EXHIBIT 99
Report to:
CONTINENTAL MINERALS CORPORATION
[OBJECT OMITTED]
AND
GREAT CHINA MINING INC.
Technical Report on the Resource Audit of the
Xietongmen Project,
Tibet, People's Republic of China
Document No. 0552040101-REP-R0001-00
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Report to:
CONTINENTAL MINERALS CORPORATION
[OBJECT OMITTED]
AND
GREAT CHINA MINING INC.
TECHNICAL REPORT ON THE
RESOURCE AUDIT OF THE
XIETONGMEN PROJECT,
TIBET, PEOPLE'S REPUBLIC OF
CHINA
MARCH 24, 2006
Prepared by "Andy Nichols" Date March 24, 2006
----------------------------------- ----------------------------------
Andy Nichols, P.Eng.
Prepared by "Greg Mosher" Date March 24, 2006
----------------------------------- ----------------------------------
Greg Mosher, P.Geo.
Reviewed by "Tim Maunula" Date March 24, 2006
----------------------------------- ----------------------------------
Tim Maunula, P.Geo.
----------------------------------- ----------------------------------
Authorized by"Tim Maunula" Date March 24, 2006
----------------------------------- ----------------------------------
Tim Maunula, P.Geo.
WARDROP
905-1130 West Pender Street, Vancouver, British Columbia V6E 4A4
Phone: 604-408-3788 Fax: 604-408-3722 E-mail: vancouver@wardrop.com
REVISION HISTORY
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SUMMARY
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The Xietongmen Property is situated 240 kilometers southwest of
Lasha, in southwest Tibet, People's Republic of China. The Property
is underlain by dacitic tuffs of Late Cretaceous to Eocene age that
are in part altered and contain disseminated copper and gold
mineralization.
The Property is comprised of one Mineral Resource Exploration
Permit (Certificate No. 0100000420086) that is 12.9 square kil-
ometers in area.
Under an agreement signed in January 2005, Continental acquired the
right to purchase 50% or 60% of the shares of Highland Mining Inc.
("Highland"). Highland owns Tibet Tian Yuan Minerals Exploration
Ltd. (Tian Yuan), a private Chinese corporation that holds the
Xietongmen Exploration Permit. A 50% interest in Highland can be
acquired for US$7 million; a 60% interest can be purchased for
US$10 million.
During 2005, Continental drilled 62 holes (20,932 meters aggregate
length) to test the distribution and grade of the copper and gold
mineralization at Xietongmen. Continental subsequently carried out
an in-house resource estimate that was based primarily upon the
assay results obtained from the 2005 drill campaign.
Wardrop Engineering Inc. (Wardrop) has been retained by Continental
Minerals Corporation (Continental) to conduct an audit of the Con-
tinental resource estimate.
Mineralization at Xietongmen occurs within a west-northwest
trending, gossanous alteration zone from 150 to 500 meters in
width, that has developed within dacitic tuffs and has been traced
over 1,500 meters by geochemical surveys, geological mapping and
test pit excavation, and for at least an additional 2,500 meters by
prospecting.
Mineralization is comprised of a gold-bearing oxide cap from which
copper has been leached, an underlying auriferous zone of mixed
oxide and hypogene sulphide with variable concentrations of
supergene chalcocite that commonly enrich the uppermost part of the
deposit in copper, and a thick underlying hypogene zone that
contains primary copper and gold mineralization. The near-surface
oxide and mixed supergene/hypogene zones rarely extend more than
about 50 meters below surface.
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Cautionary Note to U.S. Investors concerning estimates
of Measured and Indicated Resources
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This section use the terms `measured resources' and `indicated
resources'. The Company advises investors that while those terms
are recognized and required by Canadian regulations, the U.S.
Securities and Exchange Commission does not recognize them. U.S.
Investors are cautioned not to assume that any part or all of
mineral deposits in these categories will ever be converted into
reserves.
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Cautionary Note to U.S. Investors concerning estimates
of Inferred Resources
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The following section uses the term `inferred resources'. The
Company advises investors that while this term is recognized and
required by Canadian regulations, the U.S. Securities and Exchange
Commission does not recognize them. `Inferred resources' have a
great amount of uncertainty as to their existence, and great
uncertainty as to their economic and legal feasibility. It cannot
be assumed that all or any part of a mineral resource will ever be
upgraded to a higher category. Under Canadian rules, estimates of
Inferred Mineral Resources may not form the basis of economic
studies, except in rare cases. U.S. Investors are cautioned not to
assume that any part or all of an inferred resource exists, or is
economically or legally mineable
- --------------------------------------------------------------------------------
At a copper-equivalent cutoff grade of 0.5%, Continental has
estimated that the Xietongmen deposit contains a Measured Resource
of about 106.3 million tonnes of with an average grade of 0.49%
copper and 0.73 grams / tonne gold, to give a copper equivalent
grade of 0.91%, and an Inferred Resource of 28.8 million tonnes
with an average grade of 0.43% copper and 0.59 grams / tonne gold
to give a copper equivalent grade of 0.78%.
At the same cutoff, Wardrop estimated a Measured Resource of 118.6
million tonnes with an average grade of 0.43% copper and 0.73 grams
/ tonne gold to give a copper equivalent grade of 0.85%. The
estimated Inferred Resource at a cutoff of 0.5% copper equivalent
is 14.0 million tonnes with an average grade of 0.34% copper and
0.67 grams / tonne gold to give a copper equivalent grade of 0.78%.
The two estimates differ by about seven percent (7%) with respect
to contained metal.
At the present level of knowledge, the Continental resource
estimate for the Xietongmen deposit is considered by Wardrop to be
reliable.
Continental is proceeding with additional drill evaluation of the
Xietongmen deposit; no departures from their present procedures are
recommended.
TABLE OF CONTENTS
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1.0 Introduction and Terms Of Reference..................................1
1.1 Introduction................................................1
1.2 Terms of Reference..........................................1
2.0 Reliance on Other Experts............................................2
3.0 Property Description.................................................3
4.0 Physiography, Climate, Accessability, Local Resources................6
5.0 History..............................................................7
6.0 Geological Setting...................................................8
6.1 Regional and Local Geology..................................8
6.2 Property Geology............................................9
7.0 Deposit Types........................................................11
8.0 Mineralization.......................................................12
9.0 Exploration..........................................................13
10.0 Sampling Method and Approach.........................................15
11.0 Sample Preparation, Analysis and Security............................16
12.0 Data Verification....................................................18
13.0 Adjacent Properties..................................................19
14.0 Metallurgical Testing................................................20
15.0 Mineral Resource Estimate............................................21
15.1 Data........................................................21
15.2 Composite Length............................................21
15.3 Capping.....................................................21
15.4 Bulk Density................................................22
15.5 Geological Interpretation...................................22
15.6 Spatial Analysis............................................22
15.7 Resource Block Model........................................23
15.8 Interpolation Plan..........................................23
15.9 Copper Equivalency Formula..................................23
15.10 Mineral Resource Classification.............................23
15.11 Mineral Resource Tabulation.................................24
16.0 Conclusions..........................................................25
17.0 Recommendations......................................................26
18.0 References...........................................................27
19.0 Certificates of Authors..............................................28
19.1 Certificate of Andrew Nichols...............................28
19.2 Certificate of Greg Mosher..................................30
TABLES
Table 15-1: Xietongmen Bulk Densities.........................................22
Table 15-2: Variography Parameters............................................22
Table 15-3: Continental & Wardrop Resource Summaries by Cutoff................24
FIGURES
Figure 3-1: Xietongmen Project Location........................................4
Figure 3-2: Xietongmen Property Outline........................................5
Figure 4-1: Xietongmen Site...................................................6
Figure 9-1: Plan of 2005 Drill Holes.........................................14
Figure 11-1 Xietongmen Drill Core Sampling and Analytical Flow Chart.........16
1.0 Introduction and Terms Of Reference
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1.1 INTRODUCTION
The Xietongmen Property is situated 240 kilometers southwest of
Lhasa, in southwest Tibet, People's Republic of China. The Property
is underlain by dacitic tuffs of Late Cretaceous to Eocene age that
are in part altered and contain disseminated copper and gold
mineralization.
Continental Minerals Corporation (Continental) has the right to
acquire up to 60% interest in the mineral exploration license that
comprises the Xietongmen Property (Property).
During 2005, Continental drilled 62 holes (20,932 meters aggregate
length) to test the distribution and grade of the copper and gold
mineralization at Xietongmen. Continental subsequently carried out
an in-house resource estimate that was based primarily upon the
assay results obtained from the 2005 drill campaign.
1.2 TERMS OF REFERENCE
Wardrop Engineering Inc. (Wardrop) has been retained by Continental
Minerals Corporation (Continental) to conduct an audit of a
resource estimate that Continental has carried out on the
Xietongmen copper-gold property and reported in a news release
dated February 8, 2006. This report documents the review by Wardrop
of the Continental resource estimate.
2.0 RELIANCE ON OTHER EXPERTS
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Wardrop has relied on others for information in this report.
Information from third-party sources is referenced. Wardrop has
used this information under the assumption that it was prepared by
Qualified Persons.
Data provided to Wardrop is listed in the applicable sections of
the report.
As part of the preparation of this report, a site visit to the
Xietongmen Property was carried out by Andy Nichols, P.Eng, during
the period 26th to 28th October 2005.
3.0 PROPERTY DESCRIPTION
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The Xietongmen property is situated 240 kilometers southwest of
Lhasa, in Xietongmen County, Rikaze Prefecture, southwest Tibet,
People's Republic of China. The center of the Property is at
approximately 29.38(degree) North Longitude and 88.43(degree)East
Latitude. (Figure 3.1)
The Property is comprised of one Mineral Resource Exploration
Permit (Certificate No. 0100000420086) that is 12.9 square kil-
ometers in area. Wardrop has not verified the legal status of the
Property.
Under an agreement signed in January 2005, Continental acquired the
right to purchase 50% or 60% of the shares of Highland Mining Inc.
("Highland"). Highland owns Tibet Tian Yuan Minerals Exploration
Ltd. (Tian Yuan), a private Chinese corporation that holds the
Xietongmen Exploration Permit. A 50% interest in Highland can be
acquired for US$7 million; a 60% interest can be purchased for
US$10 million.
To acquire the initial 50%, Continental must: 1) pay US$2 million
for 50% of the currently outstanding Highland shares - US$1.2
million upon Chinese and Canadian regulatory approval, and the
balance of US$800,000 within one year, and 2) provide a further
US$5 million investment in Highland to fund exploration of the
Xietongmen Project.
Of the US$5 million, exploration expenditures of US$3 million were
to be funded by November 9, 2005 with a further US$2 million of
exploration expenditures funded by November 9, 2006. Continental
can then increase its interest in Highland to 60% within the
following year through investment of an additional US$3 million in
Highland to fund exploration. Continental is the operator of the
project.
The Exploration Permit is valid until July 01, 2006. Maintenance of
the Permit requires payment of an annual fee equivalent to about
CAD$20.00 / square kilometer (CAD$258 / year total), as well as
work commitments equivalent to CAD$80,000 to $100,000 per annum.
There are no other financial or environmental encumbrances on the
Property.
All permits necessary to conduct the presently planned work program
are in place.
Figure 3-1: Xietongmen Project Location
[Figure omitted]
Figure 3-2: Xietongmen Property Outline
[Figure omitted]
4.0 PHYSIOGRAPHY, CLIMATE, ACCESSABILITY, LOCAL RESOURCES
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The Xietongmen Property is located approximately 240 kilometers
southwest of Lhasa, the provincial capital of Tibet, and about 50
kilometers from Rikaze, the local capital. A two-lane paved road
passes within one kilometer of the southern boundary of the
Property and four-wheel drive roads provide access to that portion
of the Property that has been tested by drilling. (Figure 4.1)
The area of current exploration is at an altitude of approximately
4,200 m above sea level.
Vegetation and soil cover on the mountain sides are sparse.
Abundance and type of vegetation is determined by rainfall and
water supply.
Figure 4-1: Xietongmen Site
[Figure omitted]
The average annual temperature is 6.3o C, the temperature ranges
from -5 to +15o C in December to +10 to >25o C in the summer.
Annual precipitation is about 420 millimeters and most falls during
the July - August monsoon period. The area has about 250 frost-free
days per annum. The climate is not extreme; exploration and
exploitation can be conducted on a year-round basis.
5.0 HISTORY
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The following is excerpted from Rebagliati, 2004.
During the period 1983 - 1985, the Central Chinese Government
funded regional geological surveys at a scale of 1:1,000,000.
The Tibet Geological Bureau sponsored 1:500,000-scale regional
geochemical stream sediment surveys during the period 1989-1990.
In 2000 the Tibet Geological Bureau implemented follow-up
investigation of a gold anomaly that had been detected by the
regional stream sediment surveys. This work included geological,
geophysical and soil geochemical surveying and the excavation of
several widely spaced test pits to determine the cause of the soil
geochemical anomaly.
In 2001 and 2002 the 6th Geological Exploration Team of Tibet
excavated adits PD01 (172 meters) and PD04 (443 meters) to
determine the nature and tenor of the mineralization. Consecutive
two-meter-long channel samples were cut from the toe of the adit
walls.
In December 2002, Honglu Investment Holdings, Inc. (Honglu)
acquired the Property and an Exploration License through its 65%
owned subsidiary Danlu Resource Development Co. Ltd.
In July 2003, Great China Mining Inc. (Great China Mining) acquired
a 100% interest in the Property from Honglu and drilled two
vertical holes (ZK301 and ZK701) with an aggregate length of 703 m.
In January 2005, Continental entered an agreement with Great China
Mining to acquire up to a 60% interest in the Property, and in
April 2005, began a core drilling program.
6.0 GEOLOGICAL SETTING
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The following description is largely excerpted from Rebagliati,
2004.
6.1 REGIONAL AND LOCAL GEOLOGY
The tectonic framework of China is dominated by three global
orogenic systems: the Central-Asian or Paleo-Tethyan, the
Circum-Pacific and Tethys-Himalaya systems. Relevant to the
Property area, the Tethys-Himalaya system in southwestern China is
the product of subduction of the Pacific Ocean floor beneath China,
and the indentation of the Indian continent into Eurasia. Fold
belts are dominantly products of subduction and accretion of
oceanic complexes and were the focus of deformation in
Paleozoic-Mesozoic cratonic collisions during final ocean closures.
The Gangdese Arc is a continental plutonic-volcanic complex that
formed in two stages during the late Jurassic-early Cretaceous and
the late Cretaceous-Tertiary subduction of Neo-Tethys oceanic crust
beneath the Lhasa terrane, and includes both volcanic and intrusive
rock types of intermediate to felsic, calc-alkalic composition.
Plutonic activity ranged from 120 Ma to 30 Ma (million years).
West of Lhasa, the Gangdese thrust juxtaposes Late Cretaceous-age
Xigase Group forearc basin deposits of the Lhasa Block over Tethyan
sedimentary rocks of the Indian plate.
In the region of the Xietongmen Property, Carboniferous to
Tertiary-age volcanic and sedimentary rocks are intruded by
Cretaceous to Tertiary-age granitic plutons. Major east-trending
faults are cut by northeast- and north-trending faults and many
units are in fault contact.
In the Xietongmen property region, the Gangdese batholith is
characterized by east-west elongated plutons with preserved
remnants of Cretaceous to Tertiary volcanic rocks.
Known styles of mineralization within the Gangdese Arc are typical
of magmatic arc settings in the Andes and southwestern North
America.
The volcanic and intrusion-hosted Xietongmen copper-gold deposit is
located in the central part of the arc.
6.2 PROPERTY GEOLOGY
The Property is underlain by three major geological units: 1) a
sequence of dacitic tuffs, 2) a granodiorite pluton, and 3) a late
hornblende-quartz diorite intrusive.
The dacite tuffs host the mineralization and are assumed to belong
to the Linzizong Formation of Late Cretaceous to Eocene age. These
tuffs strike west-northwest and dip 40(0) to 50o to the north.
The volcanic rocks were affected by contact metamorphism that is
attributed to emplacement of a biotite granodiorite pluton located
near, and extending east of, the eastern property boundary.
The volcanic sequence has also been intruded by several bodies of
hornblende quartz diorite that are younger than the granodiorite.
The largest diorite bodies are located immediately west of the area
of current drilling, and extend as fault-dissected bodies to the
south and west of the Xietongmen deposit.
Faulting is common within and near the Xietongmen deposit.
West-northwest striking, moderately north-dipping, bedding-parallel
structures occur in the footwall of the deposit, and may also form
parts of the hangingwall. These faults are cut by steep,
north-trending faults.
Figure 5.2: Xietongmen Property Geology
[Figure omitted]
7.0 DEPOSIT TYPES
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The proximity to the Gangdese batholith and diorite porphyry stock,
and the broad extent and form of the gold-copper mineralization,
suggest that the Xietongmen deposit is a porphyry-type gold-copper
deposit, although atypical of this class in that the mineral host
is the country rock rather than the intrusive. The deposit also has
minor gold copper- zinc skarn-like features that have been
overprinted by a contact metamorphic aureole associated with the
Gangdese batholith.
8.0 MINERALIZATION
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Excerpted from Rebagliati, 2004
Mineralization at Xietongmen occurs within a west-northwest
trending, gossanous alteration zone from 150 to 500 meters in
width, that has developed within dacitic tuffs and has been traced
over 1,500 meters by geochemical surveys, geological mapping and
test pit excavation, and for at least an additional 2,500 meters by
prospecting.
Mineralization is comprised of a gold-bearing oxide cap from which
copper has been leached, an underlying auriferous zone of mixed
oxide and hypogene sulphide with variable concentrations of
supergene chalcocite that commonly enrich the uppermost part of the
deposit in copper, and a thick underlying hypogene zone that
contains strong primary grades of copper and gold. The near-surface
oxide and mixed supergene/hypogene zones rarely extend more than
about 50 meters below surface.
Figure 7.1: Alteration Zones, Xietongmen Deposit area
[Figure omitted]
9.0 EXPLORATION
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Continental has completed the following exploration on the property:
1) Geological mapping at scales ranging from 1:5,000 to 1:1,000 in
the southern half of the property and some of the surrounding
area.
2) Optical petrography and scanning electron microscopy of about 110
polished thin sections to evaluate rock types and to define the
mineralogy of alteration and mineralization assemblages.
3) Rock chip geochemistry of some 300 surface samples, mostly from
within about 1,000 meters of the area of current drilling.
4) Collection of 86 soil geochemical samples, northwest of the area
of drilling, along five grid lines spaced 100 meters apart.
5) Isotopic dating of alteration sericite at 47.1+/-0.3 Ma.
6) 63 drill holes with an aggregate length of 21,330 meters.
Figure 9-1: Plan of 2005 Drill Holes
[Figure omitted]
10.0 SAMPLING METHOD AND APPROACH
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Excerpted from Rebagliati and Lang, 2006
Drillcore was collected from the drill sites and delivered to the
core processing facility in Rikaze by Continental staff where it
was logged, geologically and geotechnically, and marked for
sampling.
Half-core samples were cut with a diamond saw. The core for the
entire length of the drill hole was sampled, generally in two meter
lengths.
After the drill core was sawn, half was returned to the core box
and stored indoors in a secure core storage building. The sampled
half-core was transferred to an adjacent preparation facility
supervised by Acme Analytical Laboratories.
Geological and geotechnical logs were entered into a database
together with the sample intervals and numbers.
11.0 SAMPLE PREPARATION, ANALYSIS AND SECURITY
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Excerpted from Rebagliati and Lane, 2006
The sampling and analytical procedures for the 2005 Xietongmen
drill program are summarized in Figure 11.1, below:
[Figure omitted]
All sample preparation was carried out under supervision of Acme
Analytical Laboratories personnel.
The sampled half-core was oven-dried and then crushed to 75%
passing -10 mesh. The crushed sample was split and a 250-gram
portion was bagged for shipment. Samples were shipped in wooden
crates, first by truck from the project site to Lhasa, and then by
air freight to Acme Analytical Laboratories in Vancouver, Canada.
The crushed rejects were stored for duplicate analysis as required.
Gold analysis was by 30 g Fire Assay fusion with an Inductively
Coupled Plasma-Atomic Emission Spectroscopy (ICP-AES) finish.
Copper assays, together with those for 39 other elements, were done
by four acid digestion with an ICP-AES finish on all samples.
Continental included standards, blanks and duplicates with the
drillcore samples, in addition to Acme's internal quality control
samples.
12.0 DATA VERIFICATION
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The drillhole data set, upon which the Continental resource
estimate is based, is comprised of copper and gold analyses for 62
holes. Wardrop conducted a review of six of those holes to evaluate
the quality of data entry. Drillhole assay data as well as scanned
copies of laboratory assay sheets from Acme Analytical Laboratories
were received from Continental in pdf format. Copper and gold assay
data on the drill logs were compared with the corresponding sample
numbers and assay values on the laboratory assay sheets. No data
entry mistakes were found.
As a further check, the interval data on the drill logs were
compared with the corresponding interval data contained in the data
file "straight_composites.xls", that was received from Continental
and contains copper and gold assays together with the corresponding
drillhole and interval data. No errors were found in this review.
Continental used three commercial gold-copper standards to monitor
analytical accuracy. One standard was inserted into the sample
stream for every 19 samples (5%), and samples were re-analyzed if
the assay for the associated standard exceeded three standard
deviations from the expected mean. A total of 850 samples were
re-run because of standard failures. All re-assays of standards
were acceptable.
A total of 526 duplicate samples, comprised of a second 250 gram
split from the coarse-crushed material, were chosen by random
selection. The duplicate samples were analyzed in duplicate to
provide three duplicate assays for each primary sample. Duplicate
pulps were also assayed by ALS Chemex in North Vancouver, Canada,
for gold, copper and a multi-element suite using the same
analytical methods employed by Acme. No aberrant analyses of
duplicate samples were reported by Continental.
Continental submitted 66 blank samples, prepared from barren
granodiorite, to assess cross-sample contamination. Three blanks
had assay values on the order of 0.05 grams / tonne gold and were
attributed to contamination from adjacent samples during the
crushing stage. These results led to more stringent cleaning of
crushing equipment between samples.
13.0 ADJACENT PROPERTIES
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There are no known geologically similar deposits in the general
area of southwestern China that can be compared to Xietongmen in
order to provide an enhanced understanding of the nature or
potential size of that deposit.
14.0 METALLURGICAL TESTING
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Metallurgical testwork has been conducted on quartered drill core
that had previously been halved for assay. Sample types were
selected to represent the principal styles of mineralization across
a significant area portion of the deposit, and included oxide,
supergene, and three levels of hypogene material. Approximately 40
kilograms of each sample type were sent to Process Research
Associates Ltd. (PRA) in Vancouver for the metallurgical testwork
program. The hypogene samples were blended into a single sample for
testing.
Four flotation tests (two at natural pH, two at pH 9.5) were
performed to determine the responses of the supergene sample and
the hypogene composite. Samples were ground to 80% ~120 microns. At
pH 9.5, the tests achieved 95% recovery of the copper from the
supergene sample and 96% from the copper from the hypogene sample.
15.0 MINERAL RESOURCE ESTIMATE
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15.1 DATA
Three spreadsheet data files were received from Continental:
Xietongmen_Drill_Data_20060106.xls
straight_composites.xls
4mrl_composites.xls
The first file contained collar location data, the second raw assay
data, and the third contained four-meter composited assay data for
copper and gold, together with the identification of source drill
holes, spatial locations (xyz), and hostrock code.
Together with these data files, a drillhole location plan was
supplied in pdf format (modified as Figure 8.1 in this report), as
well a Word document (xiet.doc) that provided an explanation of the
estimation procedures, assumptions and parameters employed by
Continental.
15.2 COMPOSITE LENGTH
Continental used four-meter composites for the resource estimate.
Most samples were collected in two-meter lengths and the block
model was comprised of 10-meter cubes (see below, Section 15.7), so
a composite length of four meters is considered by Wardrop to be
appropriate.
15.3 CAPPING
The assay data in the composite file had been capped by Continental
at 5 grams / tonne for gold and 2.0 percent for copper. These
capping values were based upon analysis of cumulative log
probability plots of gold and copper assays. Wardrop was supplied
with log probability plots of gold and copper for six geological
domains: hypogene, oxide, supergene, dike, waste, and overburden.
Assays from the hypogene zone represent the largest sample
population, and the capping values agree well with breaks in slope
for the cumulative probability plots for gold and copper for those
populations. The capping values are therefore considered by Wardrop
to be reasonable.
15.4 BULK DENSITY
Continental conducted 1,402 specific gravity measurements of
drillcore samples from four geological environments: hypogene,
oxide, supergene, and waste. Wardrop was provided with a table,
reproduced below as Table 15.1, giving the number of samples,
minimum, maximum, median and average values for samples from each
of these environments, together with a description of the
measurement procedure. The median values were used by Continental
in their resource estimate and by Wardrop in their audit.
Table 15-1: Xietongmen Bulk Densities
LITHOLOGY NUMBER MINIMUM MAXIMUM MEAN MEDIAN
--------- ------ ------- ------- ---- ------
OXIDE 43 2.12 3.31 2.54 2.52
SUPERGENE 172 2.19 3.13 2.74 2.76
HYPOGENE 1136 2.09 4.38 2.83 2.81
WASTE 51 2.65 3.39 2.74 2.71
15.5 GEOLOGICAL INTERPRETATION
On the basis of degree of oxidation, Continental modeled the
Xietongmen deposit as three zones: oxide, supergene and hypogene,
and formed triangulated solids of these zones. Wardrop received
these solids in dxf format and imported them into Gemcom. In
addition, Continental provided dxf files of surface topography and
the unmineralized footwall.
On the basis of the data contained in the
Xietongmen_Drill_Data_20060106.xls and 4mrl_composites.xls files,
Wardrop prepared header, survey, geology and assay files and
imported the data into Gemcom (version 5.5). Lithology, as
represented by the drillhole plots, was compared to the boundaries
of the zones as represented by the geological solids. The
geological solids were found to closely honour the drill data.
15.6 SPATIAL ANALYSIS
Continental calculated variograms for copper and gold based upon
data from the hypogene zone as there was insufficient data from the
other zones to support such an estimate. The resultant ranges and
ellipse orientations are reproduced below. Wardrop used the same
ellipse dimensions, and the same axis orientations, translated into
ZXZ coordinates by Continental, for block model grade interpolation
within Gemcom.
Table 15-2: Variography Parameters
Axis (meters)
Nugget C1 Major Intermediate Minor Bearing Plunge Dip
Au 0.31 0.69 300 125 90 130 0 -80
Cu 0.20 0.80 555 390 95 130 -26 -60
Au Gemcom Rotation Equivalencies -40 -80 0
Cu Gemcom Rotation Equivalencies -40 -60 30
15.7 RESOURCE BLOCK MODEL
In reproducing the block model in Gemcom, Wardrop used the block
model parameters developed by Continental: origin at 638410 East,
3248810 North, 4350 Elevation. Axes were oriented north and east;
blocks were 10 meters on a side (cubic). The model contained (89
columns 890 meters east-west), 69 rows (690 meters north-south),
and 84 levels (840 meters vertical) to 3510 meters above sea level.
15.8 INTERPOLATION PLAN
Continental estimated the Xietongmen resource by ordinary kriging;
Wardrop did likewise. Because the estimate does not encompass the
entire block model, comparative estimates such as inverse distance
or nearest-neighbour were not made, as the results of different
interpolation methodologies are directly comparable only on a
global, i.e. full block model, basis. Both the Continental and
Wardrop models required a minimum of two holes and a minimum of
three samples from a given hole, in order for a grade to be
interpolated into a block.
15.9 COPPER EQUIVALENCY FORMULA
Copper equivalency grades were estimated by converting gold grades,
expressed in grams / tonne, to copper equivalent grades, expressed
in percent, and adding this value to the corresponding copper
value. Metal prices used by Continental and repeated by Wardrop,
were US$1.00/pound for copper and US$400/troy ounce for gold. Key
assumptions are:
1 troy ounce = 31.10348 grams
1 troy ounce of gold = US$400.00
1 gram of gold = $400/31.10348 = US$12.86
1 metric tonne = 2,204.6 pounds avoirdupois
1% of 1 metric tonne = 22.046 pounds avoirdupois
1 pound of copper = US$1.00
% copper equivalency of gold = ((grams gold *12.86)/22.046)*1
15.10 MINERAL RESOURCE CLASSIFICATION
To date, no economic evaluation of the Xietongmen deposit has been
carried out, therefore no mineral reserves have been calculated as
mineral reserves can only be estimated on the basis of an economic
evaluation. Mineral resources that are not mineral reserves do not
have economic viability.
In their estimate, Continental classified the Xietongmen resource
into Measured and Inferred categories. The Measured category
included all blocks for which the average distance from the input
samples was 75 meters or less. Inferred resources comprise those
blocks between 75 and 100 meters from the input samples.
Given the continuity of grade as demonstrated by the variographic
ranges of both copper and gold, the 75-meter limit for the Measured
classification represents about 25% of the range for gold, and less
than 15% of that for copper. The 100-meter limit for the Inferred
category represents 30% of the range for gold and less than 20% of
the range for copper. These constraints are considered to be both
conservative and acceptable.
15.11 MINERAL RESOURCE TABULATION
- --------------------------------------------------------------------------------
Cautionary Note to U.S. Investors concerning
estimates of Measured and Indicated Resources
This section use the terms `measured resources' and `indicated
resources'. The Company advises investors that while those terms
are recognized and required by Canadian regulations, the U.S.
Securities and Exchange Commission does not recognize them. U.S.
Investors are cautioned not to assume that any part or all of
mineral deposits in these categories will ever be converted into
reserves.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Cautionary Note to U.S. Investors concerning
estimates of Inferred Resources
- --------------------------------------------------------------------------------
The following section uses the term `inferred resources'. The
Company advises investors that while this term is recognized and
required by Canadian regulations, the U.S. Securities and Exchange
Commission does not recognize them. `Inferred resources' have a
great amount of uncertainty as to their existence, and great
uncertainty as to their economic and legal feasibility. It cannot
be assumed that all or any part of a mineral resource will ever be
upgraded to a higher category. Under Canadian rules, estimates of
Inferred Mineral Resources may not form the basis of economic
studies, except in rare cases. U.S. Investors are cautioned not to
assume that any part or all of an inferred resource exists, or is
economically or legally mineable
- --------------------------------------------------------------------------------
Table 15.4 provides a comparison of the Continental and Wardrop
estimate summaries for Measured and Inferred resources.
TABLE 15-3: CONTINENTAL & WARDROP RESOURCE SUMMARIES BY CUTOFF
CONTINENTAL MEASURED RESOURCE SUMMARY
CUTOFF TONNES CUEQ COPPER GOLD COPPER GOLD
CUEQ T % % g/t POUNDS TROY OZ
------ ----- ---- ------ ---- ------ -------
>0.70 79,700,000 1.01 0.54 0.81 948,000,000 2,070,000
>0.50* 106,300,000 0.91 0.49 0.73 1,148,000,000 2,490,000
>0.30 130,700,000 0.81 0.44 0.65 1,268,000,000 2,730,000
CONTINENTAL INFERRED RESOURCE SUMMARY
CUTOFF TONNES CUEQ COPPER GOLD COPPER GOLD
CUEQ T % % g/t POUNDS TROY OZ
------ ----- ---- ------ ---- ------ -------
>0.70 16,200,000 0.91 0.54 0.71 179,000,000 370,000
>0.50 28,800,000 0.78 0.43 0.59 273,000,000 550,000
>0.30 41,200,000 0.66 0.37 0.50 336,000,000 660,000
WARDROP MEASURED RESOURCE SUMMARY
CUTOFF TONNES CUEQ COPPER GOLD COPPER GOLD
CUEQ T % % g/t POUNDS TROY OZ
------ ----- ---- ------ ---- ------ -------
>0.70 78,100,000 0.98 0.50 0.83 860,000,000 2,081,000
>0.50 118,600,000 0.85 0.43 0.73 1,122,000,000 2,770,000
>0.30 160,400,000 0.73 0.37 0.63 1,301,000,000 3,230,000
WARDROP INFERRED RESOURCE SUMMARY
CUTOFF TONNES CUEQ COPPER GOLD COPPER GOLD
CUEQ T % % g/t POUNDS TROY OZ
------ ----- ---- ------ ---- ------ -------
>0.70 6,300,000 0.91 0.44 0.80 61,800,000 161,000
>0.50 14,000,000 0.73 0.34 0.67 105,000,000 302,000
>0.30 25,500,000 0.58 0.26 0.55 146,000,000 449,000
At cutoff levels of 0.3% and 0.5% copper equivalent, the Wardrop
Measured resource estimate has resulted in lower grades and larger
tonnages in comparison to the Continental estimate. Agreement
between the Wardrop and Continental estimates at the cutoff level
of 0.7% copper equivalent is close. Contained metal is similar at
all cutoff levels, although Wardrop estimated higher levels of
contained copper and gold than did Continental.
The Inferred category as calculated by Wardrop contains fewer
tonnes at lower grade than those calculated by Continental.
The Wardrop estimate appears to have allocated more blocks to the
Measured category and fewer to the Inferred category than did the
Continental estimate, but this difference is attributed to
differences in software algorithms (Continental used Vulcan
software, Wardrop used Gemcom) and the Wardrop estimate is regarded
as a confirmation of the Continental estimate of contained metal.
16.0 CONCLUSIONS
- --------------------------------------------------------------------------------
The sampling methodologies and quality-assurance / quality-control
measures employed by Continental in the collection of core samples
during the Xietongmen 2005 drill program are considered to be
consistent with industry standards.
The estimation parameters and assumptions used by Continental in
their resource estimate are considered reasonable and acceptable.
At a copper-equivalent cutoff grade of 0.5%, Continental has
estimated that the Xietongmen deposit contains a Measured Resource
of about 106.3 million tonnes of with an average grade of 0.49%
copper and 0.73 grams / tonne gold, to give a copper equivalent
grade of 0.91%, and an Inferred Resource of 28.8 million tonnes
with an average grade of 0.43% copper and 0.59 grams / tonne gold
to give a copper equivalent grade of 0.78%.
At the same cutoff, Wardrop estimated a Measured Resource of 118.6
million tonnes with an average grade of 0.43% copper and 0.73 grams
/ tonne gold to give a copper equivalent grade of 0.85%. The
estimated Inferred Resource at a cutoff of 0.5% copper equivalent
is 14.0 million tonnes with an average grade of 0.34% copper and
0.67 grams / tonne gold to give a copper equivalent grade of 0.78%.
The two estimates differ by about seven percent (7%) with respect
to contained metal.
At the present level of knowledge, the Continental resource
estimate for the Xietongmen deposit is considered by Wardrop to be
reliable.
17.0 RECOMMENDATIONS
- --------------------------------------------------------------------------------
Continental is proceeding with additional drill evaluation of the
Xietongmen deposit; no departures from their present procedures are
recommended.
18.0 REFERENCES
- --------------------------------------------------------------------------------
Nichols, A. and Hall, R., 2005
Conceptual Study, Xietongmen Project, Tibet, People's Republic of
China Wardrop Engineering For Continental Minerals Corporation and
Great China Mining Inc.
Rebagliati, C.M., April 23, 2004
Summary report on the Xietongmen Deposit
For Continental Minerals Corporation
Rebagliati, C.M. and Lang, James R., February 9, 2006
Excerpt From:
Summary Report on the 2005 Exploration Program at the Xietongmen
Property
For Continental Minerals Corporation
19.0 CERTIFICATES OF AUTHORS
- --------------------------------------------------------------------------------
19.1 CERTIFICATE OF ANDREW NICHOLS
I, Michael Andrew Nichols do hereby certify that as an author of
this TECHNICAL REPORT ON THE RESOURCE AUDIT OF THE XIETONGMEN
PROJECT, TIBET, PEOPLE'S REPUBLIC OF CHINA, dated March 24, 2006, I
hereby make the following statements:
o I am Chief Mining Engineer with Wardrop Engineering Inc.
with a business address at 900 - 1130 West Pender Street,
Vancouver, British Columbia.
o I am a graduate of Camborne School of Mines, England (ACSM,
1973).
o I am a member in good standing of the Association of
Professional Engineers and Geoscientists of British
Columbia. (Registration #125865).
o I have practiced my profession as a Mining Engineer for 30
years.
o I have read the definition of "qualified person" set out in
National Instrument 43-101 ("NI 43-101") and certify that,
by reason of my education, affiliation with a professional
association (as defined in NI 43-101) and past relevant work
experience, I fulfill the requirements to be a "qualified
person" for the purposes of NI 43-101.
o I am responsible for part of the preparation of Sections 3,
4, 5, 9, 10, and 11 of this technical report titled
"Technical Report on the Resource Audit of the Xietongmen
Project, Tibet, People's Republic of China, dated March 24,
2006.
o I have visited the Xietongmen Project Property between 26th
and 28th October 2005.
o As of the date of this Certificate, to my knowledge,
information and belief, this Technical Report contains all
scientific and technical information that is required to be
disclosed to make the technical report not misleading.
o I am independent of the Issuer applying the tests set out in
Section 1.4 of National Instrument 43-101.
o I have read National Instrument 43-101 and the Technical
Report has been prepared in compliance with National
Instrument 43-101 and Form 43-101F1.
o I consent to the filing of this Technical Report with any
stock exchange or other regulatory authority and any
publication by them, including electronic publication in the
public company files on their web sites accessible by the
public, of the Technical Report.
Signed and dated this 1st day of March, 2006 at Vancouver,
British Columbia.
/s/ "Andy Nichols"
--------------------------------
Andy Nichols, P.Eng.
Chief Mining Engineer
Wardrop Engineering Inc.
19.2 CERTIFICATE OF GREG MOSHER
I Gregory Zale Mosher of Vancouver, British Columbia, certify that
as an author of this TECHNICAL REPORT ON THE RESOURCE AUDIT OF THE
XIETONGMEN PROPERTY, TIBET, PEPOLE'S REPUBLIC OF CHINA, dated March
24, 2006, I hereby make the following statements:
o I am a consulting geologist with Wardrop Engineering Inc.
with a business address at 905 - 1130 West Pender Street,
Vancouver, British Columbia.
o I am a graduate of Dalhousie University, (B.Sc. Hons., 1970)
and McGill University (M.Sc. Applied, 1973).
o I am a member in good standing of the Association of
Professional Engineers and Geoscientists of British Columbia
(License # 19267).
o I have practiced my profession in mineral exploration
continuously since graduation.
o I have read the definition of "qualified person" set out in
National Instrument 43-101 (NI 43-101) and certify that, by
reason of my education, affiliation with a professional
association (as defined in NI 43-101) and past relevant work
experience, I fulfill the requirements to be a "qualified
person" for the purpose of NI 43-101.
o I am responsible for the preparation of Sections 1,2, 6, 7,
8, and 12 - 18 of this technical report titled " Technical
Report on the Resource Audit of the Xietongmen Project,
Tibet, People's Republic of China", dated March 24, 2006.
o I have no prior involvement with the property that is the
subject of the Technical Report.
o As of the date of this Certificate, to my knowledge,
information and belief, this Technical Report contains all
scientific and technical information that is required to be
disclosed to make the technical report not misleading.
o I am independent of the Issuer applying the tests set out in
Section 1.4 of National Instrument 43-101.
o I have read National Instrument 43-101 and the Technical
Report has been prepared in compliance with National
Instrument 43-101 and Form 43-101F1.
o I consent to the filing of this Technical Report with any
stock exchange or other regulatory authority and any
publication by them, including electronic publication in the
publicly accessible company files on their websites.
Signed and dated this 24th day of March, 2006 at Vancouver,
British Columbia.
/s/ "Greg Mosher"
----------------------
G.Z. Mosher P.Geo.
Senior Geologist,
Wardrop Engineering Inc.