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 2007. 

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 average ore mining rate is 4.1 million tonnes per year (4.5 million 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 planned open pit, heap leach operation and the potential for an extended operation remains good.

The Company and its consulting engineers are revising the feasibility study and cost estimates to bring the information current.

Capital Requirements

The company will need significant additional financing to develop a mine on the property once a production decision is made. Capital costs for mining projects have increased in recent years and the Company is currently re-estimating both capital and operating costs.

Permitting Update

The Company completed an Application for a revised Surface Mining and Reclamation Plan in April 2007. The Kern County Planning Department determined that changes proposed for the Project since the Conditional Use Permits were issued in 1997 constituted new information that required evaluation of potential impacts in a Supplemental Environmental Impact Report (“SEIR”). The draft SEIR was finally completed and distributed in January 2010. The Kern County Planning Commission formally considered the Project at its regularly scheduled meeting in Bakersfield on April 8. At the meeting, the Commission, consisting of a panel of three commissioners, unanimously approved the Project. Two appeals were subsequently filed against the Commission’s decision and the Project was scheduled to be reconsidered before the Kern County Board of Supervisors on May 25. Both appeals were withdrawn before the day of the meeting and the decision made by the Planning Commission therefore became final.

Private Placement

The company concluded a non-brokered private placement with Gammon Gold Inc. on May 28 and this closed on June 1. Gammon Gold Inc. acquired 5,000,000 units of the company at a price of $1.60 per unit for total proceeds of $8,000,000. Each unit consists of one common share, one quarter of one Class A Warrant, and one quarter of one Class B Warrant. Each Class A Warrant entitles Gammon Gold to purchase a common share of Golden Queen at a price of $1.75 for a period of 18 months from the closing date. Each Class B Warrant entitles Gammon Gold to purchase one common share of Golden Queen at a price of $2.00 for a period of 18 months from the closing date.

Subject to certain conditions, Gammon Gold was granted the right to participate in future financings to maintain its equity position in the Company.

Proceeds from the private placement will principally be used for expenses associated with the ongoing development of the Company’s Soledad Mining project and for general working capital. 

Other

The production and sale of aggregate and construction materials is expected to commence fairly early in the mine life and continue for up to 30 years or until the stockpile of quality waste rock has been exhausted 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.

Environmental issues are described and the status of approvals and permits is summarized under the heading – ENVIRONMENTAL.

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: July 19, 2010

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