Jinshan Gold Mines Inc.
TSX : JIN

Jinshan Gold Mines Inc.

December 01, 2008 09:01 ET

Jinshan Increases Dadiangou Gold Resource by 34%; Upgrades Over Half of Deposit to Indicated Status

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Dec. 1, 2008) - Jinshan Gold Mines Inc. (TSX:JIN) is pleased to announce an updated resource estimate for its Dadiangou gold project in Gansu Province, China. The total resource tonnage has increased by 39% and the total contained gold has increased by 34% over the previous resource estimate announced January 31, 2008. The Dadiangou Project now hosts Indicated Resources of 20.0 million tonnes at 0.87 g/t gold for 545,000 ounces of contained gold and Inferred Resources of 16.6 million tonnes at 0.96 g/t gold for 498,000 ounces of contained gold, both at 0.4 grams per tonne (g/t) cut-off grade. Within the overall resource, a higher-grade core zone (consisting of both inferred and indicated resources) has been defined which contains approximately 60% of the total gold resources within 25% of the total tonnage and grades 2.05 to 2.07 g/t gold.



Dadiangou Total Resources at 0.4 g/t cut-off:
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Tonnes Gold Grade
(millions) (g/t) Contained Ounces of Gold
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Indicated Resources 20.0 0.87 544,910
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Inferred Resources 16.6 0.96 497,950
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Dadiangou Higher-Grade Core at 1.0 g/t cut-off:
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Tonnes Gold Grade
(millions) (g/t) Contained Ounces of Gold
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Indicated Resources 5.6 2.05 369,250
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Inferred Resources 3.8 2.07 253,560
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"Infill drilling, predominantly in the central portions of the Main Zone has resulted in this significant increase to gold resources at Dadiangou," said Jinshan's Vice President of Exploration, Keith Patterson. "We are confident that the higher-grade core, now emerging as an important component of the overall resource, will ultimately have a strong positive impact on project economics."

With the expanded resource complete, Jinshan will now focus on advancing the project with a preliminary economic assessment of a possible mining operation at Dadiangou. In support of an anticipated application for a Chinese mining license, a Chinese resource report and scoping level economic study is currently nearing completion. Once both the NI 43-101 compliant resource and the Chinese study are complete, the company will evaluate its options with respect to developing the project.

The mineralized shear zone at Dadiangou is vertical to steeply north-dipping and has been delineated for over 4,000 metres in strike length, with typical widths of 50 to 60 metres over 2/3 of its strike length, but can vary from 10 to 80 metres in width. The Dadiangou gold system is located in the central part of China in southern Gansu Province within the prolific Qinling Fold Belt. The license covers approximately 15 square kilometres and is owned by the Northwest Industrial Nuclear Economic Technical Corp. (part of the Shaanxi Nuclear Geology Bureau of China). The joint-venture agreement with the Northwest Industrial Nuclear Economic Technical Company (the Chinese partner) allows Jinshan to earn a minimum of 80% on the property, with the Chinese partner having the option to participate at 20%, or to become diluted.

The reported gold resources at Dadiangou are currently classed as Indicated and Inferred based on Canadian Institute of Mining Metallurgy and Petroleum standards and guidelines. A block model with nominal block size of 20 x 10 x 5 metres was used for grade estimation, although smaller blocks (5 x 5 x 5 metres) were used in some cases to better define the shear zone contacts and higher grade zone. Gold grade inside the shear zone was estimated using a mixture of ordinary kriging and the results of the higher-grade probabilistic model. Gold grades from inside the shear zone and below the oxidation level were capped at 6 g/t and a 2 g/t grade cap was applied above the oxidation level. A constant density of 2.78 tonnes/m3 was used and represents the average of 183 samples tested using industry standard wax coating method. An updated NI 43-101 compliant technical report will be completed and filed on SEDAR (www.sedar.com) as required by securities regulations.



Table 1: Dadiangou Indicated Resources.
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Cutoff Grade Tonnes above Cutoff Gold Grade Contained Ounces of Gold
(g/t gold) ('000) (g/t) ('000)
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0.20 28,156 0.71 619,330
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0.40 20,024 0.87 544,910
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0.60 13,950 1.04 452,070
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0.80 9,060 1.23 346,360
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1.00 5,396 1.46 244,770
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Table 2: Dadiangou Inferred Resources.
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Cutoff Grade Tonnes above Cutoff Gold Grade Contained Ounces of Gold
(g/t gold) ('000) (g/t) ('000)
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0.20 27,259 0.70 592,150
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0.40 16,631 0.96 497,950
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0.60 11,554 1.17 420,790
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0.80 8,352 1.35 351,730
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1.00 6,227 1.51 292,100
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Within the Dadiangou Main Zone, a higher-grade core was modeled based on the coincidence of geological criteria with higher-grade assay intervals and the probability that certain favourable geologic criteria will be associated with higher grades. A relatively continuous higher-grade zone was thereby defined and separated out from the remainder of the shear zone. Results of the resource estimate within this higher-grade zone (Tables 3 and 4) show that it contains approximately 60% of the total gold at Dadiangou within only 25% of the total tonnage and at significantly higher grades than the global resource.



Table 3: Indicated Resources within the Dadiangou higher-grade core.
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Cutoff Grade Tonnes above Cutoff Gold Grade Contained Ounces of Gold
(g/t gold) ('000) (g/t) ('000)
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1.00 5,596 2.05 369,250
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1.40 4,473 2.26 324,950
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1.80 3,229 2.52 261,330
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2.40 1,430 3.06 140,540
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Table 4: Inferred Resources within the Dadiangou higher-grade core.
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Cutoff Grade Tonnes above Cutoff Gold Grade Contained Ounces of Gold
(g/t gold) ('000) (g/t) ('000)
--------------------------------------------------------------------------
1.00 3,817 2.07 253,560
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1.40 3,238 2.21 230,080
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1.80 2,426 2.40 187,160
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2.40 911 2.95 86,390
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The resource estimate was prepared by Mario Rossi, M.Sc., Min.Eng., and Jose A. Bassan, B.S., of Geosystems International Inc. and relies on data from Phase I to III diamond drilling (68 drill holes totaling 14,910 metres), continuous channel sampling of 37 underground crosscuts, and continuous channel sampling from 32 surface trenches. In total, 9,687 individual assays were used to build the Dadiangou resource model. Results at a number of possible cut-off grades are presented above. A cut-off grade of 0.4 g/t gold has been chosen as the base case most likely to approximate the economic cut-off of a potential open-pit operation.

Quality Assurance and Quality Control Program

Industry standard core handling, sample chain of custody, and laboratory quality assurance/quality control (QAQC) procedures have been developed and followed during all work at the Dadiangou project. Individual core boxes are transported from the drill site to a secure core logging facility by Jinshan personnel. At the core shack, core is logged for geological and geotechnical purposes, then photographed prior to being cut by diamond saw for sampling. Blank, duplicate, and standard samples are inserted into the sample stream, each comprising 5% of the total samples bringing the frequency of QAQC samples to 20% of the total samples submitted. A strict chain of custody protocol is enforced at all times during sample transport from the project to SGS-CSTC Laboratories in Tianjin, China (ISO 9001-2000 accredited). Once results are received, they are compiled with the drill hole data then reviewed and approved by both Qualified Persons.

Qualified Persons

Mario Rossi, M.Sc., Min.Eng., of Geosystems International Inc. is an Independent Qualified Person as defined by National Instrument 43-101 and is responsible for the Dadiangou resource estimate. Mr. Rossi has visited the Dadiangou site and audited the ongoing exploration program and has reviewed the results within this release. Howard Davies, M.Sc., M.A.I.G., a Jinshan employee, and Keith Patterson, M.Sc., P.Geo., Jinshan's Vice President of Exploration, are Qualified Persons responsible for fieldwork at the Dadiangou project. Both Mr. Davies and Mr. Patterson have supervised the work onsite and the results reported in this release.

About Jinshan

Jinshan is a Canadian mining company focused on gold production and acquisitions in China. The company began producing gold at the CSH Mine in July 2007 and is actively advancing its portfolio of gold exploration properties in China. Jinshan's shares are listed on the Toronto stock exchange under the symbol JIN. China National Gold, a Chinese state-owned enterprise and the largest gold producer in China owns approximately 42% of Jinshan's shares.

Forward-Looking Statements: Statements in this release that are forward-looking statements, including the ongoing exploration programs at Dadiangou, the preparation of a technical report regarding the resource estimate, the preparation for a Chinese mining license application and the planned preliminary assessment report are subject to various risks and uncertainties concerning the specific factors disclosed under the heading "Risk Factors" and elsewhere in the company's MD&A, financial statements and other periodic filings with Canadian securities regulators. Such information contained herein represents management's best judgment as of the date hereof based on information currently available. When used in this document, words such as "could", "planning", "estimate", "expect", "intend", "may", "potential", "should", and other similar expressions are forward looking statements. The company does not assume the obligation to update any forward-looking statement.

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