Sinovus has a 15% free-carried interest in the Xiangguang Silver Project. The Project is located in Zhuolu County, in north-western Hebei Province, which is a 2 hour drive west of Beijing (about 130 km). Much of the road to the site area is sealed, with only the last 6km being a gravel road.
The Licences under this project are located in hilly country at between 860m and 1,500m above sea level. A 10.8 km2 Exploration Licence ('EL') covers the southern part of project, while the northern project area is covered by a 3.12km2 Mining Licence ('ML').
Previous exploration has identified a total of 68 mineralised veins that occur at parallel spacings of between tens of metres to about 200m. Only 3 of the 68 veins have been explored in any detail (Vein No. 2, 13 and 14). Vein No. 2 is continuous over 3,300m, No. 13 over 1,900m and No. 14 over 900m.
Previous exploration has defined a 13.6 million oz silver resource at an average grade of 161g/t Ag. This deposit has a high-grade 'core' of 2.7 million ozs of silver at 250g/t Ag. Reconnaissance diamond drilling in 2005 has confirmed the extension of the three explored veins in the southern part of the deposits, suggesting good potential to expand the existing resource.
Previous exploration centred on defining a vein-type silver-manganese deposit that could be mined underground. The previous strategy did not consider a shallow open pit operation and no exploration was conducted to test the deeper sulphide mineralisation potential.
Most drilling samples were not assayed for gold, but it is possible that gold may exist in economic concentrations. Furthermore, the presence of manganese (identified through visual inspection) was used as a guide to the presence of silver mineralisation. But subsequent examination has indicated that silver and gold mineralisation does not always follow that of manganese.
Sinovus has developed a new conceptual model that suggests that potential lies in a large, lower-grade low-sulphidation silver-gold-base metal deposit underneath or adjacent to the known veins. Under the previous model, gold was not considered in the metallurgical studies and was generally not assayed in drilling samples. But it is likely that gold will be an important component to the economic potential of the deposit.
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Sinovus Mining Limited
Level 10, 32 Martin Place
Sydney, NSW, Australia, 2000
Tel: (+612) 8222 6161
Sinovus Mining Ltd (ASX: SNV) is an Australian based junior resource company, primarily focused on developing its gold and silver assets in the Heilongjiang and Hebei regions of northern China.
Sinovus also has an interest in a Chinese coal mine, and holds a strategic investment in an Australian unconventional oil and gas project.