The North Mountain joint venture contains three principal areas that are prospective for several styles of gold and copper-gold mineralization - Beishan, quartz veins with gold and base metals; Lushigou and Qiongheba, magnetite-copper skarns 18km north of Beishan, and Xiaojinguo and Dajingou, narrow quartz vein with gold in a separate district 60km southwest from Beishan, site of previous small-scale gold mining.

The North Mountain joint venture tenements consist of four mining leases covering a total of 19sqkm and three exploration licences covering a total of 70sqkm.

 The project is located approximately 300km north of the city of Hami, on the south-west periphery of the Gobi Desert near the border with Mongolia. The project is in a remote area but road access is very good from Hami to the nearby town of Naomaohu. The project area is in flat desert with minimal vegetation and no inhabitants.

 At Beishan, small-scale gold production is currently being undertaken by the joint-venture partner from some five quartz veins containing gold and base metals, hosted in volcaniclastics and sediments intruded by diorite dykes.

 Assays of samples collected by Sino Gold range from 0.5 grams per tonne to 39.1 grams per tonne gold, 3% to 10% zinc and 1% to 5% lead from trench and mine rock chips. Veins generally range from 1 metre to 12 metres thick over strike lengths of 100 metres to 500 metres over an area of 700 metres by 800 metres. In the Beishan Mining Lease, a number of shallow pits and two shallow shafts are being mined using non-mechanised methods. 

 At Beishan West, 500 metres west of the Beishan quartz veins, previous workers have identified a strong Induced Polarisation (IP) anomaly, extending 800 metres long and 200 metres wide, largely untested, indicating potential for substantial sulphide mineralisation. Assays of samples collected from two shallow trenches by Sino Gold range up to 3.5 grams per tonne gold. This IP anomaly presents an immediate target for trenching, deeper penetrating IP survey and early drilling by Sino Gold.

 Sino Gold has the right to earn a 70% interest in the joint venture upon sole funding an agreed amount of exploration expenditure, following an initial six-month option period from the starting date. After reaching the expenditure milestone, then both parties contribute expenditure on a pro-rata basis. In addition, Sino Gold has agreed to make an interest-free loan to the joint venture partner of US$1.2 million, repayable in the event that Sino Gold decides to withdraw from the joint venture. Sino Gold will manage the exploration program.