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REGIONAL NEWS - ASIA Sumitomo Will Develop New Orebody at Hishikari Gold Mine Sumitomo Metal Mining has announced plans to develop a promising orebody recently confirmed to exist at its Hishikari mine in Kagoshima prefecture, Japan. The orebody is located under and is con- tinuous with an orebody currently being mined. Based on the results of prospect- ing to date, the company expects devel- opment at this new site to generate an estimated 965,000 oz of gold. Sumitomo has drafted an investment plan for the project totaling approximate- ly 3.2 billion yen ($40.8 million). Work is scheduled to start in November 2012, with mining of the lower orebody planned to begin in 2018. Mining at the Hishikari mine is compli- cated by the presence of subterranean thermal water, and current mining got underway only after installation of equip- ment for lowering the water level, placed at a depth of 50 m below sea level. Now that prospecting has confirmed the presence of a promising continuous orebody below the present water level, the water will need to be lowered further before mining of the lower orebody can begin. Equipment will be installed inside the mine at a depth of 80 m below sea level for this purpose. The Sumitomo announcement notes that, "The Hishikari mine is Japan's most prolific gold mine and provides Sumitomo with an important and stable source of earnings. The mine is also the only location in Japan where mining engineers can be trained as a preliminary step toward acquir- ing natural resources overseas. Sumitomo is strongly committed to securing new gold resources at Hishikari." Turquoise Hill Rejects Investment Agreement Renegotiations Turquoise Hill Resources announced on October 15, 2012, that the company, together with Rio Tinto and Oyu Tolgoi LLC, has rejected a request from the gov- ernment of Mongolia to renegotiate the Investment Agreement for the Oyu Tolgoi copper-gold-silver project in the South Gobi region of Mongolia. Turquoise Hill's announcement followed receipt of a let- ter from Mongolia's Minister of Mining requesting that the parties renegotiate the Investment Agreement that was signed in October 2009 and became fully effective in March 2010. As recent- ly as October 2011, the Mongolian Government reaffirmed the Investment Agreement was signed in full compliance with all laws and regulations of Mongolia. Turquoise Hill CEO Kay Priestly said, "The Investment Agreement is mutually beneficial for the Mongolian Govern- ment and investors. We have invested nearly $6 billion, created thousands of jobs for Mongolians, and are on the verge of production based on the Investment Agreement, which provides a stable legal framework and is a legally- binding document. The Investment Agreement has been fundamental in building Mongolia's reputation as an increasingly reliable and secure destina- tion for foreign investment." Turquoise Hill holds a 66% interest in the Oyu Tolgoi project. The Mongolian government holds the remaining 34%. Rio Tinto holds a 51% controlling inter- est in Turquoise Hill. On October 9, Turquoise Hill reported that construction at the Oyu Tolgoi pro- ject is essentially complete. Construction of the power transmission infrastructure in both Mongolia and China is complete, and the power lines have been success- fully tested with full power loads and are ready for use. Negotiations with Chinese authorities on a power purchase agree- ment were progressing. Ore genesis of the Hishikari deposits. 20 E&MJ; • NOVEMBER 2012 Once a final power agreement has been concluded, first ore is expected to be processed through the Oyu Tolgoi con- centrator within six weeks. First concen- trate production will follow within one month, and the start of commercial pro- duction is expected three to five months thereafter. China Gold International to Expand Jiama China Gold International Resources has reported the results of an NI 43-101- compliant, independent prefeasibility study for a Phase II expansion of its Jiama copper-polymetallic mine in Tibet Autonomous Region, China. The study supports the company's planned expan- sion of the mine from its current pro- cessing capacity of 6,000 mt/d to 40,000 mt/d of ore through the expan- sion of current open-pit mining opera- tions and the development of new open- pit and underground operations. The Jiama project is located in central Tibet approximately 60 km east of Lhasa City along the Sichuan-Tibet highway. The project is based on a large poly- metallic deposit consisting of copper, molybdenum, gold, silver, lead and zinc mineralization. Commercial production began at the Jiama mine in September 2010, and the plant is currently process- ing 6,000 mt/d. At its expanded capacity of 40,000 mt/d, Jiama's production of metal in con- centrates is planned to average 176 mil- lion lb/y of copper, 35,000 oz/y of gold, 2.7 million oz/y of silver, and 2,300 mt/y of molybdenum over a mine life of 31 years. Life-of-mine head grades will aver- age 0.77% copper, 0.22 g/mt gold, 12 g/mt silver, and 0.03% molybdenum. Lead and zinc will contribute less than 1% to overall revenue. Capital expenditures to develop the project are estimated at $705 million. China Gold International Resources is based in Vancouver, British Columbia, and operates both the Jiama mine and the CSH gold mine in Inner Mongolia. The company is listed on the Toronto Stock Exchange and the Main Board of the Stock Exchange of Hong Kong. China National Gold, a Chinese state-owned enterprise and the largest gold producer in China, owns approximately 39.3% of the company's shares. www.e-mj.com