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AUKING MINING LIMITED Capital/Financing Update 2009

Aug 17, 2009

64355_rns_2009-08-17_a8347a64-51ff-4797-9b54-a51c2325acb9.pdf

Capital/Financing Update

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ASX/Media Announcement

18[th] August 2009

RESULTS FROM THE GEM DISCOVERY – DEFINITION OF A NEW STYLE OF INTRUSIVE RELATED COPPER-GOLD MINERALISATION

Key Points

  • Further encouraging results have been received from the newly discovered Gem Project following a diamond drilling program. The target is a new style of copper-gold mineralisation hosted by intrusives within the Naraku Granite.

  • Results include:

GD-006 - 5m @ 0.77% copper and 0.05 g/t gold from 96.50m Including 3m @ 1.22% copper, 0.07g/t gold from 98.5m

GD-018 - 22m @ 0.46% copper and 0.60 g/t gold from 43m Including 3m @ 1.46% copper, 0.23g/t gold from 44.5m Including 2.5m @ 1.81% copper, 4.73g/t gold from 62.5m

Mineralised zones consist of a series of sub-parallel, low angle quartz – chalcopyrite – pyrite – magnetite vein sets localised within shears. A new style of disseminated copper mineralisation was also discovered within intrusive dykes parallel to the main mineralised trend.

  • Additional ground TEM (time domain electromagnetic) geophysical surveying is planned after a successful two line orientation study in early August. Combined with drilling information, results will be used to plan further extensional drilling.

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China Yunnan Copper Australia Limited (ASX:CYU) today announced further encouraging results from its follow up exploration diamond drilling programme at the Gem Prospect on its Cloncurry North Project ( Figure 1 ).

The follow up drill programme consisted of ten RC drillholes for 1,641m and three diamond core holes for 417.55m ( Figure 2 ) was completed in July 2009 ( Table 1 ). Previous ASX announced drill results were for the RC portion of the programme with final results now returned for the three diamond holes. CYU now plans to extend the boundaries of the mineralisation undercover for the first time after drilling was confined initially to outcropping areas.

To facilitate this a fixed loop TEM survey will investigate the open mineralisation particularly to the north west and at depth.

TYPE HOLE ID EAST* NORTH* RL (m) Dip (°) AZM (Grid) DEPTH (m)
RC
RC
RC
RC
RC
DD
RC
RC
RC
RC
RC
RC
RC
RC
RC
RC
DD
DD
GR-001
GR-002
GR-003
GR-004
GR-005
GD-006
GR-007
GR-008
GR-009
GR-010
GR-011
GR-012
GR-013
GR-014
GR-015
GR-016
GD-017
GD-018
419403
419544
419425
419368
419387
419389
419464
419423
419404
419462
419447
419427
419438
419439
419366
419417
419446
419427
7758801
7758581
7758551
7758445
7758423
7758531
7758559
7758597
7758586
7758522
7758511
7758501
7758460
7758802
7758802
7758255
7758562
7758550
193
193
188
189
192
194
192
192
191
191
189
190
190
193
190
191
194
193
-60
-60
-60
-60
-60
-60
-60
-60
-60
-60
-60
-60
-60
-60
-60
-60
-60
-60
090
130
060
060
060
060
060
060
060
060
060
060
060
090
090
360
240
060
150.00
120.00
100.00
150.00
150.00
198.50
148.00
196.00
202.00
148.00
148.00
202.00
154.00
100.00
202.00
141.00
105.00
114.05

Table 1: Gem Prospect RC and diamond drill collar location. * Easting and Northing UTM MGA Zone 54 – GDA94. RC (Reverse Circulation percussion drilling), DD (diamond drill or core drilling).

CYU drilled three HQ3/NQ diamond holes along one section line focusing on the previously reported result from GR-003 of a near surface copper-gold intersection of 38m @ 1.25 % copper and 0.20 g/t gold from 33m down hole depth. All diamond holes were orientated and regularly surveyed to provide geotechnical information.

GD-006 was drilled stepping back 40m south west along section from GR-003 to test the down dip extension and geometry of the zone. GD-006 returned a mineralised zone of 5m @ 0.77% copper, 0.05 g/t gold from 96.5m down hole depth including a high grade zone of 3m @ 1.22% copper, 0.07g/t gold from 98.5m down hole depth.

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GD-017 was stepped 20m forward along section from GR-003 and drilled back toward GR-003 on a bearing of 240⁰ to test the occurrence of shallow north easterly dipping mineralised tensional veins that were identified during the drilling of GD-006. GD-017 returned a low grade mineralised zone of 6m @ 0.30% copper, 0.04 g/t gold from 61m down hole depth.

GD-018 was collared two metres east of GR-003 and was drilled as a twin to GR-003 to identify the mineralised structures and host unit. GD-018 returned a significant mineralised zone of 22m @ 0.46% copper, 0.60g/t gold from 43m down hole depth including higher grade zones of 3m @ 1.46% copper, 0.23g/t gold from 44.5m down hole depth and 2.5m @ 1.81% copper, 4.73g/t gold from 62.5m down hole depth.

HOLE TYPE HOLE ID From To Interval Cu(%) Au(g/t) Zn(%)
GR-001 42.00 43.00 1.00 0.13 <0.01
GR-001 55.00 76.00 21.00 0.12 0.05
including 55.00 57.00 2.00 0.19 0.08
RC 61.00 66.00 5.00 0.16 0.05
68.00 69.00 1.00 0.12 **0.02 **
73.00 76.00 3.00 0.20 0.10
RC GR-002 No Significant Results
GR-003 0.00 1.00 1.00 0.01 0.39
RC GR-003 33.00 71.00 38.00 1.25 0.20
including 45.00 67.00 22.00 1.96 0.29
RC **GR-004 ** 59.00 60.00 1.00 0.12 0.02
**GR-004 ** 80.00 81.00 1.00 0.47 0.27
GR-004 141.00 142.00 1.00 0.18 0.02
RC GR-005 39.00 40.00 1.00 0.11 <0.01
GD-006 42.00 43.00 1.00 0.17 0.03
GD-006 47.75 48.25 0.50 0.32 <0.01
GD-006 61.50 62.50 1.00 0.44 0.13
GD-006 96.50 101.50 5.00 0.77 0.05
Diamond including 98.50 101.50 3.00 1.22 **0.07 **
including 100.75 101.50 0.75 4.27 0.03
GD-006 159.00 160.00 1.00 0.16 0.01
GD-006 171.00 172.00 1.00 0.13 <0.01
RC GR-007 44.00 45.00 1.00 0.18 0.01
GR-007 50.00 51.00 1.00 0.21 0.01
GR-008 20.00 22.00 2.00 0.34 0.06
GR-008 27.00 33.00 6.00 0.46 0.05
including 30.00 32.00 2.00 0.49 **0.07 ** 1.06
RC GR-008 72.00 73.00 1.00 0.16 0.16
GR-008 86.00 87.00 1.00 0.19 0.09
GR-008 138.00 139.00 1.00 0.21 <0.01
GR-008 150.00 151.00 1.00 0.12 0.05
GR-008 179.00 180.00 1.00 0.14 0.05

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HOLE TYPE HOLE ID From To Interval Cu(%) Au(g/t) Zn(%)
GR-009 1.00 5.00 4.00 1.16 0.12
including 1.00 3.00 2.00 2.07 0.21
RC GR-009 30.00 31.00 1.00 0.12 0.01
GR-009 35.00 36.00 1.00 0.28 0.05
GR-009 100.00 108.00 8.00 0.28 0.12
including 105.00 106.00 1.00 **1.54 ** 0.56
GR-009 145.00 146.00 1.00 0.20 0.06
GR-009 149.00 150.00 1.00 0.35 0.29
RC GR-010 15.00 17.00 2.00 0.45 <0.01
GR-010 28.00 29.00 1.00 0.14 0.01
GR-010 36.00 38.00 2.00 0.39 0.03
GR-010 48.00 53.00 5.00 0.18 **0.07 **
GR-010 67.00 68.00 1.00 0.11 0.04
GR-011 5.00 7.00 2.00 0.15 0.01
RC GR-011 16.00 24.00 8.00 0.16 0.13
including 18.00 19.00 1.00 0.30 0.69
GR-012 25.00 26.00 1.00 0.35 0.01
GR-012 30.00 31.00 1.00 0.14 0.06
GR-012 51.00 54.00 3.00 2.36 0.40
RC including 51.00 53.00 2.00 3.42 **0.57 **
GR-012 58.00 60.00 2.00 0.18 0.05
GR-012 64.00 67.00 3.00 0.27 0.02
GR-012 91.00 92.00 1.00 0.13 0.11
GR-013 0.00 7.00 7.00 0.36 **0.07 **
GR-013 11.00 12.00 1.00 0.43 0.24
GR-013 26.00 42.00 16.00 0.38 0.69
RC including 31.00 32.00 1.00 2.53 0.24
including 37.00 38.00 1.00 1.60 9.98
GR-013 58.00 59.00 1.00 0.15 0.03
RC GR-014 24.00 26.00 2.00 0.18 0.01
GR-014 29.00 30.00 1.00 0.40 <0.01
GR-014 34.00 35.00 1.00 0.21 <0.01
GR-015 168.00 170.00 2.00 **1.04 ** 0.36
including 168.00 169.00 1.00 1.97 0.69
RC GR-015 183.00 191.00 8.00 0.89 0.25
including 185.00 191.00 6.00 1.10 0.28
including 188.00 190.00 2.00 2.35 0.62
RC GR-016 No Significant Results
GD-017 27.00 28.00 1.00 0.11 0.07
GD-017 61.00 67.00 6.00 0.30 **0.04 **
Diamond including 63.00 63.50 0.50 **2.57 ** 0.53
GD-017 70.00 70.50 0.50 0.91 <0.01

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HOLE TYPE HOLE ID From To Interval Cu(%) Au(g/t) Zn(%)
GD-018 36.50 37.50 1.00 0.7 0.16
GD-018 43.00 65.00 22.00 0.46 0.60
including 43.00 49.00 6.00 0.85 0.19
including 44.50 47.50 3.00 1.46 0.23
Diamond including 62.50 65.00 2.50 **1.81 ** 4.73
GD-018 74.00 76.00 2.00 0.25 1.26
GD-018 86.00 87.00 1.00 0.12 0.10
GD-018 94.00 95.00 1.00 0.14 0.05

Table 2: Gem Prospect significant drill results (length weighted averages) at a 0.10% copper lower cut.

Geological and geotechnical evaluation of the diamond core drill holes has furthered CYU’s understanding of the mineralised system at the Gem Prospect. The mineralised zone consists of a main north west trending, moderately to steeply dipping, recrystallised shear zone that contains a series of stacked tensional shallow north easterly dipping quartz – chalcopyrite – pyrite – magnetite +/– pyrrhotite vein sets. Importantly a large north east trending mineralised aplite dyke containing moderate disseminated chalcopyrite mineralisation has been defined . Disseminated copper mineralisation directly related to intrusives has significant economic implications, examples are not known of a similar style in the Mt Isa region. Preliminary interpretation has also identified a series of unmineralised medium grained granite dykes that appear to be stoping out the mineralisation in parts. Most of the prospect is covered by alluvium with minimal outcrop observed. GD-017 was drilled down dip and along the contact of one of these unmineralised dykes ( Figure 3 ).

In late July 2009 an orientation time-domain electromagnetic (TEM) ground geophysical survey was undertaken. The survey comprised two lines of 500m length using a 100m moving loop configuration. Results from this survey, returned two anomalies. Quantitative analysis of these anomalies was made difficult due to the presence of a noisy overburden signal masking these conductors. A larger scale 1.2km by 700m TEM ground geophysical survey utilising a fixed loop configuration is planned to be undertaken that should overcome the masking effect. Results from this survey, in conjunction with drill section and plan geological interpretation, will assist in planning a third round of drilling at Gem. Future drilling will determine the extent of this new, shallow copper gold mineralised system.

About CYU

CYU is an Australian company formed to explore for and develop minerals in Australia and overseas. Cornerstone investor, Yunnan Copper Industry (Group) Co Ltd, is one of China’s largest copper producers. CYU is targeting high quality copper, gold and uranium projects with eleven wholly owned Exploration Permit for Minerals (EPM’s) in the Mt Isa Inlier, Ravenswood-Pentland Province and the Clermont Inlier in Queensland.

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For further information please contact;

Mr Jason Beckton Kevin Kartun Managing Director Account Director CYU Financial & Corporate Relations 0438 888 612 (02) 8264 1003

or visit the website, www.cycal.com.au

Competent Person’s Statement

The information in this report that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Richard Hatcher, who is a Member of the Australian Institute of Geologists and is a Senior Geologist of China Yunnan Copper Australia Ltd. Mr Hatcher has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the "Australasian Code for Reporting of Exploration Results and Mineral Resources. ". Mr Hatcher consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

See Figures 1 to 3 below.

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Figure 1. CYU project locations - Mt Isa and Cloncurry.

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Figure 2. Gem interpretive prospect scale map.

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Figure 3. Simplified Section 7758500mN – Gem Prospect

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