China Goldmines

China Goldmines plc is a gold resource company focussed on the discovery and development of gold projects in the HunanProvince. China is now the world's largest gold producing nation. The Company’s Shenjiaya and Xiaotaoyuan Prospects sit in an important mineralised and base metal region in the western part of the province. It has been independently estimated that a JORC code compliant inferred gold resource of 1.83m oz is contained in the Shenjiaya Prospect.

Recognising the benefit of accessing capital markets for funding to develop the Shenjiya Prospect the Company appointed Brewin Dolphin’s Natural Resources Team to prepare the company for a flotation on AIM which was completed in February 2006.

The flotation was a preliminary step for China Goldmines. The Company subsequently raised £31m of funds in a secondary equity fundraising completed in October 2007. The funds were raised and applied to the acquisition of the 8 gold mines in the Shenjiya Prospect and the development of the mining infrastructure.

During the fundraising process Brewin Dolphin’s Natural Resources team worked closely with the management to prepare the investment proposition. Supporting the geological interest in the prospect it was important to set out a clear strategy for developing the mining infrastructure to modernise operations and extracting value from the gold resource.

The funds were raised in line with our valuation range and shares were placed with a range of blue chip institutions many of whom continue to support the company.

China Goldmines continues to make progress towards its strategic target of producing 150,000oz of gold per annum in 2011. Having substantially completed the initial mine refurbishment the Company is now looking to pursue significant gold production in the coming year.

For further information on this transaction please contact Alex Dewar on 0845 213 2076