Lebed Alert - MJS: rapidly growing producing China gold play!?
Majestic Gold Corp, currently $0.19, trades on the TSX Venture under the symbol MJS and on the pink sheets under the symbol MJGCF. MJS has 499.83 million shares outstanding and a market cap at $0.19 of only $94.97 million.
MJS is a producing gold company with a gold deposit in Shandong province of China. MJS recently increased its ownership of the Song Jiagou property in China from 54 to 94 % and commenced production at an initial rate of 1,400 tpd.
MJS's revenues during the most recent twelve months were $7.59 million. MJS currently has a mill expansion project underway that will increase their production by 5,000 tons per day within the next six months. MJS expects to increase mill production from 1,400 tons per day to 7,400 tons per day.
MJS recently increased its indicated tonnes by 35.34% and inferred tonnes by 37.96%, increasing its total resource base from 53 million tonnes to 72.5 million tonnes!
MJS's Song Jiagou property contains 1.2 million indicated ounces of gold and 1.8 million inferred ounces of gold for a total resource of 3 million ounces of gold. At its current market cap, MJS is being valued at only $31.66 per ounce of gold in its resource base, which is ridiculously low for a producing and rapidly growing gold company in China, especially with gold rapidly approaching $1,500 per ounce!
MJS recently reported a positive Preliminary Assessment for the Song Jiagou mine indicating a Net Present Value of US $525 million, a Internal Rate of Return of 78.6%, a Payback in 1.4 years, and total gold production of 2.324 million ounces (average 105,645 oz/yr) for the life of the mine of 22 years.
MJS is rapidly moving towards increasing its production to 100,000 ounces of gold per year and the new mill that is currently being constructed will play a major role in helping MJS achieve this goal!
MJS's Song Jiaguo Property is located on the Jiaodong Peninsula in Muping County, the Shandong Province, the People's Republic of China. The property lies on the western edge of the Muping-Fushan Gold Belt, which hosts 20% of the known gold deposits on the Jiaodong Peninsula.
Gold production from the entire peninsula accounts for over 25% of China's annual gold production, presently estimated to be 288 tons or 9.3 M ounces. Gold deposits in the belt are commonly controlled spatially by fault zones.
Gold mineralization on Song Jiaguo is hosted by a series of steeply dipping, sub-parallel north-northeast trending fault zones within upper Cretaceous conglomerates overlying Proterozoic granitic rocks. The area of Song Jiaguo is interpreted as being the higher levels of a mesothermal system where gold bearing fluids have mineralized the matrix of the host conglomerates. The gold bearing quartz veins would then likely continue to much lower levels in the system.
To the south of the property, the Pengjiakuang Gold Deposit (>650,000 oz) occurs in the same structural environment within Cretaceous Laiyiang conglomerates which underlie the Song Jiaguo Property.
MJS has a strong balance sheet with $5.09 million in cash and no debt!
Be sure to start your research on MJS immediately! MJS appears to be undiscovered at this time, but I believe it could become one of our biggest TSX winners of 2011!
