China Goldmines ‘on target’

11/07/2008 Robert Tyerman

The Guanzhuang gold project in China’s Hunan Province should yield a target 20,000 oz this year, says China Goldmines.

The Western Australia-based company, which bought the eight Guanzhuang mines from local owners last year, has refurbished them, installed new plant and claims it is on target to produce 150,000 oz of gold a year in 2011. China Goldmines, headed by chief executive officer Frank Vanspeybroeck, says it has obtained some high-grade underground samples at up to 103 grammes of gold per tonne of ore, but has budgeted for more modest grades of six grammes a tonne or more from the 1.6 million tonnes of ore it says are now available for mining from nine faces.

The company, which raised £30 million at 120p a share last September and started production in January, still had nearly £13 million cash at the end of June. Floated at 60p in 2006, China Goldmines shares hit 194p a year ago but later fell back to 78.5p.

Now 88.5p, up 9.5p this morning and valuing the company at £43 million, they have scope for recovery as long as the sector continues to defy the overall stock market trend.

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