Jinshan Gold Mines

Jinshan Gold Mines
金山矿业有限公司
Resource One San Francisco
December 2008
www.jinshanmines.com
JIN : TSX
Forward Looking Statements
This presentation includes certain “forward-looking statements.” All
statements, other than statements of historical fact, are forward-looking
statements that involve various risks and uncertainties. There can be no
assurances that such statements will prove accurate and actual results
and future events could differ materially from those anticipated in such
statements.
Such information contained herein represents
management's best judgment as of the date hereof based on information
currently available. The company does not assume the obligation to
update any forward-looking statement. The qualified persons reviewing
the technical information for the CSH 217 Project are Joe Keanne,
President of KD Engineering and Mario E. Rossi, of Geosystems
International Inc., and John Nilsson, of Vancouver, Canada. The qualified
person reviewing the technical information for the Dadiangou project is
Keith Patterson, M.Sc., P.Geo., Jinshan’s Vice President of Exploration.
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Jinshan Gold Mines - China’s new
gold producer
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Why explore in China?
China’s gold industry
Relationship with China National Gold
CSH Mine - from exploration to operation
Dadiangou - advanced exploration
Experienced motivated management team
Corporate development
Summary
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Why Explore in China?
• Geological Risk vs. Reward
– Exploration opportunities?
– Exploration dollars well spent?
• Political Risk vs. Reward
– Can you work effectively?
– Can you develop/exploit if you have exploration
success?
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Simplified Geology of China
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Gold Deposits along Convergent Plate margins
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Jinshan’s Exploration Efforts
Heilongjiang
Altay
CSH 217
Gold Mine
Northern China
NW China
Grassroots
Projects
Tianshan
Dadiangou
Advanced Exploration
Qinling
Gold Deposit > 2M ozs
Gold Deposit > 100k ozs
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China’s expanding gold industry
¾ Ranked # 1 largest gold producer in 2007, as S Africa, N
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America and Australian production all decline dramatically
Industry in transition from small scale 1,250+ mines,
unconsolidated, undercapitalized and inefficient.
Geopolitically stable, mining friendly, highly prospective
geology
Transformation on all fronts; ownership, funding, scale, freeing
up of state owned assets etc.
Significant cost advantages, supplies, technical staff
Expanding domestic consumption of gold
JIN now uniquely placed among foreign companies as the only
TSX listed company that is a “State Owned Enterprise”
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Few senior participants in the Chinese gold
sector
¾ New significant gold region not dominated by majors, of the
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nine senior producers only one, Gold Fields, is active via
relationship with Sino Gold
Few Hong Kong listed gold companies; Zijin, Zhaojin, Zhongin
Lingbao and Sino Gold
Other foreign companies in production; Sino Gold, Eldorado
Gold, Jinshan Gold and Griffin Mining
25+ foreign companies exploring and developing projects
across China
China produces approx 270 T of gold, CNG accounts for 50 T,
all others 100 to 120 T leaving approx. 100 T for consolidation
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China National Gold overview
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China National Gold is a large scale state-owned enterprise,
100% held by the State Council.
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Chairman member of China Gold Association.
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Council member of Shanghai Gold Exchange.
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Only Chinese member of the World Gold Council.
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Nearly 40,000 employees all over the country.
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Divisions in every aspect of gold mining; underground, open
pit, processing, engineering, bio-leaching, refining and
retailing!
48% ZhongJin
Gold (SSE)
36 operating mining
companies
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74 wholly-owned and holding
subsidiary companies
17 exploration mining
companies
6 under construction
mining companies
42% Jinshan
Gold Mines (TSX)
15 non-mining
companies
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Paishanlou underground gold mine
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Wushan Cu-Mo Mine
Reserves
2.67 mm tons, 0.54 mm tons Mo
Phase I
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Total investment is RMB 2.6 billion US$ 380 M
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Ore processing capacity is 30,000 tpd
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Annul production: Cu 25,900 t, Mo 2,958 t
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Operational by the end of 2008
Phase II
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Ore processing capacity is 60, 00 tpd
Phase III
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Ore processing capacity is 120,000 tpd
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Wushan Cu Mo mine,
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Other divisions; Bio-Leaching, Retail
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CNG and JIN creating unique synergies
JIN has;
¾ a successful track record as a foreign company operating in China,
¾ a commitment to build a modern mine,
¾ a commitment to conduct advanced exploration as well as grass roots
exploration with a western industry approach,
¾ a unique entrepreneurial management team of Chinese and foreign staff,
¾ TSX listing to access equity markets, a platform for foreign acquisitions
CNG provides;
¾ access to low cost, unhedged, Chinese bank debt,
¾ access to deal flow, exploration and advanced projects,
¾ access to significant technical skills from within the CNG group,
¾ management commitment at the highest level as CNG’s Chairman becomes
JIN’s CEO.
Together we represent a unique combination for growth
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CSH mine – China’s new gold mine
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Gold Production
CSH Gold Mine
• 96.5% ownership
• First gold pour July 2007
• 74,501 oz produced to date
• Sept 6,454 oz, Oct 5,320 oz
• Cash cost $472, total cost $524
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Resource Base
CSH Gold Mine
• Resource Base M & I - 3.92 M oz
• Resources Inferred – 1.33 M oz
• Potential 9 KM strike length
• Low discovery cost < US$3 per oz
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Phase II update
CSH Gold Mine
• Currently mining at 20,000 tpd
• Feasibility Study to potentially
increase to 30,000 tpd.
• Production increase target from
100,000+ to approx150,000+oz
• Bridge facility US$19 M drawn down
• Construction commenced, crushers
ordered
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New processing tanks, crusher foundations
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Potential to increase mine life
¾ Current target rate of approx100,000+ oz/year from NE zone only
¾ Expansion study to target 150,000+ oz/year to include SW zone
¾ Exploration drilling expanded deposit to west and at depth
Exploration
Potential
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SW Zone
NE Zone
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Gold Resources Increase 2008
2008 年黄金资源增加
Jinshan’s Gold Resources - February, 2008
Project
Cut-off
(g/t)
Million
Tonnes
Gold Grade
(g/t)
Contained Gold
(Million Ozs)
% Change from
2006
34%
Measured and Indicated Resources:
CSH 217
0.35
171.3
0.71
3.92
Dadiangou
0.40
20.0
0.87
.60
Total M + I
4.52
Inferred Resources:
CSH 217
0.35
64.2
0.65
1.33
Dadiangou
0.40
16.6
0.96
0.50
Total Inferred
1.83
189%
*Resource estimates by Mario Rossi, MSc., Min. Eng., of Geo Systems International Inc. January 31, 2008
and February 14, 2008.
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Dadiangou Project, Gansu Province
Drilling new opportunities
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Baoli
Xi’an
Gansu
Province
Shaanxi Province
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Dadiangou - “Drill and Develop” Project
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Work started February 2, 2007
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51 diamond drill holes, 11,865 m in two phases
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First resource January 31, 2008 26 Mt @ 0.919 gpt = 777,600 ozs
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Resource increased 34% to 1,043,000 oz approx half Indicated and half
Inferred category
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Approx discovery cost US$4 per oz
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Experienced, motivated management team
Directors:
¾ Zhaoxue Sun, Chairman CNG
¾ Daniel Kunz, Director
¾ Pierre Lebel, Chairman - Imperial Metals
¾ Ian He, Director
¾ Bing Liu, CFO CNG
¾ Wu Zhanming, CNG
¾ Yunfei Chen, Financial advisor to CNG
Management:
¾ Zhaoxue Sun, CEO
¾ Roger Walsh, VP Corporate Development
¾ XD Jiang, VP Production & Technology
¾ Rick Low, CFO
¾ Keith Patterson, VP Exploration
¾ Boping Ma, VP
¾ Jian Ren, VP
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Valuation drivers
CSH Gold Mine
¾ Cashflow and recognition of ‘new producer status’
¾ Throughput expansion to potentially increase gold production from 100,000+ to
150,000+ ounces per annum
¾ Increase P&P reserves in the Southwest Zone
¾ Ongoing brownfields exploration at mine and strike extension
Dadiangou Gold Property
¾ Resource of 1,000,000 ozs
Growth Potential
¾ Acquisition and exploration activities
¾ Exploration JV’s with CNG
¾ Consolidation of the Chinese gold
industry
¾ International acquisitions or JV’s
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Share Structure
¾ Cash and Cash Equivalents*
¾ Debt Tranche 1.
Tranche 2.
ICBC Bridge loan
¾ Ownership
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Issued/Outstanding
Fully diluted
Share price
Market capitalization
TSX Listed
US $11.4 M *
CDN $30 M Note Facility 12%
CDN $20 M Note Facility 12%
RMB 130 M US$19.1M - 6.21%
China National Gold 42%,
Institutional approx 20% , Retail 38%
161 million
177 million
CDN $0.45
US $58 M
“JIN”
* Includes restricted cash of $ 4 M for letter of credit
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Summary
¾ Growth in the world’s largest gold producing nation
¾ Access to significant deal flow
¾ Access to Chinese costs, technology, skilled people
¾ Access to low cost debt
¾ Aligned now to pursue China National Gold’s objective;
A multinational company, top in China, first class in the world
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