Inter-Citic moves into pre-production, provides permitting update

Inter-Citic Minerals (TSE:ICI) said Tuesday it has moved its Dachang gold project, located in Qinghai province of western China, to pre-production, and offered several updates to its ongoing permitting process.

The Markham, Ontario-based company said it expects to start pre-development work at Dachang, and receive a mining permit for the property, in early 2013.

President James Moore said: "Inter-Citic's work at Dachang originally began as a 'greenfields' project.

"After extensive exploration, including over 160,000 meters of diamond drilling, we believe the Dachang Main Zone, Inter-Citic's first proposed mining area, displays robust preliminary economics as shown in our 2009 Preliminary Economic Assessment because of its large scale, relatively shallow open-pit characteristics, excellent gold resource grade and a competitive China cost platform that provides a low capital expenditure requirement to develop the Company's first mining operations."

It completed a geological resource report (GRR) on the Dachang Main Zone and the Placer Valley Zone, to Chinese formal standards, and will file it with Chinese regulators.

Inter-Citic said it has also retained China Nerin Engineering Co Ltd, an internationally accredited engineering firm, to complete a Chinese-standard feasibility study (CFS), a necessary component to the permitting process. All fieldwork needed for the completion of the CFS will be attained during the current field season, Inter-Citic said.

Following the CFS, Nerin will assist with the finalization of a mineral resources development and utilization program, and the associated project application report for the Dachang property, Inter-Citic said.

The company also said that, in May 2011, it engaged the Chinese Research Academy of Environmental Sciences to complete an environmental and social impact report, which will be done by 2012.

Inter-Citic said the production of each of these reports mark the primary stages of the Chinese permitting process for mine and mill development.

Additionally, the company said it retained Micon International to prepare a new NI 43-101 compliant preliminary economic assessment for Dachang. Inter-Citic said it expects to publish this report in 2012.

Moore added: "The company continues to aggressively explore the more than 50 additional targets at Dachang, outside the Dachang Main Zone, while at the same rime having transitioned from a successful and growing exploration story to one of pre-production.

"The company is on a track that will allow for the issuance of a mining permit and pre-development work to commence in early 2013."

In Toronto, Inter-Citic shares slipped three percent to $0.97, as of 12:45 pm EDT.