Junior, investor adopt global strategy

China Minerals Mining Corp., formerly Hawthorne Gold Corp., is gearing up to begin its 2011 exploration program at the company's two northern British Columbia gold properties, Table Mountain and Taurus.

China Minerals is the result of a fortuitous meeting of Hawthorne principle co-founders Richard Barclay and Michael Beley with a major shareholder, Skyocean Holding Co. Ltd.

The two well-known Canadian miners visited Beijing in late 2009 to meet with executives of the private Beijing-based development company and came away a new vision of the future.

Barclay and Beley, who founded the Bema and Eldorado Gold corporations, said, "They didn't know what to expect from their hosts but knew it was a meeting they couldn't afford to miss."

The meeting culminated in the creation of a new entity - China Minerals Mining - that truly personifies the "East meets west" adage, they explained in a statement posted prominently on the company website.

In bringing these two worlds together, Chinese capital and Western knowledge, a new approach to mining has been conceived, they added Plans call for the creation of an international mining concern that is global in scale and encompasses the acquisition and development of a wide range of precious and base metal projects, China Minerals said.

But the two gold projects, previously held by Hawthorne, also will play a part in that future. Both are located in the historic Cassiar Mining Region of northwestern British Columbia.

Venture brings substantial working capital

China Minerals will continue to be based in Vancouver, B.C. with management expertise drawn from both Hawthorne and Skyocean with appointments of Vancouver resident, David Bo, to the position of executive chairman and Ling Zhu, Beijing resident, to the position of chief executive officer. Barclay will serve as director and executive vice president, while Beley will serve as director. China Minerals Mining July 14 reported that its board of directors has established a management committee to manage the day-to-day operation objectives of the company that will be determined from time to time by the board. The management committee is chaired by Bo and includes Zhu and Barclay.

Zhu, a senior executive with the Skyocean Group for the past four years, has been in charge of the oversight of the Skyocean Investment Division. Zhu brings strong leadership and entrepreneurship skills to his new position as CEO. Bo worked at China National Petroleum Corp. from mid 1980s to mid 1990s and then joined the Ivanhoe Group, with the most recent position of General Manager, Business Development at Ivanhoe Capital Corporation when he left the group several years ago. He has an extensive background in investment banking, finance, corporate development, joint ventures and project

management. Hawthorne was renamed China Minerals Mining Corp. in April when it began trading on the Toronto Venture Exchange under the symbol "CMV" and in the United States as "HWTHF."

Thanks largely to a $7.5 million private placement from Skyocean in March, the company's cash on hand as of May 31 was C$7,640,000. That compared with C$475,000 at Nov. 30. The completed financing increased China Minerals' working capital to C$8,469,000 at May 31, compared with C$2,735,000 at Nov. 30.

The company used C$175,000 of its cash on operating activities during the six-month period in 2011, compared with C$1,827,000 for the same period a year earlier. The decreased cash outlays in the 2011 operating expenses resulted from a cash refund from the 2010 BC mineral tax credit.

Ambitious plan

China Minerals said it is pursuing M&A opportunities for growth as well as future exploration and development of both Table Mountain and Taurus. The company hired Canadian Mining Geophysical Ltd. conduct a 2010 airborne geophysical program over the Cassiar Gold Camp holdings, which was successfully completed last fall. The program covered 5,022 line kilometers and cost C$899,200. The aerial survey used a geological technology known as ATEM, which uses a transmitter of more than 50,000 amperes square. The final interpretation and report was completed in June.

The Table Mountain Gold Project is a fully permitted camp with onsite milling capacity of 270 metric tons of ore per day with a gravity and flotation mill, power plant, assay laboratory and tailings impoundment facility. The Table Mountain gold mine is a high-grade, underground mining operation located in northwestern British Columbia. The historic Cassiar Gold Belt is a 23-kilometer-long (14 miles) greenstone hosted quartz carbonate formation that stretches from Mount McDame in the north to Juniper Mountain in the southeast. The historic mining operations and McDame River have produced close to 500,000 ounces of gold from various mills and placer operations.

Gold mineralization at Table Mountain is typical of some of Canada's largest gold camps, including Timmins, Kirkland Lake and Val d'Or. In June 2009 China Minerals (Hawthorne) commenced an exploration/development program, with the goal of working towards gold production.

An NI 43-101 technical report updated in May 2010 concluded that the East Bain Zone at Table hosts an indicated resource of 21,471 metric tons averaging 18.02 g/t gold (about 12,440 troy ounces of gold) at a cutoff of 16.24 g/t gold. The property also hosts an inferred resource of 65,757 metric tons averaging 24.30 g/t gold (about 55,705 troy oz gold) at a cutoff of 20.12 g/t gold. This includes the Bain Zone, which contains an inferred resource of 19,306 metric tons at an average grade of 31.76 g/t gold (about 19,714 troy oz of gold).

China Minerals also said it has entered into a resource funding agreement with the Kaska Dena Council on behalf of the BC Kaska First Nation in connection with the continued exploration and development of the Cassiar Gold Camp.

Under the agreement, China Minerals has agreed to provide resource funding to the BC Kaska Nation to contribute to the cost of negotiating traditional knowledge protocols and a socioeconomic participation agreement.

The TK Agreement will assist the parties in establishing the appropriate traditional knowledge protocols for the exploration and development of the property.

The SEPA would include environmental, cultural and socioeconomic and business opportunities and benefits for members of the BC Kaska and their businesses.

A feasibility study has not been completed on the Table Mountain property.

Taurus deposit will augment mill feed

The nearby Taurus Project boasts a 1.055-million-ounce gold NI 43-101-compliant inferred resource that will be the focus of ongoing development.

A large-tonnage, low-grade gold deposit, it is a former producer and has been explored for about 25 years.

An advanced-stage exploration target, Taurus hosts 33.1 million metric tons at an average gold grade of 0.99 grams per metric ton gold, using a cut-off grade of 0.5 g/t.

The project comprises wholly-owned mineral claims at Taurus and more mineral claims at the Taurus II property, which has been drilled during the past two years.

This drilling expanded the mineralization with grade intercepts in a range similar to the known resource of 1.0 g/t gold.

A former high-grade, small underground gold mine, the Taurus deposit was actively operated in the early 1950s and again in the early 1980s.

The high-grade areas were eventually abandoned and attention turned to a large low-grade mineralized zone, where about 370 holes have been drilled.

China Minerals said it will review the current Taurus deposit to potentially define the opportunity to develop small open pits from higher grade zones contained within the resource.

These smaller pits can be used to provide supplemental mill feed as the company moves towards production at the Cassiar Gold Mine.

The total land package held by China Minerals consists of a contiguous 58,901-hectare (227.4 square miles) package on the Cassiar Gold Belt.

Looking beyond the two B.C. properties, China Minerals added: "The door is now open to accept project submissions."