Overview
Grand TG is a Hong Kong based listed gold producer with strong exposure to gold.
In May 2008, the Company expanded its investment and business into the gold mining sector in the PRC by acquiring 72% ownership of Taizhou Gold Mines (“Taizhou Mining”), while China Gold Association owns another effective 8% stake therein. China Gold Association (“CGA”), a shareholder and JV partner of the Company, is the only national gold industry organization established by the Chinese Government and has substantial market intelligence on the China gold mining industry.
The Company's current principal gold project – Taizhou Mining is located in Tongguan County, Shaanxi Province along the Xiao Qinlin Mineralized Belt, the second largest gold mineralization and production region in China.
Strategy 1 : Establish Strategic Foothold in Proven Mineralized Belts in China
Taizhou Mining had a historical reserve and resource of 31 tonnes of gold, with a average grade of 5 + g/t.
Production is currently carried out at only 2 gold mineralized structures (veins Q576 and Q470), producing approximately 75,000 tonnes of ore per annum. Taizhou Mining's gold production cost at between US$150 – US$180/oz in 2007 is significantly lower than that of other gold producers at between US$350 – US$450/oz. The lower costs can be attributable to a higher gold grade and recovery rate compared with other Chinese peers.
Taizhou Mining offers tremendous growth potential in gold reserves and revenue. In 2008, the Company carried out an exploration program of 8,600 m of drilling and obtained an additional 4.6 tonnes of gold to its mineral resource.
Taizhou Mining's rich polymetallic credits including silver, lead copper and molybdenum offer added growth to the profitability and resource potential of the Company.
The Chinese gold industry is fragmented and underdeveloped. In order to improve the industry competitiveness and healthy development, Central Government strongly encourages efficient exploration and consolidation within the gold industry.
According to a study completed by USGS in 1999, the Qinlin geological belt, which hosts several million ounce gold deposits, can be one of the most prospective areas in the world for Carlin type gold deposits outside of Nevada. However, there have been many gold mineralizations identified but not tested at depth due to lack of access to equity market to fund exploration and development. Taking advantage of the economies of scale with the Company's centralized management in Tongguan, the Company is well positioned to capitalize on the opportunities to acquire and consolidate small scale and near production gold properties at attractive prices within the region.
Strategy 2 : Consolidate Small Scale, Near Production Opportunities
