Sino Gold Mining has entered into an option agreement with Beipiao Huifeng Enterprises Group to acquire the Caijiagou Gold Project in Liaoning Province, north-east China.
The project includes a 17.5km2 exploration licence, a small open-pit mine and a new processing plant.
Following an initial payment of $300,000, Sino can conduct due diligence including a drilling programme and by paying a further $7.9m with one year can acquire a 70% stake of the project.
Sino can acquire another 25% stake by paying additional $4.4m within 24 months.
The open pit is 250m long, 80m wide and around 40m deep and limited sampling undertaken by Sino returned assays of 8m at 4 g/t gold and 24m at 1.7 g/t gold.
The mine has strong gold mineralisation and there are numerous indications that a larger mineralised system is likely to be present, Sino CEO Jake Klein said.
“Caijiagou is exactly the type of opportunity in China that Sino Gold has been pursuing as it has the potential to quickly create tremendous value,” Klein said.