Golden China Resources is working on a new Canadian National Instrument 43-01 compliant independent mineral resources estimate for its Nibao gold project in Guizhou Province in China .

The company plans to complete a pre-feasibility study in October 2006 and based on positive results, Golden China plans to move quickly to preparation of a definitive Bankable Feasibility Study to be completed by the second quarter of next year.

The inferred mineral resource at the Nibao gold project currently stands at 5.45 million tonnes grading at 2.47 grams per tonne using a cut-off grade of 0.75 grams per tonne, resulting in a total of 432,000 ounces of contained gold.

The current drilling program, all at depths of less than 150 metres is intended to increase the size of the total mineral resource and to upgrade a substantial portion of the mineral resource from the inferred to indicated and or measured resource categories.

The initial results from Nibao South, based on 40 metre x 40 metre drill spacings, have confirmed continuity of a shallow, flat-to moderately dipping, gold mineralized body measuring at least 1100 metres long, 100-200 metres wide and 5-50 metres thick and open to the south-west and north-east and down-dip. The mineralized body contains a continuous higher-grade core zone with great than 3 grams per tonne gold and intercepts of up to 19.55 grams per tonne gold.

The initial results from Nibao East (1.5km, north-east of Nibao South), based on 50 metre x 50 metre drill spacings have also confirmed the continuity of the gold mineralisation intersected from the wide-spaced drilling conducted in 2005. The mineralized body is at least 500 metres long, 150-200 metres wide and 20-30 metres thick.

A resources delineation drill program was completed in May and a resource model was presently recently for validation and development of a new Canadian National Instrument 43-101 compliant independent mineral resource estimate for Nibao.

After the close-spaced resource delineation drill program is completed, Golden China will seek to delineate additional gold deposits along the Nibao hydrothermal system, identified from surface work to be at least 12km in strike length.

Metallurgical testwork on samples from Nibao South, East and Central has been undertaken by the SGS, Lakefield, Oretest laboratory in Perth , Western Australia . These samples will be tested through a conventional crushing, grinding and flotation flowsheet, with gold concentrates from the program being run through a bacterial oxidation testwork program both in Perth and at the Michelago Ltd BioGold plant in Shandong Province in China .

In addition, preliminary pit design and mine planning optimization has started and will be upgraded once the new resource model is completed. A Chinese Design Insititute is being engaged to start the process design program and also to plan and design project infrastructure comprising water supply, power, access and tailings dam design.

A 12-month environmental baseline study has been conducted and Golden China plans to continue detailed environmental monitoring during the next 12 months as the company starts preparation of an Environmental Impact Statement (EIS) and Environmental Management Plan (EMP) that will meet both international banking standards and Chinese environmental standards.