XIAMEN, China, Oct. 15, 2014 /PRNewswire/ -- The board (the "Board") of directors ("Directors") of Hengxing Gold Holding Company Limited is pleased to announce the operation updates of its Gold Mountain Mine (as defined in the prospectus dated 19 May 2014 of the Company) for the third quarter of 2014. Gold Mountain Mine is the largest operating gold mine in Xinjiang region of China in terms of JORC resources, designed annual ore processing capacity and estimated gold production volume at full production level.
Based on the Company's preliminary review of the unaudited operational data of the Group and the information currently available to the Company, the Group's Gold Mountain Mine processed approximately one million tonnes of ore during the third quarter of 2014, which was approximately 80% of its designed capacity on a quarter basis, and produced approximately 11,348.2 ounces (equivalent to approximately 353.0 kg) of gold dore during the third quarter of 2014. The designed processing capacity of Gold Mountain Mine is five million tonnes of ore per annum. For the first half year of 2014, the Company produced 7,012.1 ounces (equivalent to approximately 218.1 kg) of gold dore.
Furthermore, the Company observed the unit operating cash cost[1] of Gold Mountain Mine is on a downward trend, which is in line with the production expansion plan and the expectations of the management of the Company.
On the technical upgrade front, the preliminary result of the commission of the vertical crusher is positive. However, it requires further testing under different weather types and test performance from other makers. The Company is continuously analysing the feasibilities of the CIL Project (as defined in the prospectus dated 19 May 2014 of the Company). As reported in the announcement by the Company on 15 September 2014, the net present value[2] of CIL Project would be significantly influenced by the gold price.
On the exploration front, Gold Mountain Mine has finalized the exploration cooperation with Western Region Gold Ili Company Limited ("Western Region Gold") and jointly conducted surface geochemistry work in the Bohegou area, a highly prospective area for gold which is within the exploration licence area of the Company while neighbouring the plant area of Western Region Gold. Several continuous gold-in-soil anomalies with high Au ppm have been observed with the highest one being up to 81.3 Au ppb. Based on the results of the preliminary exploration work, Western Region Gold and the Company will define the drilling targets and prepare the exploration working plan. The Company will continue to update the progress of the joint exploration effort.
This announcement is made based on the Board's preliminary review of the unaudited operational data of the Group and the information currently available to the Board, and it is not based on any figures and information which have been audited or reviewed by the Group's auditors. The references to the gold production, gold price or unit operating cash cost do not constitute, represent or indicate the full picture of the Group's total revenue or financial performance and the information contained in this announcement may be subject to change and adjustment.
Shareholders of the Company and potential investors are advised to exercise caution when dealing in the Company's securities.
Notes:
[1] The operating cash cost includes the cash outflows from mining, processing, selling and administrative activities, excluding the depreciation, amortization and finance cost.
[2] Net present value is the sum of the present values of the individual cash flows generated from the same entity.
