South China Resources

another peer project, for comparison perhaps:

Zuun Mod Molybdenum-Copper Project

Drilling resumed this week in the Racetrack Zone of the three kilometre long Southeast Corridor. An independent Consultant recently concluded that the Zuun Mod molybdenum-copper exploration project merits a resource definition drilling program to establish the resource potential of previously delineated molybdenum mineralized areas within the Stockwork and Racetrack Zones. Previous drilling in the Racetrack Zone included hole ZMD-11, which intersected 340 metres of 0.08% MoS2 (0.05% molybdenum) within which 52 metres averaged 0.13% MoS2 (0.08% molybdenum), and KKMD-08, located 255 metres to the north which returned 160 metres of 0.10% MoS2 (0.06% molybdenum) and ended in mineralization at 279 metres.

Drilling will then move to the Stockwork (1.5 kilometres southwest of ZMD-11) and Intersection Zones (one kilometre northeast of ZMD-11). The most significant hole in the Stockwork Zone, drill hole KKMD-03, intersected 236 metres of 0.10% MoS2 (0.06% molybdenum) beginning at 90 metres depth and ending in mineralization at 326 metres. Included within this 236 metre intersection were 28 metres averaging 0.20% MoS2 (0.12% molybdenum). This zone remains open from KKMD-03 to the south and is bounded to the north by lower grade mineralization.

The Stockwork (formerly the Southeast Zone) and Racetrack Zones each cover target areas of approximately 600 metres by 400-600 metres. Drilling is expected to continue through to mid-December. It is anticipated that a minimum of 2000 metres can be completed by the end of 2005 with results to be reported early in 2006. The definition drilling program will resume in 2006. The objective of the current drill program is to establish lateral continuity from molybdenum mineralized zones intersected in previous drilling and to test for shallower mineralization to enhance potential open-pit economics. The Stockwork and Racetrack Zones have the potential to contain resources of sufficient tonnage and grade to be of economic significance.

The Intersection Zone is a large, virtually untested area (2.0 kilometres by 1.0 kilometre) of anomalous molybdenum and copper identified from surface rock and soil samples, believed by management to offer significant potential for outlining near-surface mineralization. Only one previous hole (KKMD-7) tested the northeastern portion of the zone and returned drill results that included highly anomalous molybdenum and copper up to 0.61% copper and 0.45% MoS2 (0.27% molybdenum) over two-metre intervals as well as near surface molybdenum mineralization with 0.08% MoS2 (0.065% molybdenum) over the top 10 metres of the hole.

The Zuun Mod project has been under exploration and evaluation since 2002 with a 20 square kilometre porphyry-related alteration and mineralized system outlined. The property lies within the South Gobi porphyry belt as defined by the Oyu Tolgoi copper-gold deposit and other smaller porphyry copper deposits. Prior to the current drill program, a total of 7520 metres of diamond drilling has been completed on the property with total exploration expenditures (WMC-Gallant and Erdene) of approximately US$2.91 million. The project is less then 200 kilometres north of the Chinese border where rail and power is being developed to provide raw material to the Jiquan Iron and Steel complex in northern China.