Assay results from a reverse circulation drilling program at Sino Gold’s Beyinhar Gold Project in Inner Mongolia , China , provide likely upside in the estimated grade of the deposit.

The program covered about 25% of the ore body with further work now warranted to check and better quantify the potential upside to the estimated resource grade.

Sino Gold’s chief executive officer Jake Klein says: “The latest results could have a materially positive impact on the project economics.

“The low grade of Beyinhar always meant that we had to be very confident with the grade. These results suggest that the downside is very limited and there is potentially significant upside.

“These results are sufficiently encouraging for Sino Gold to have started detailed planning for a substantial engineering and geological program this year that will progress the development of the project to become the company’s fourth operating gold mine.”

In January Sino Gold released an updated mineral resource estimate for Beyinhar totalling 69.2 million tonnes at 0.55 grams/tonne gold, containing 1.2 million ounces.

This estimate is based on diamond drilling completed at a nominal 50 metre drill spacing, with the samples analyzed using the fire assay method.

An RC drilling program was completed in late 2008 over about 25% of the deposit that is categorized as an indicated resource. The results from this program are not included in the resource estimate.

The RC samples were analyzed by ‘bottle roll’ bulk-leach extractable gold (BLEG) and fire assay methods for comparison to the fire assay method used for analyzing samples from diamond drilling at Beyinhar. The BLEG assay analysis method was chosen as it is likely to more accurately reflect the proposed heap-leach processing method by cyanide leaching.

A total of 418 samples from the RC program were also analyzed using the fire assay method. For comparison, a total of 173 samples (coarse rejects) from the diamond drilling over this area were also analyzed using the BLEG method.

Comparison of assay results from the RC and diamond drilling programs concluded that the fire assay method may have under-estimated the average BLEG grade of the test area of the mineral resource by 20% to 40%.

Further checks using both BLEG and fire assay methods on duplicate samples are required to understand and quantify the difference as the cause is not well understood.

Permitting is also planned to be progressed during 2009, as well an exploration program aimed at discovering additional oxide resources near the Beyinhar resource.

www.sinogold.com.au