Central China Goldfields (AIM: GGG) said that field work at its optioned Cikoleang gold property in Indonesia has identified thirteen gold vein prospects and further activities will focus on five most promising targets, where previously taken samples returned grades of up to 26.6 g/t (grammes per tonne) gold and 1,140 g/t silver.
The most promising targets identified at the prospect include the Cimapag, CLK and Cimubui vein zones in the western part and Cikecapi and Cicurug zones in the southeastern part of the project.
Rock samples from ore extracted by artisanal miners returned grades of 0.86 to 22.2 g/t gold and 5.5 to 232 g/t silver. Two samples taken from a quartz veinlet zone returned 1.19 to 1.48 g/t gold and 2.7 to 16.8 g/t silver. A sample of artisanal miners’ ore from a 300 metre long vein zone at Cikecapi returned 18.1 g/t gold and 1,140 g/t silver. A further four rock samples of vein outcrops returned grades of between 1 and 26.6 g/t gold and 1 to 96.3 g/t silver. Six samples of artisanal miners’ ore from three vein zones at Cicurug returned grades of up to 11.9 g/t gold and 9.9 to 256 g/t silver, while one outcrop sample returned grades of 0.58 g/t gold and 80.4 g/t silver.
Rock samples, each weighing 0.5 to 1.5 kilograms, were processed and analysed by PT. Intertek Utama Indonesia, a subsidiary of FTSE 100 quality and safety services company Intertek (LSE: ITRK).
The company said that the initial results of rock sampling were encouraging and it continued conducting its geological, legal and financial due diligence during its six month option period, which will run until 14 June 2010.
If GGG decides to form a JV (joint venture), it will pay additional US$10,000 upon singing, while its total exposure to the first six month option period amounts to US$75,000.
JV terms include the ownership of 75% of the entity by GGG with Fino holding the 25%. Once GGG funds the initial expenditure of US$2 million, each party will contribute pro rata with their JV proportions.
Should Fino decide against contributing, its interest will be diluted to 12.5% and will be hold constant at that level unless GGG agrees to purchase its stake in the JV company.
The company announced the Cikoleang option agreement in December 2009. Cikoleang represents the company’s first new project since it has shifted focus on Indonesia and the Philippines following the sale of its stake in the China based Nimu copper-molybdenum project and terminated the development of its remaining Chinese project.
According to Malaihollo, the company is continuing to actively review a number of attractive opportunities in SE Asia and Australasia which match its key core skills.
Disclosure: The author holds no positions in the company