DRAGON MOUNTAIN GOLD LIMITED - ASX: DMG

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Description

Dragon Mountain Gold Limited ("the Company") is a public company registered in Perth, Western Australia which has been operating in China since its incorporation in September 2004. The Company’s most advanced project is the Lixian Project which hosts significant Chinese classified resources and JORC-Code compliant Indicated and Inferred Mineral Resource in an historical gold producing area of the Gansu province in central China. The Company has submitted the Mining Area Demarcation application for the Liba area, which includes the Zhao Gou and Ma Gou deposits within the Lixian Project. This application is the first step in applying for a Mining Licence and is currently under assessment by the Ministry of Lands and Resources in China.

The Company also has a majority interest in the Xinjiang Projects located in north-west China, where granted licences cover approximately 588km2 of select areas within the geologically significant Tian Shan Orogenic Belt. The Dashankou and Sahentohai Projects are located in areas containing known gold mineralisation with Dashankou featuring drill ready targets. The Halke Shan Project is a grass roots conceptual target with limited previous exploration.

The Company has a highly skilled and experienced Board and management team in exploration, project evaluation and development, mining and public company corporate skills.

Lixian Project

The Lixian Gold Project contains a major outcropping gold system within which large scale, structurally controlled high grade mineralisation has been outlined from previous extensive drilling, trenching and adits. The host structures are wide (up to 90 metres) and can also extend for several kilometres, with evidence of persistent mineralisation.

Estimates made of the quantum of extensive mineralisation at the Zhao Gou, No.6 and up to 12 other deposits by the Gansu Non-Ferrous Metallurgical Bureau are described in detail in the Company's Prospectus. While only part of the Zhou Gou Resource complies with The JORC-Code reporting guidelines, the Company considers that the estimates were undertaken with a high degree of rigor by a specialist unit within the Tianshui Geological Group.

Subsequent work by the Company has comfirmed and increased the extent of these deposits, while workers have identified and exposed additional gold mineralisation which has not been included in any resource estimation reports.

The Company has established a significant presence at the Lixian Project with a team of up to 180 personnel, in addition to contract drilling and underground mining crews.

Infastructure for the projects including the supply of water and power are well established. The site is well served by sealed roads in the area and neighbouring township.

The Lixian Project is well advanced with all necessary exploration approvals and business licences obtained from the relevant authorities and joint venture partners. Key mineral titles have been secured and transfered to the joint venture companies for which business licences have been granted.

The Lixian Project comprises two joint ventures ("JV") areas. The total ground holding is 36.39km2, including the 5.14 km2 Liba tenement (LongJin JV) and the Jinshan group of four tenements totalling 31.24 km2 (Long Ao JV).

Xinjiang Project

Work during the last few field seasons has focused on the Sahentohai, Dashankou and Chahanusu gold projects with reconnaissance work undertaken over the Halke Shan group of licences.

These licences and other areas became subject to a Joint Venture Agreement which was finalised with the Articles of Association for the Xinjiang Pan Pacific Mining Company Limited Joint Venture (“XPPM”) signed on 14 December 2006. The certificates of approval for the formation of XPPM, a Sino Foreign Joint Venture Business Licence, were issued on 30 April 2007 and following registrations with Urumqi Administration, a formal Business Licence was issued. Consequently, the procedure for the transfer of the exploration licence titles to XPPM has commenced.

While large areas continue to be assessed the main focus over the next two years will be to develop and test drill targets within the Tian Shan Orogenic Belt over the 75+km strike length held by the Company’s licences covering the structure. The two main areas where drill targets have been developed from strong anomalies at surface include the Dashankou-Chahanusu area and Sahentohai.

Mine For

gold

Location of operation(s)

China

Address

Suite 4, 62 Ord Street
WEST PERTH, WA, AUSTRALIA

Phone

(08) 9215 6300

Email

Website

http://www.dragonmountain.com.au

Last Updated

13/04/2011