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Majestic Gold Corp.


Songjiagou Project


  • Majestic’s Songjiagou Mine is located in Muping County on the Jiaodong Peninsula, Shandong Province
    • Shandong is the historic heartland of China’s gold mining industry
    • Shandong produces  25% of China’s annual gold production
  • Majestic Gold holds 75% (70.5% net) interest in Chinese JV Co

Geology of Project Area

  • Songjiagou is a mesothermal deposit hosted in a conglomerate in the Laiyang Group Linsishian formation
  • Mineralization occurs in veins, disseminations, and in stockworks and is visually indistinguishable from wall rocks

Click to enlarge

Project Resource and Economics

  • SRK Consulting (China) Ltd.  updated resource calculation in January  2013
  • Based on a database of 20,836 samples from:
    • 46 surface trenches
    • 77 surface drill holes
    • 104 underground samples (channel samples and drill holes)
NI 43-101 Compliant Resource Estimate within Optimized Open Pit (January, 2013)
Category Tonnes Grade Au (g/t) Ounces Au
Open Pit (cut-off 0.30 g/t Au)      
Indicated 26,600,000 1.40 1,197,427
Inferred 23,400,000 1.45 1,090,996
Underground (cut-off 0.80 g/t Au)      
Inferred 5,600,000 2.56 460,964
The resource estimate is categorized as Indicated and Inferred as defined by the CIM guidelines for resource reporting. Mineral resources do not demonstrate economic viability, and there is no certainty that these mineral resources will be converted into mineable reserves once economic considerations are applied. The Indicated and Inferred mineral resource estimate has been prepared in compliance with the standards of NI 43 -- 101 by Anshun Xu, Ph.D., F AussIMM

Updated Preliminary Economic Assessment

  • Completed by SRK Consulting (China) Ltd. (“SRK”) in August 2013, amended in January 2016
  • Multiple based on current market capitalization of approximately US$71.4M
  • Base Case NPV’s based on SRK’s 2013 in-Pit Indicated Resource only, within the original Mining License, containing 747,519 ozs Au @ 1.36 g/t Au
    • After-tax project NPV of US$335M at a 10% discount, based on gold price of US$1,355/oz
    • Sensitivity analysis for 20% reduction in the base-case average gold price, to US$1,084 per ounce, results in an after-tax NPV of US$232M
  • Based on current grades and estimated recoveries
  • Costs to date at Songjiagou estimated at $60M
    • Exploration, Engineering, Permitting:  $1.08M
    • Mining and Process Facilities:  $32.44 M
    • Ancillary Facilities:  $4.0M
    • Land Lease and Relocation: $22.48M
*The Company's production decision was not based on a feasibility study of mineral reserves demonstrating economic and technical viability. The Company's production decision was based on the open pit optimization resource model set out in the Preliminary Economic Assessment ("PEA"), which takes into account the relatively low mining costs negotiated by the Company. The PEA is preliminary in nature, and includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the preliminary economic assessment will be realized. Mineral resources that are not mineral reserves do not have demonstrated economic viability.

Milestones 2010 - Present

  • Revised ownership from 60% to 75% (70.5% net) in 2010
  • Raised $75M - most recently $35.5M completed in June 2012
  • Original Resource - NI 43-101 by Wardrop in October 2010 - revised by SRK in August 2013 
  • Original PEA  by Wardrop in March, 2011 - revised by SRK in August, 2013, amended in January 2016
  • New 6,000 tpd mill commissioned in May 2011, increasing overall capacity to 7,400 tpd; current operation utilizing 6,000 tpd mill only
  • Yearly gold production:
    • 2011:   12,056 oz
    • 2012:   18,925 oz
    • 2013:   19,611 oz
    • 2014:   19,630 oz
    • 2015:   19,488 oz
  • Operational Review completed in Q2/Q3 2014  with recommendations to improve production
  • Renegotiated Mining/Milling Contract with Mining Contractor
  • Received preliminary gov’t approval for 42% expansion in area available for open pit mining operations, from 0.342 kmē to 0.594 kmē
  • Signed LOI with Brigade #3 to earn 80% of 14.72 sq km concession contiguous with Songjiagou
  • Mine-site technical team bolstered by addition of former staff from SRK in Q4 2014
The technical information of this presentation has been prepared by, or prepared under the direct supervision of Stephen Kenwood, P.Geo, President and CEO, who is a Qualified Person as defined in NI 43-101.