Overview

Golden Queen Mining Co. Ltd.

Golden Queen Mining Co. Ltd. is listed on the Toronto Stock Exchange (TSX-GQM).

The Soledad Mountain Project

The company is proposing to develop a gold-silver, open pit, heap leach operation on its Soledad Mountain property, located just outside the town of Mojave in Kern County in southern California. Every element of the Soledad Mountain Project (the “Project”) has been rethought and reengineered since 2003 in an effort to find sound technical and cost-effective solutions that would see the Project proceed with a robust internal rate of return or IRR. This phase of the technical work was completed toward the end of 2006. 

Independent Technical Report & Mineral Resource Estimates

The company engaged SRK Consulting (U.S.), Inc. in 2005 to prepare a National Instrument 43-101 compliant Technical Report to validate and confirm mineral resource estimates. The Technical Report was released on March 6, 2006. The mineral resources confirmed in the Technical Report are estimated to contain 2,162,000 oz of gold and 37,628,000 oz of silver in the Measured and Indicated categories and a further 511,000 oz gold and 11,154,000 oz silver in the Inferred category, both calculated with a gold-equivalent cut-off grade of 0.274g/t (0.008oz/ton). 

Independent Feasibility Study & Mineral Reserve Estimates

The company engaged Norwest Corporation of Vancouver in January 2007 to prepare a National Instrument 43-101 compliant Technical Report to assess mineral reserves for the Project as part of an independent feasibility study. The results of the study were made public in a press release dated December 14, 2007. The Technical Report was filed with the applicable Canadian securities commissions in January 2008.

The open pit design done by Norwest Corporation is considered to be both detailed and complete. The mineral reserve estimates are set out in the table below: 

Proven and Probable Mineral Reserve Estimates

Allowance has been made for ore loss and dilution in determining the detailed mining schedule. Dilution has been assigned a zero grade for calculation of reserves. The planned ore mining rate is 4,500,000 tonnes per year (5,000,000 tons per year) once in full production with an average stripping ratio of 2.12:1 and this includes the waste rock mined during the pre-production period. 

Only approximately 50% of the mineral resource estimates have been included in the current 12-year mine plan.

Capital Requirements

The company will need significant additional financing to develop a mine on the property once a production decision is made and estimates that this could range as high as US$60million in addition to the working capital required. 

Permitting Update

All key submissions required for an amended set of approvals and permits for the Project have been submitted to the responsible regulatory authorities.

• Land Use - Conditional Use Permits

The environmental setting of the Project was documented in a number of baseline studies completed from 1990 onwards and in the certified Environmental Impact Report (the “EIR”) and Environmental Impact Statement completed in 1997. The Kern County Board of Supervisors unanimously approved two Conditional Use Permits (“CUP”) for the Project in September 1997 (i.e. CUP Case No. 41, Map No. 213 and CUP Case No. 22, Map No. 214). The Bureau of Land Management subsequently issued its Record of Decision approving the Plan of Operations under NEPA in November 1997. The company completed a number of studies and did significant work on site from 2005 to 2007 to document that the environmental setting for the Project has not changed since 1997. 

The State of California introduced backfilling requirements for certain types of open pit, metal mines in December 2002. The company contended that these regulations did not apply to the Project under a grandfathering provision included in the regulation. The company therefore pursued both a favorable interpretation under the regulation and subsequently an amendment of the regulation with the State Mining and Geology Board (the Board) in 2006. These efforts were supported by Kern County officials. Both approaches were rejected by the Board and the decision was duly recorded by the Board in January 2007. 

Norwest Corporation prepared a life-of-mine waste rock management plan and this plan incorporates sequential & partial backfilling of mined-out phases of the open pit with no double-handling of waste rock at the end of the mine life. This plan was included in an Application for a revised Surface Mining Reclamation Plan, which was submitted to the Kern County Planning Department (the “Planning Department”) on April 9, 2007.

The Planning Department completed its review of the Application and deemed the Application complete as set out in a letter dated July 24, 2007. The Planning Department noted that changes proposed for the Project constitute new information that requires evaluation of potential impacts and mitigation in a supplemental EIR. The Planning Department issued a Request for Proposal to prepare the supplemental EIR to a total of 17 qualified consultants and these proposals were submitted to the Planning Department by the close of business on November 12, 2007.

The company signed an agreement with the Kern County Planning Department in February and made an advance of $55,000 which is 50 % of the cost of the work to be done by the consultant selected by the Planning Department. This agreement was approved by the Kern County Board of Supervisors at a regularly scheduled meeting held on March 11. The kickoff meeting with the consultant was held on the afternoon of March 12. 

Note that the Bureau of Land Management has confirmed that its Record of Decision approving the Plan of Operations under NEPA in November 1997 remains valid and that no additional reviews or approvals are required before the company can proceed with the Project.

• Water Quality – Report of Waste Discharge and Waste Discharge Requirements

The company and its consulting engineers prepared and submitted a revised Report of Waste Discharge to the Lahontan Regional Water Quality Control Board on March 8, 2007. The revised Report of Waste Discharge was prepared at the request of the Regional Board to document improvements in the layout and design of the heap leach facility plus other changes proposed for the Project.

The Regional Board has completed its assessment of the revised Report of Waste Discharge and has prepared draft Waste Discharge Requirements for the Project. The Regional Board will wait for confirmation from the Kern County Planning Department that a certified supplemental EIR is available before adopting a revised Board Order that will set the Waste Discharge Requirements for the Project. 

• Air Quality – Authority to Construct and Permit to Operate

The company had obtained seven Authority To Construct permits dated March 16, 2002. These permits expired on March 16, 2004 and were not renewed due to changes anticipated in the Project. 

WZI Inc. of Bakersfield was asked to assess air quality for the Project in February 2006. WZI Inc. did emissions modeling for the Project and this was submitted to the Kern County Air Pollution Control District in September 2006. The company submitted Applications for Authority to Construct permits on June 8, 2007 and these remain outstanding.

The Authority To Construct permits are converted to a Permit To Operate after construction has been completed and subject to inspection by the Kern County Air Pollution Control District. 

• Reclamation Financial Assurance

The company provided reclamation financial assurance in the form of an Irrevocable Standby Letter Of Credit backed by a Certificate Of Deposit with Union Bank of California in the amount of US$266,692 on October 19, 2007 and this is the current estimate for reclamation of historical disturbances on the property. The financial assurance is reassessed annually. 

Other

It is expected that an aggregate business can be developed on the property once the heap leach operation is in full production as more fully described under the heading – AGGREGATE.

A technical update with information on recoveries for gold and silver obtained in the column leach tests is available under the heading - TECHNICAL.

The company announced in a press release dated January 23, 2008 that outstanding warrants were exercised to acquire 7,200,000 common shares of the company at an exercise price of Cdn$0.60 per share for total proceeds of approximately Cdn$4,320,000 or approximately US$4,320,000. 

Mr. H. Lutz Klingmann, P.Eng., the president of the Company, is a qualified person for the purposes of National Instrument 43-101 and has reviewed and approved the technical information of this website.

Further information on Golden Queen Mining Co. Ltd. is available on the SEDAR web site at www.sedar.com.

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last updated: April 17, 2008

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