% with a
            payback period of 6.72 years

Dr. Xin Song, CEO of the Company, commented, “This feasibility study
indicates a significant increase in our resources and reserves. The
Project’s economics are strong with an NPV (at a discount rate of 9%)
of over $1.3 billion and IRR of 24% even when using prudent assumptions
about metals prices. We are planning to grow the project from 6,000 to
50,000 tonnes per day instead of previously announced 40,000 tpd. We
are also planning a longer mine life, close to 35 years. We are very
pleased with the results of this study and the long-term outlook for
this strategic asset.”


The Project is located in the central-south portion of the
Gangdise-Nianqing Tanggula Terrane. Stratigraphy outcropping in the
Project area is dominated by passive epicontinental clastic-carbonate
rocks. Three types of copper-polymetallic mineralization are observed
within the Project, these include skarn, hornfels and porphyry hosted
mineralization. All three styles of mineralization are structurally
controlled with concentrations occurring along shear/structure zones
and mineralization offset by thrust and detachment faults as well as
associated with anticlines and synclines.

The zone of mineralization within fault hosted skarn alteration measures
kilometers in both strike and dip and remains open at depth to the


The Phase II Expansion Project will include two open pits and one
underground mine.

The two open pits are designed to mine all three types of
mineralization, producing approximately 9.9 million tonnes of ROM ore
and removing about 20 million tonnes of waste rock per annum with a
life-of-mine (LOM) stripping ratio of 2.16. The underground mine is
designed to mine the high grade portion of the skarn type
mineralization and will produce approximately 6.6 million tonnes of ROM
ore per annum.

Capex and Cash Flow Analysis

Estimated capital expenditures for the Phase II Expansion of the Project
will be approximately $716 million, including $350 million for
processing and $366 million for mining.

The long term metal prices used for the Feasibility Study are contained
in Table 1 along with sensitivity data. Prices for zinc and lead are
$0.98/lb and $0.95/lb respectively.

The after-tax net present value (“NPV”) is over $1.3 billion with a
discount rate of 9%, giving a payback period of 6.7 years and IRR of
24%. The undiscounted, cumulative net cash flow is approximately $5.8

Table 1: Jiama Copper-Polymetallic Project – NPV and IRR Summary

    |    Long Term Metal Price  |         |         NPV ($ Million)   |   |
    |___________________________|         |___________________________|   |
    |      |      |      |      |         |  0%  |  7%  |  9%  | 11%  |IRR|
    | Cu   | Mo   | Au   | Ag   |         |Disc. |Disc, | Base |Disc. |   |
    |($/lb)|($/lb)|($/oz)|($/oz)|         | rate | rate |Disc. | rate |   |
    |      |      |      |      |         |      |      | rate |      |   |
    |      |      |      |      |Pre-Tax  |$7,406|$2,461|$1,873|$1,438|30%|
    |$2.90 |$15.5 |$1,300|  $20 |_________|______|______|______|______|___|
    |      |      |      |      |After-Tax|$5,785|$1,795|$1,324| $978 |24%|

Mineral Resources Estimate

A Mineral Resource estimate, dated November 20, 2013, has been
independently completed by Mining One Pty Ltd in accordance with the
CIM Definitions Standards under NI 43-101. The Resource estimate is
based on information collected up to November 12, 2012. Assaying and
geological logging and testing of the core subsequent to November 2012
including an extensive drill program conducted in 2013 will be included
in future updates of the Mineral Resources and Reserves.

During the review of the data Mining One Pty Ltd noted that whilst the
mineralization occurs within a single mineralized body, gold and silver
mineralization within the ore body had a significantly higher spatial
variability than the other elements. As a result Mining One Pty Ltd has
classified the Au and Ag resource presented in Table 3 separately; this classification takes into account the proposed large
scale mining techniques where Au and Ag will only be credits to the
overall products from the operations. Mining One Pty Ltd has assumed
that Au and Ag will not be assigned a single cut-off grade for a
selected mining block and will be mined in conjunction with the other

The Mineral Resources are summarized in Tables 2 and 3. The Mineral Resources presented in Table 3 for Au and Ag are inclusive and not in addition to the Mineral
Resources in Table 2 and occur within the same mineralized body.

Table 2: Jiama Project – Cu, Mo, Pb and Zn Mineral Resources

Reported at a 0.3% Cu Equivalent Cut Off Grade*, as of 20th of November,

    Rock               Quantity                      Cu    Mo    Pb    Zn
    Type     Class     Mt       Cu % Mo %  Pb % Zn % Metal Metal Metal Metal
                                                     (kt)  (kt)  (kt)  (kt)

    Skarn    Measured      42.8 0.66 0.041 0.06 0.04   281    17    28    19

             Indicated    453.0 0.69 0.040 0.15 0.09 3,114   183   676   399

             M+I          495.8 0.68 0.040 0.14 0.08 3,395   200   704   417

             Inferred     125.5 0.46 0.038 0.20 0.10   577    47   248   125

    Hornfels Measured      54.9 0.23 0.031 0.03 0.01   127    17    15     5

             Indicated    852.9 0.28 0.030 0.01 0.01 2,368   253    69    64

             M+I          907.8 0.27 0.030 0.01 0.01 2,496   270    84    69

             Inferred     276.6 0.24 0.026 0.02 0.02   660    73    63    49

    Porphyry Measured       2.6 0.26 0.049 0.02 0.01     7     1     1     0

             Indicated     79.9 0.30 0.039 0.01 0.01   240    31     6     8

             M+I           82.4 0.30 0.040 0.01 0.01   247    33     6     8

             Inferred       4.0 0.24 0.085 0.01 0.02    10     3     0     1

    Total    Measured     100.2 0.41 0.035 0.04 0.02   415    36    43    24

             Indicated  1,385.8 0.41 0.034 0.05 0.03 5,772   468   751   470

             M+I        1,486.0 0.41 0.034 0.05 0.03 6,138   503   794   495

             Inferred     406.0 0.31 0.030 0.08 0.04 1,247   124   312   174

Table 3: Jiama Project – Au and Ag Mineral Resources

Reported at a 0.3% Cu Equivalent Cut Off Grade* as of 20th of November,

    Rock Type Class     Quantity (Mt) Au g/t Ag g/t Au Moz Ag Moz

    Skarn     Measured           42.8   0.22  13.39  0.304  18.429

              Indicated         453.0   0.27  15.59  3.901 227.094

              M+I               495.8   0.26  15.40  4.205 245.523

              Inferred          125.5   0.19  11.90  0.750  47.995

    Hornfels  Measured           54.9   0.02   1.32  0.041   2.330

              Indicated         852.9   0.03   1.38  0.909  37.733

              M+I               907.8   0.03   1.37  0.950  40.063

              Inferred          276.6   0.06   2.10  0.562  18.644

    Porphyry  Measured            2.6   0.06   3.42  0.005   0.281

              Indicated          79.9   0.07   2.93  0.174   7.522

              M+I                82.4   0.07   2.94  0.179   7.803

              Inferred            4.0   0.04   2.25  0.006   0.287

    Total     Measured          100.2   0.11   6.53  0.349  21.040

              Indicated       1,385.8   0.11   6.11  4.985 272.349

              M+I             1,486.0   0.11   6.14  5.334 293.389

              Inferred          406.0   0.10   5.13  1.317  66.926

Note: Figures reported are rounded which may result in small tabulation

The Copper Equivalent basis for the reporting of resources has been
compiled on the following basis:

CuEq Resources:

= (Ag Grade * Ag Price + Au Grade * Au Price + Cu Grade * Cu Price + Pb
Grade * Pb Price + Zn Grade * Zn Price + Mo Grade * Mo Price) / Copper

Mineral Reserves Estimate

A Mineral Reserve estimate, dated 20th of November, 2013, has been
independently verified by Mining One Pty Ltd in accordance with the CIM
Definitions Standards under NI 43-101.

The selected mining strategies developed by CGDI (Changchun Gold Design
Institute) consider conventional truck shovel mining for the Jiaoyan
and South open pits. Various mining methods have been examined for the
Phase II Expansion Underground Mine with the primary method being Sub
Level Stoping with fill (Primary/Secondary/Tertiary).

The reserve estimate for the Jiama underground mine is based on a
combination of Sub Level Open Stoping with Paste fill, Room and Pillar
and Cut and Fill. Table 4 presents the Mineral Reserves estimate for the Project (Open pit and
underground mines).

Table 4: Jiama Project Statement of NI 43-101 Mineral Reserve Estimate
as of 20th of Nov., 2012


    Type     Quantity Cu % Mo % Pb % Zn %  Au   Ag   Cu kt Mo  Pb  Zn  Au   Ag
                Mt                        g/t   g/t        kt  kt  kt  Moz  Moz

    Proven     24.96  0.64 0.04 0.05 0.03 0.19 11.35  160  10  12   8  0.2  9.1

    Probable  415.87  0.61 0.03 0.13 0.08 0.19 11.52 2,548 133 551 319 2.5 154.1

    Subtotal  440.83  0.61 0.03 0.13 0.07 0.19 11.51 2,708 143 563 327 2.7 163.2


    1.         The Mineral Reserve as of 20th November 2013.

    2.         All Mineral Reserves have been estimated in accordance with
               the JORC code and have been reconciled to CIM standards as
               prescribed by the National Instrument 43-101.

    3.         Mineral Reserves were estimated using the following mining
               and economic factors:

    Open Pits:

               a)  5% dilution factor and 95% recovery were applied to the
               mining method;

               b)  overall slope angles of 43 degrees;

               c)  a copper price of USD$ 2.9/lbs;

               d)  an overall processing recovery of 88 - 90% for copper


               a)  10% dilution added to all Sub-Level Open Stoping;

               b)  Stope recovery is 87% for Sub-Level Open Stoping;

               c)  An overall processing recovery of 88 - 90% for copper.

    4.         The cut-off grade for Mineral Reserves has been estimated at
               copper equivalent grades of 0.3%Cu (NSR) for the open pits
               and 0.45%Cu (NSR) for the underground mine.

    5.         Mineral Reserve Estimates were prepared under the guidance
               of Anthony R. Cameron who is a sub-consultant to Mining One
               Pty Ltd. He is a Fellow of the Australasian Institute of
               Mining and Metallurgy and has over 26 years of relevant
               engineering experience and is the Qualified Person for
               Mineral Reserves.

Project Update

As of December 1, 2013, the Company has completed a further infill
drilling program to upgrade the resource confidence and help further
optimize the mine design and reserves of the Jiama deposit. The program
consisted of 104 drill holes for a total of 43,930 meters, including:
85 regular in-fill resource drill holes (34,923 m), 13 geo-technical
drill holes (4,835 m), and 6 geo-hydrological holes (4,172 m). Assaying
and geological logging and testing of the core from 2013 drill holes is
ongoing and this information will be included in the operational mine
plans and future updates of the Mineral Resources and Mineral reserves.

The Company is currently completing further metallurgical testing of
both skarn and hornfels ores to further optimize the molybdenum and
precious metal recoveries especially in lower grade ores. Further
testing underway in the South pit area, will be focused on further
refining the Cu-Pb-Zn separation.

Based on the above infill drilling and metallurgical program the Company
aims to continue to refine the operational mining plans and release an
update of the Mineral Resources and Mineral Reserves in the first half
of 2014.

National Instrument 43-101 Disclosure

An NI 43-101 Technical Report – Jiama Phase 2 Expansion Project Mineral
Resources & Reserves for China Gold International with an effective
date of December 20, 2013 has been prepared by Mining One Pty Ltd. The
report will be available on SEDAR (www.sedar.com) and on the Company’s website within 45 days of this release.

The content of this news release has been reviewed by Bin Guo and
Anthony R. Cameron of Mining One Pty Ltd, each of whom is a Qualified
Person in accordance with the requirements of NI 43-101. Bin Guo is a
sub-consultant to Mining One Pty Ltd and is the Senior Vice President
at CITIC Securities, responsible for valuation, ranking and transaction
of mining projects, and has been so employed since 2011. He has 13
years’ of industry and academic experience, with specific expertise in
exploration management, 3D integrated geological and geophysical
modelling / targeting and fulfils the requirements to be a Qualified
Person for the purpose of NI 43-101.

Anthony R Cameron is a sub-consultant to Mining One Pty Ltd and is
classified as an independent author. He is a Fellow of the Australasian
Institute of Mining and Metallurgy and has over 26 years of relevant
engineering experience and is the Qualified Person for Mineral

About China Gold International Resources

China Gold International Resources Corp. Ltd. is based in Vancouver, BC,
Canada and operates both profitable and growing mines, the CSH Gold
Mine in Inner Mongolia, and the Jiama Copper-Gold Polymetallic Mine in
Tibet Autonomous Region of the People’s Republic of China. The
Company’s objective is to continue to build shareholder value by
growing production at its current mining operations, expanding its
resource base, and aggressively acquiring and developing new projects
internationally. The Company is listed on the Toronto Stock Exchange
(TSX: CGG) and the Main Board of The Stock Exchange of Hong Kong
Limited (HKEx: 2099).

Cautionary Note about Forward-Looking Statements

Certain information regarding China Gold International Resources
contained herein may constitute forward-looking statements within the
meaning of applicable securities laws. Forward-looking statements may
include estimates, plans, expectations, opinions, forecasts,
projections, guidance or other statements that are not statements of
fact. Although China Gold International Resources believes that the
expectations reflected in such forward-looking statements are
reasonable, it can give no assurance that such expectations will prove
to have been correct. China Gold International Resources cautions that
actual performance will be affected by a number of factors, most of
which are beyond its control, and that future events and results may
vary substantially from what China Gold International Resources
currently foresees. Factors that could cause actual results to differ
materially from those in forward-looking statements include market
prices, exploitation and exploration results, continued availability of
capital and financing and general economic, market or business
conditions. The forward-looking statements are expressly qualified in
their entirety by this cautionary statement. The information contained
herein is stated as of the current date and subject to change after
that date.

SOURCE China Gold International Resources Corp. Ltd.

Source: PR Newswire

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