Sino Gold Ltd said it has increased estimate of economically mineable gold at its Jinfeng project in China's Guizhou Province to 17.6 mln tons of ore containing 3.2 mln ounces of gold, up from an April 2006 ore reserve estimate of 2.9 mln ounces.

It said the grade of ore reserves to be accessed by underground mining has increased 15 pct to 6.0 grams per metric ton, increasing the overall ore reserve grade, including ore to be accessed by open cut mining, to 5.7 grams per ton from 5.4 grams per ton previously.

Sino Gold said the increase in the ore reserve estimate followed appraisal drilling, which is continuing, with five drill rigs operating to expand the already large orebody.

Sino Gold chief executive Jake Klein said the reserve increase provides further confirmation that Jinfeng is a long-life, low-cost operation based on a high-grade orebody.

Total resources, including ore not yet classified as economically mineable, now totals 4.6 mln ounces.

Klein said the grade increases reflects the strengthening of mineralization as the system deepens.

"Drilling continues to indicate that we have not yet found the limits of the orebody," he said.

Jinfeng is in the process of starting commercial mining.

Once in production, Jinfeng will be the one of the largest gold mines in China, with expected initial production of 180,000 ounces per annum, Sino Gold said.