AFCAN MINING CORPORATION

AFCAN MINING CORPORATION

March 04, 2005 11:17 ET

AFCAN Doubles Production Estimate in China: Feasibility Study Results Show 295,000 Ounces in First 2 Years


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: AFCAN MINING CORPORATION

TSX SYMBOL: AFK

MARCH 4, 2005 - 11:17 ET

AFCAN Doubles Production Estimate in China:
Feasibility Study Results Show 295,000 Ounces in First
2 Years

TORONTO, ONTARIO--(CCNMatthews - March 4, 2005) - AFCAN (TSX:AFK) is
pleased to announce the results of the feasibility study ("Study") of
the Company's 85% owned Tanjianshan project in Qinghai Province, China.
The results show a robust project that will allow the company to become
a major gold producer in China in 2006.

The following are the highlights:



Capital cost US$47.7million
Production 140,000 ounces - year 1
155,000 ounces - year 2
Total production 845,066 ounces
Processing average recovery 90%
Mine life 8 years
Cash operating cost US$33/tonne
Cash operating cost US$236/ounce
Total operating cost US$263/ounce (including a 4.5%
royalty)
Return on project:
Pre-tax NPV (5%) $US 58.9 million (pure
equity basis)
IRR 29.0%
Gold price US$420/ounce (un-hedged)


The President/CEO David G Netherway stated: 'We are very pleased to be
able to present this much larger project to the market and demonstrate
the potential of the region. The production rate will place us as one of
the largest foreign owned gold mining companies in China. With on-going
exploration around the Minesite, we expect production to remain at this
high level. Our relationship with the Chinese authorities and our strong
technical team has been instrumental in allowing us to develop this
project from exploration to feasibility in the short time of 2 years".

The following table shows the project pre-tax NPV and IRR on a pure
equity basis at varying un-hedged gold prices:



--------------------------------------------------------------------
Gold Price (US$/ounce) NPV @ 5% (US$million) IRR (%)
--------------------------------------------------------------------
400 46.2 23.9
--------------------------------------------------------------------
420 (Base Case) 58.9 29.0
--------------------------------------------------------------------
450 78.0 36.5
--------------------------------------------------------------------

The reserves for the project are as below:


--------------------------------------------------------------------
Proven Reserves Probable Reserves
--------------------------------------------------------------------
Deposit Tonnes Grade g/t Tonnes Grade g/t
--------------------------------------------------------------------
Qinlongtan 0 0 995,924 9.06
--------------------------------------------------------------------
Jinlonggou 1,523,969 4.26 3,476,249 3.99
--------------------------------------------------------------------
Total 1,523,969 4.26 4,472,173 5.12
--------------------------------------------------------------------


--------------------------------------------------------------------
Total Reserves
--------------------------------------------------------------------
Deposit Tonnes Grade g/t Ounces
--------------------------------------------------------------------
Qinlongtan 995,924 9.06 290,000
--------------------------------------------------------------------
Jinlonggou 5,000,218 4.07 564,597
--------------------------------------------------------------------
Total 5,996,142 4.90 944,597
--------------------------------------------------------------------

These reserves were extracted from the following resource statement
released on the 23rd November, 2004, based on information compiled by
Phil Fillis and Chris Arnold who are both Members of The Australasian
Institute of Mining and Metallurgy.

--------------------------------------------------------------------
Measured & Indicated Resources
--------------------------------------------------------------------
Deposit Tonnes Grade g/t Ounces
--------------------------------------------------------------------
Qinlongtan 1,164,000 8.62 323,000
--------------------------------------------------------------------
Jinlonggou 6,014,000 3.64 703,000
--------------------------------------------------------------------
Total 7,178,000 4.45 1,026,000
--------------------------------------------------------------------


--------------------------------------------------------------------
Inferred Resources
--------------------------------------------------------------------
Deposit Tonnes Grade g/t Ounces
--------------------------------------------------------------------
Qinlongtan 220,000 4.3 30,000
--------------------------------------------------------------------
Jinlonggou 2,770,000 3.0 272,000
--------------------------------------------------------------------
Total 2,990,000 3.1 302,000
--------------------------------------------------------------------

Afcan has completed the Study under Canadian National Instrument 43-
101 using the following consultants as qualified persons:

---------------------------------------------------------------------
Consulting Company Home Base Tasks undertaken
---------------------------------------------------------------------
RSG/Global Perth Mine plan, ore reserves & mine
operating costs
Compiling all reports into final
feasibility study
---------------------------------------------------------------------
SRK Pty Ltd Brisbane Geotechnical design parameters used
for the mine, building construction
and tailing dam construction.
---------------------------------------------------------------------
Devmin Pty Ltd Perth Generation of resource model
---------------------------------------------------------------------
John MacIntyre & Perth Metallurgical design parameters,
Associates flow sheet and metallurgical
operating costs
---------------------------------------------------------------------
GBM MEC Ltd London Review of BGRIMM capital costs
---------------------------------------------------------------------
Baker & Beijing Review of all licenses & permits,
MacKenzie LLP Chinese & tax corporate laws
---------------------------------------------------------------------
SGS Environmental Ghana Compile environmental base line
Services study and impact statement
---------------------------------------------------------------------
Maxwell Geoservices Perth Data control & verification
---------------------------------------------------------------------


The project will be mined as two open pits Jinlonggou and Qinlongtan,
developed simultaneously with Qinlongtan being processed first. The ore
from Qinlongtan will be trucked 19 km to the plant which will be located
at Jinlonggou. The mining will be done by a Chinese contract mining
company. There is underground potential, especially at Qinlongtan and
Afcan will be looking at starting a parallel underground mine to tap
these resources and to lower the stripping ratio.

The processing plant will be capable of handling both the oxides through
a carbon-in-pulp (CIL) circuit and the sulphides though a float/roast
circuit. The plant will be designed at a throughput rate of 800,000
tonnes per annum however the crushing and grinding circuit will allow a
higher tonnage to be processed. Afcan announced on February 17th, 2005
that it had taken an option on a semi-autogenous grinding (SAG) mill
located in South Africa to enable it to fast-track the project. All
other equipment will be sourced from China.

Gold recovery from the predominantly non-refractory Qinlongtan ore is
predicted to be 92.6%, with 78% of the gold recovered through the oxide
circuit and the balance from the sulphide circuit. Jinlonggou ore is
mainly sulphide-hosted, with overall gold recovery forecast to be an
excellent 90%.

The plant will be built under the supervision of GBM Mec Ltd of the UK,
using BGRIMM, a Chinese design institute to do the detailed design,
procurement construction and engineering.

The infrastructure around the mine is excellent with grid power
available by year-end 50 km from the site. A new power station is also
being commissioned within 35 km of the plant site; water is available
within 2 km and a paved road at 12 km. There is already a cellular phone
network and high speed internet at site. The site also has housing for
150 people which will be upgraded and expanded.

The environmental impact of the mine will be low. The site is
un-populated with the nearest town 80km away. The area to be mined is
barren and there is little vegetation or wildlife in the area. The
elevation of the site is 3300 metres with a temperature range of 9
to150C in the summer to -9 to -130C in the winter. Precipitation is
extremely low at less than 100mm/year.

The project will be built to North American environmental standards and
also to comply with the new Chinese environmental law promulgated in
2003 which sets exacting new standards.

The two mining licences have been transferred from the Chinese partners
into QDML, the joint venture operating company, 85% owned by Afcan. An
extension of one of these licences is under application and should be
granted next month. All of the permits currently required have been
granted except the land use permit, the terms of which have been agreed.
The final contract is being drafted. Afcan's ownership of QDML will
increase to 87.5% after investing US$35 million and 90% after US$50
million.

To enhance the return to the shareholders, the project will be partly
debt financed. The debt financing has been mandated to Macquarie Bank of
Australia and is expected to be in place shortly.

Project detailed design will commence immediately and site construction
will start in April. Subject to financing, the first gold pour is
expected in the second quarter of 2006.

In compliance with NI 43-101, the Company will file before 30 days the
complete technical report which will be available on www.sedar.com for
review.

The programme is being carried out under the supervision of Phil Fillis,
an independent geological expert and Qualified Person for Afcan.

AFCAN is an emerging gold producer in China and owns 85 % of the TJS
Project at Tanjianshan in Qinghai Province. There are an additional 23
anomalies on the licence area of 341 km2 that are being explored.
Afcan's growth is focused on exploration and development of its advanced
projects.

-30-

Contact Information

  • FOR FURTHER INFORMATION PLEASE CONTACT:
    AFCAN Mining Corporation
    David G Netherway
    President-CEO
    (416) 360-3404
    or
    AFCAN Mining Corporation
    Benoit La Salle
    Chairman
    (514) 744-2225
    info@afcan-mining.com
    http://www.afcan-mining.com
    THE TORONTO STOCK EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT
    RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.