Overview

The Gold Mountain Mine is located in the foothills of the Borohoroshan Mountain range in Yining County, Xinjiang China, about 40 kilometers north of the downtown of Yining County and 500 kilometers west of Urumuqi, the capital city of Xinjiang. It is about 70 km to the 403 National Highway, 65 km to Yining County Railway Station and 68 km to Yining Airport.

The Company holds one mining license issued by the Ministry of Land and Resources of the Gold Mountain Mine on 27th June 2012, valid from 27th June 2012 to 27th June 2024. This mining license covers an area of approximately 5.7235 sq. km. In addition, the Company holds one gold mining permit issued by the Ministry of Industry and Information Technology for the Gold Mountain Mine on 1st March 2012, valid from 1st March 2012 to 1st March 2017.

The Gold Mountain Mine includes fives prospects, namely the Yelmand prospect, the Mayituobi prospect, the Jinxi-Balake prospect, the Kuangou prospect and the Lion prospect. As of December 31, 2013, the total gold resources and reserves of the Gold Mountain Mine under JORC standards were approximately 3.2 million troy ounces and 2.2 million troy ounces respectively with an average grade of 0.74g/t and .

The ore processing capacity of the Gold Mountain Mine is designed as 5 million tons per annum and the life mine is 22 years. The technology used in Gold Mountain Mine includes open-pit mining, crushing, heap leaching, absorption, desorption-electrolysis and smelting. The Company expects to produce crude gold with purities of 90% to 95%.

The Company commenced ore mining operation in July 2013 and trial production in December 2013. It expects to commence formal production in the second half of 2014 and to achieve the designed ore processing capacity of 5.0 million tonnes per annum in 2015.