Inter-Citic's Dachang Gold Project is a 279 km2 property in the Qinghai Province of Western China. A 20,000 metre drill program is now underway at Dachang aimed at both infill and resource expansion, as well as a 10,000 metre trenching program across previously identified gold soil anomalies. The first, second, third and fourth sets of results from the 2009 drill season have now been reported. A step-out hole was reported December 1, 2009 7.5 km to the north-west of the DMZ, which is mineralized and appears similar in geology to the DMZ. Trenching in 2009 has discovered new areas of mineralization.

On January 11, 2010, Inter-Citic announced the discovery of new style of gold mineralization on the Carbonate Thrust Fault, which crosses the Dachang propertyapproximately 9 km from the DMZ. (Location Map - JPG 700K and Area Detail Map PDF - 1.1 MB). A second drill hole near the Carbonate Thrust Fault, CJV-923, was reported on January 25, 2010 approximately 750 m to the east of the previous discovery (Location Map - JPG 70K and Area Detail Map PDF - 420 KB).

2009 Preliminary Economic Assessment (Scoping Study) and Resource Update:

On August 20, 2009, Inter-Citic filed a new, independent NI 43-101 Technical Report - Preliminary Economic Assessment (PEA or Scoping Study) and Resource Update - Dachang Gold Project (PDF 9.4 M). The highlights were announced in a press release on July 6, 2009. The Scoping Study / Preliminary Economic Assessment was prepared at an early stage to demonstrate positive economics even though exploration continues at Dachang. It was prepared using only the mineralization discovered in the Dachang Main Zone (“DMZ”).

The preferred case reported in the PEA/Scoping Study comprises of an open pit mine on the DMZ delivering 2 Million tonnes per year of ore to a fully integrated flotation, Biox® and CIL circuit which would produce approximately 165,000 oz gold doré per year. Highlights of the preferred case reported in the PEA/Scoping Study includes:

• At a gold price of US$750/troy ounce the Dachang project is estimated to generate an after tax internal rate of return (IRR) in excess of 40% and an after tax project Net Present Value (NPV5) at a 5% discount rate in excess of US$198 million.
• At a gold price of US$800/troy ounce, the after tax IRR increases to 47% and NPV5 exceeds US$241 million.
• Total gold production of approximately 1.5 million ounces is forecast to be generated during a mine life of approximately 9 years.
• Estimated minesite cash operating costs average US$404/oz and project capital cost is forecast to be US$104 million for the complete facilities and all infrastructure.

The scoping study economic model is based upon conceptually scheduling an estimated 17.8 Million tonnes of mineral resources at an average grade of 3 grams gold/tonne. This was derived from pit optimizations generated from using the resource model prepared to update the mineral resource estimate for the Dachang Main Zone (“DMZ”) as reported below. It does not include resources contained in areas such as Placer Valley. Please see the full press release for highlights or the full NI 43-101 Technical Report here: Scoping Study (PDF 9.4 M).

Resource Update Announced:

The Company also reported an update to its inventory of mineral resources for Dachang, on July 6, 2009, as follows:

• Estimated Measured and Indicated mineral resources of 12.4 million tonnes grading 3.37 g/t Au (1.34 million ounces contained gold) retaining over 90% from the original Inferred mineral resource estimate.
• Estimated Inferred mineral resources of 11.9 million tonnes grading 3.00 g/t Au (1.14 million ounces contained gold) for the Dachang Main Zone (“DMZ”), and 2.4 million tonnes grading 4.82 g/t Au (0.37 million ounces contained gold) for the NR-2 and other areas, for a total Inferred mineral resource estimate of 14.3 million tonnes grading 3.31 g/t Au (1.52 million ounces contained gold).

The full updated independent technical report dated August 20, 2009, is filed on SEDAR and is available here: NI 43-101 Technical Report - Preliminary Economic Assessment (PEA or Scoping Study) and Resource Update - Dachang Gold Project (PDF 9.4 M).

Metallurgy Results Reported:

On March 2, 2009, Inter-Citic reported on first stage metallurgy at Dachang. Results to date demonstrate that high recoveries of gold (96%) can be achieved using conventional flotation methods. The concentrate produced contains 30 g/t gold and is considered to be marketable. Further test work has shown that the rougher concentrate can be upgraded to 57.7 g/t gold through regrind and cleaning stages. This results in an overall recovery of 94% of the gold into a final cleaner concentrate with a mass of only 6.2% of the original.

On May 7, 2009, Inter-Citic reported results from bio-leaching/CIL test work conducted on a bulk flotation concentrate sample from the Dachang gold project. The results showed that high gold leach recoveries of 89% can be achieved by bio-leaching and conventional CIL. Fast leach kinetics were observed with 88.6% of the gold leached into solution after 4 hours. The leach kinetics curves also showed no signs of “preg robbing” occurring. “Preg-robbing” is where the presence of “preg-robbing carbon”, defined as carbonaceous material that preferentially absorbs gold from solution thereby reducing gold leach recoveries. Overall gold recoveries to doré are predicted to be 85%, assuming 96% for the flotation stage, 89% for the BIOX/CIL stage, and 99% for solution/goldroom losses.

2008 Drill Program Results:

Inter-Citic completed a 50,000 metre drill program in 2008. A total of 300 of the 325 exploration drill holes reported gold mineralization. Results have now been released for the complete sets of drill holes drilled in 2008 - June 26, 2008 with MAP (PDF - 1.4 MB) , July 18, 2008, August 7, 2008, September 29, 2008, November 3, 2008, December 3, 2008, January 6, 2009, January 21, 2009, February 4, 2009. and February 17, 2009. A map of all 2008 drill holes can be seen here (PDF- 3.1 MB). A full list of reported results for 2008 can be seen on our Maps & Data page. Up to seven drills operated at Dachang in 2008, working on both infill drilling to further define the existing 43-101 inferred mineral resource estimate on the DMZ in preparation for a scoping study, as well as additional drilling in new areas focussed on resource expansion. IP geophysical exploration has further extended the DMZ and discovered new areas of mineralization.

A 28,000 metre drill program was completed in 2007. Click here to see a map of all drill hole locations for 2007, and click here to see all trenches from 2007's exploration season. In 2007, 180 of 187 drill holes reported near-surface gold mineralization in the area of the Dachang Main Zone. As a result, the Company reported an update of its mineral resource on April 10, 2008. A map of the 2008 exploration plan can be seen here (PDF - 2.5 MB).

2007 Drill Program Results:

In 2007 the company completed 196 drill holes for a total of 27,926 metres of drilling at Dachang. Of these, 24,312 metres of drill testing was on the Dachang Main Zone (DMZ) and it’s eastern extensions. A total of 164 drill holes were completed on the DMZ in 2007, representing both infill drilling to confirm 2006 drill intercept continuity and drilling in new areas that resulted in the extension of the DMZ by approximately one kilometre to the east of the current resource area. Gold mineralization was intersected in 152 or 93% of these holes on the DMZ. In addition to drilling on the DMZ, 3,614 meters in 32 holes of HQ drilling was completed on the Placer Valley and Ruby Zones during the 2007 exploration program.

The 2007 exploration season began with the drilling of new targets [map] the first week of May, 2007. Among the first results reported on June 12, 2007, is hole CJV-160, which intersected 58 metres of continuous mineralization with an average grade of 5.3 gpt gold. On August 13, 2007 Inter-Citic reported its second set of drill results. All 17 holes reported gold mineralization in newly discovered shallow dipping zones. Drill results include 16 metres grading 4.28 GPT gold, 10 metres grading 5.75 GPT, 9m grading 4.53 GPT and 12 metres grading 3.34 GPT. On September 17, 2007, a further 33 holes were reported, including hole CJV-207A with 47 metres of continuous mineralization averaging approximately 6.64 grams per tonne contained gold. A map of the new exploration area can be seen here. On October 15 , 2007, a further 34 holes were reported, 33 of which contained gold mineralization. Best results include hole CJV-218 with 28 metres of continuous mineralization averaging approximately 6.77 grams per tonne contained gold. A series of trenches were also reported. Trench number TC-1401 returned 28 metres of continuous mineralization with an average gold grade of 9.11 grams per tonne gold. Trench TC-1401 is located on-strike and 1,200 metres from the eastern extent of the Dachang Main Zone's current resource area, and 500 metres east of the most easterly diamond drill section on the Dachang Main Zone extension. As of this release, approximately 15,000 m of drilling has been reported - about half of the 2007 program. On November 26, 2007 Inter-Citic reported on 35 new diamond drill holes at Dachang. All 35 drill holes reported mineralized gold zones, with aggregate widths up to 45 metres within potential open pit depths.

On January 8, 2008, Inter-Citic reported on 25 new diamond drill holes at Dachang of which 24 returned mineralized gold zones, with aggregate widths up to 34 metres within potential open pit depths.

Drill hole CJV-302 was drilled 100 m east of and 150 m south of trench number TC-1401 reported in the Company's press release of October 15, 2007. Trench TC-1401 reported 28 metres of continuous mineralization with an average gold grade of 9.11 grams per tonne gold. Trench TC-1401 is located on-strike and approximately 1000 metres east of the Dachang Main Zone's defined resource area.

On March 3, 2008, Inter-Citic reported on the final 27 diamond drill holes of 2007 at Dachang of which 25 returned mineralized gold zones, with aggregate widths up to 44 metres within potential open pit depths. A map of 2007's drill hole locations can be seen here.

Most of the reported trenching in 2007 that is outside the DMZ Extension represents new areas of discovery, including the South East Anomaly (SEA) with 35 trenches, the mostly unexplored Placer Valley Zone (PVZ) with 67 trenches, and additional others areas surrounding the DMZ (OTH). A map of trenching in 2007 can be seen here.

Trenching in 2007 again defined many new areas of gold mineralization both along strike with the Dachang Main Zone and on new fault zones within 8 kilometres of the DMZ. Trenching continues to be one of the most successful and cost-effective methods of gold exploration at Dachang due to the thin soil cover and near-surface mineralization observed throughout the property. A consistent spatial relationship has been observed between the gold in soil anomalies, trench values and underlying strongly altered and mineralized fault zones, and was what originally led to the discovery of the DMZ resource area. Favourable trench results provide targets of priority for the Company’s 2008 drilling program.

Inter-Citic completed its third season of exploration at Dachang and first major drill program in 2006. This extensive drilling program of over 15,000 m focussed on resource definition and expansion at Dachang East Area Main Zone (DMZ). Several new targets [see map] in Dachang East were identified for priority exploration in 2007. In 2006, 96 of 101 drill holes on the Dachang Main Zone contained near-surface gold mineralization.