Dragon Mountain Gold (ASX:DMG) has confirmed to the market that the Jinshan leases drilling program has commenced in the Gansu province of central China.
Robert Gardner, chairman, said (in reference to the program): "It is not only ahead of schedule but initial indications are extremely encouraging."
"Our expectations from this program and our follow up programs are for significant new mineralisation at depth and along strike from known deposits.”
“Our strategy has previously been to concentrate our exploration expenditure on the Liba lease where we have proven JORC resources of approximately 2.80 million ounces."
"We are now expanding into our Jinshan lease."
On the four Jinshan tenements, exploration contracts have been signed with the Gansu Non-Ferrous Metallurgical Bureau.
Dragon stated they expected results of the exploration will meet both foreign and Chinese reporting standards, with drilling on the western extension of the Jinshan 30 mineralisation beginning in early September.
Exploration includes geological mapping, trench sampling and possible IP traversing has started on the three smaller tenements to the west.
Subsequent drill testing of existing targets in two of these tenements will be undertaken.
Gardner remains very optimistic about the new program, saying: "The initial results are indicating that Jinshan has similar geology to Liba with larger orebodies."
"Jinshan is at least as prospective as Liba and we expect a significant new resource will be defined.”
“To date the Group has only explored the eastern portion of the Jinshan 30 mineralised zone in the Jinshan main zone."
"Recent drilling by the Group had shown mineralisation extends to depths in excess of 250m and remains open to the north."
"There are several major zones of mineralisation, of similar strike extent and grade to the Jinshan main zone, that have not been drill tested."
"These provide excellent targets, at grades higher than Liba, for discovery of significant new gold resources.”