Construction activities at Jinshan Gold Mines CSH (217) gold project are proceeding on schedule, with commercial gold production expected to begin in the second quarter of 2007.

A mining contract has been signed with China National Railway Corp, a major Chinese mining contractor. Haul road construction and open pit preparations are starting this month. The heap leach pads are nearly complted and are being readied to start the placement of ore in January and February.

The gold plant facility was pre-fabricated in the US and is being assembled in the new process building. A 500 prson camp is undergoing final completion of civil works and is expected to be ready to house the contract miners this month.

Infrastructure work for power and water is under way to meet the schedule for the process plant start-up, which is planned to start once the weather in Inner Mongolia, warms in the spring of 2007.