SHANDONG Gold Group says it has discovered deposits that could be China’s largest gold discovery. The deposits are at Xiling mine, Shandong Province in the nation’s east.
|Most of Shandong Gold’s properties are in the eastern seaboard province of Shandong.|
A statement on the website sdchina.com, which is supervised by the provincial government, said that Xiling mine had identified 382.58 tons of gold reserves and that the total could reach 550 tons once exploration was complete in two years.
This would make it China’s largest mine and when operating at full capacity, Xiling would have a mine life of 40 years.
Chinese gold companies, including Shandong which is the nation’s second largest producer behind Zijin Mining Group, have stepped up their search for more domestic deposits as well as eyeing overseas acquisitions. According to the Ministry of Industry and Information Technology, China wants to increase reserves by 3000 tons to as much as 14,000 tons by 2020.
A recent development has seen Shandong in advanced talks to buy a 50% stake in Barrick Gold’s Veladero gold mine in Argentina, which is estimated to be worth at least US$1 billion. Despite Barrick being in talks with Shandong and Zijin, it is believed the latter is no longer involved.
Veladero was the site of another pipe rupture in late March, the third incident in 18 months involving cyanide-bearing solution. This may delay an agreement but Reuters reports that it is unlikely to reduce the Chinese company’s interest in the asset.
The news service reports that a source informed them that the talks with Shandong were at the “final stage of agreeing the conditions and amounts”.
On March 28, a coupling between two pipes on the leach pad processing facility at Veladero failed, causing a gold and diluted cyanide solution to spill. Although all solution was contained within the operating facility and Barrick said there was no impact on people or the environment, provincial authorities ordered Barrick to stop adding cyanide to the leach pad pending repairs.
The purchase plan being discussed would also see Shandong acquire 50% of Barrick’s nearby undeveloped Pascua-Lama gold and silver project on the border of Argentina and Chile. This was put on hold in 2013 due to environmental issues, political opposition, labour unrest and $8.5 billion development costs.