CGG/we expect an updated resource estimate by
the end of January 2012. After discussions with management, we believe that the new
estimate could potentially double the existing measured and indicated resource to
around 10 million ounces of gold (inclusive of reserves) based on the exploration work
done on the project since the last estimate (discussed later in this report).
The company currently holds two mining licenses with a total area of 2.9km2, and two
exploration licenses totaling 143.3 km2. China National Gold Group Technical Centre. The Technical
Centre has agreed to provide research and development services to advance the ore
processing technology of the CSH Mine and Jiama Mine for a total of Rmb5 million.
Further, Huatailong has also entered into a purchase agreement with Henan Jinyuan to
purchase from Henan Jinyuan ball mill liners and spare parts for the ball mill liners at
the Jiama Mine for Rmb975,669.38. (HL) Jiama also may have 5 million oz of gold and 250 million oz of silver coming in CGG drill results!