At the Jiama Mine, a 37,000 metre (71 holes) drilling program was completed in the fourth
quarter of 2011 within the mining permit area. In order to increase production and mining capacity, the Company is
in the process of updating the early feasibility study and reserve estimate. The feasibility study update and reserve
estimate are expected to be completed in 2012 and will be used in to determine the optimal scope and scale of Phase
II mine expansion ....China Gold International’s cash balance at June 30, 2012 was US$333.9 million


China Gold International’s outlook for the remainder of 2012 and beyond remains positive

as the Company continues to work towards improving operating results and expanding

operations at its current mine sites. In addition, the Company remains focused on

evaluating targets for possible acquisitions !


The Jiama Mine  

The Phase II development, which

contemplated an expansion to a 12,000 tpd mining operation, is under review. The Company has retained engineering

firms to conduct a feasibility study in contemplation of building a larger scale mining operation using the additional

drilling results as the basis for expanding the mine to support an even larger scale of operations.

CSH/After discussions with management, we believe that the new
estimate could potentially double the existing measured and indicated resource to
10 million ounces of gold

Plans call for Jiama mine in Tibet to produce 63,000 tons annually!