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AUKING MINING LIMITED Capital/Financing Update 2009

Jul 22, 2009

64355_rns_2009-07-22_76381269-7edf-465f-b4d0-ec7ef1704aba.pdf

Capital/Financing Update

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ASX/Media Announcement

23[rd] July 2009

FURTHER DRILL RESULTS EXTEND GEM PROSPECT – A NEW COPPER-GOLD DISCOVERY

Key Points

  • Encouraging results have been received from the Gem discovery, with reverse circulation and diamond drilling extending the mineralised strike length to 500 metres. The target is a new style of copper mineralisation within the Naraku Granite, Cloncurry.

  • Reverse circulation drilling results include:

GR-012 - 3m @ 2.36% copper and 0.40 g/t gold from 51m

GR-013 - 1m @ 2.53% copper and 0.24 g/t gold from 31m

GR-013 - 1m @ 1.60% copper and 9.98 g/t gold from 31m

GR-015 - 6m @ 1.10% copper and 0.28g/t gold from 185m

  • Previously reported Hole GR-003;

GR-003 - 38m @ 1.25% copper and 0.20g/t gold from 33m.

  • Mineralised zones consist a series of sub-parallel quartz - pyrite - chalcopyrite – pyrrhotite - magnetite vein sets and shears.

  • Additional assay results are awaited.

  • Ground TEM (time domain electromagnetic) geophysical survey completed. Combined with drilling information, results to be used in planning further extensional drilling.

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

A total of ten RC drillholes totalling 1,641m and three diamond core holes totalling 417.6m ( Figure 2 ) were completed in July 2009 ( Table 1 ). CYU considers these results very important in terms of discovering a significant iron oxide-copper-gold (IOCG) system. Mineralisation remains open down dip and along strike. All samples have been submitted to the laboratory. Diamond results are expected to be received in the coming weeks.

TYPE HOLE ID EAST* NORTH* RL (m) Dip (°) AZM (Grid) DEPTH (m)
DD
RC
RC
RC
RC
RC
RC
RC
RC
RC
RC
DD
DD
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
419389
419464
419423
419404
419462
419447
419427
419438
419439
419366
419417
419446
419414
7758531
7758559
7758597
7758586
7758522
7758511
7758501
7758460
7758802
7758802
7758255
7758562
7758258
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
060
060
060
060
060
060
060
060
090
090
360
240
060
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 (core drilling).

The Gem Prospect is considered to consist of a series of sub-parallel mineralised zones trending northwest. Early interpretation has defined three trends, namely, West Zone, Central Zone and East Zone . These zones consist of a series of sub-parallel quartzpyrite-chalcopyrite-pyrrhotite-magnetite vein sets and shears. Numerous old workings are observed on the surface of the prospect with an overall strike length greater than 650m. Results have been returned for all the RC drilling to date, while diamond core has been geologically logged, cut, sampled and assays are still pending (Table 2) .

The East Zone, initially tested by GR-001 returned a low grade near surface copper intersection of 21m @ 0.12% copper and 0.05g/t gold from 55m down hole depth. This intersection was targeted by two follow up RC holes, GR-014 and GR-015 . GR-015 drilled below this intersection returned 8m @ 0.89% copper, 0.25g/t gold from 183m down hole depth including a higher grade zone of 6m @ 1.10% copper, 0.28g/t gold

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from 185m down hole depth.

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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
including 61.00 66.00 5.00 0.16 0.05
including 68.00 69.00 1.00 0.12 0.02
including 73.00 76.00 3.00 0.20 0.10
RC GR-002* No Significant Results
GR-003* 33.00 71.00 38.00 1.25 0.20
RC
including 45.00 67.00 22.00 1.96 0.29
GR-004* 59.00 60.00 1.00 0.12 0.02
RC 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
Diamond GD-006 Assay Pending
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
RC 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
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
RC GR-009 1.00 5.00 4.00 1.16 0.12
including 1.00 3.00 2.00 **2.07 ** 0.21
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
RC GR-011 5.00 7.00 2.00 0.15 0.01
GR-011 16.00 24.00 8.00 0.16 0.13
including 18.00 19.00 1.00 0.30 0.69
RC 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
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

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HOLE TYPE HOLE ID From To Interval Cu(%) Au(g/t) Zn(%)
RC 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
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
RC GR-015 168.00 170.00 2.00 1.04 0.36
including 168.00 169.00 1.00 **1.97 ** 0.69
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
Diamond GD-017 Assay Pending
Diamond GD-018 Assay Pending

Table 2: Gem Prospect Significant Drill Results at a 0.10% copper lower cut. *Indicates previously reported.

Previously, GR-003 reported a near surface copper-gold intersection of 38m @ 1.25 % copper and 0.20 g/t gold from 33m down hole depth including a high grade interval of 22m @ 1.96% copper and 0.29 g/t gold . While assays are pending for the diamond holes, geological logging, structural and geotechnical measurements have identified the mineralisation being hosted within a steeply dipping sheared zone with internal north west dipping tensional vein sets .

GR-008 and GR-009 to the northwest returned low grade mineralized zones of 6m @ 0.46% copper, 0.05g/t gold from 27m down hole depth and 8m @ 0.28% copper, 0.12g/t gold from 100m down hole depth respectively. To the southeast GR-011 and GR-012 also returned mineralized zones of 8m @ 0.16% copper, 0.13g/t gold from 16m down hole depth and 3m @ 2.36% Cu, 0.40g/t Au from 51m down hole depth respectively.

GR-013 was collared at the main workings and along strike from GR-005 to follow up the west mineralized zone that was not properly tested in the first round of drilling. A near surface intersection was returned of 16m @ 0.38% copper, 0.69g/t gold from 26m down hole depth including two high grade zones of 1m @ 2.53% copper, 0.24g/t gold from 31m down hole depth and 1m @ 1.60% copper, 9.98g/t gold from 37m down hole depth.

Drilling to date has identified that mineralisation remains open at depth and along strike to the northwest and southeast. The host rock is defined as the Naraku Granite which is believed to be responsible for IOCG mineralisation in the district. Most of the prospect is covered by alluvium and minimal outcrop is observed.

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To assist in planning the next stage of drilling a time-domain electromagnetic (TEM) ground geophysical survey was completed on the 22[nd] July. The survey comprised two lines of 500m length using a 100m moving loop configuration. 50m loop moves with 25m moves over the target area were completed. Results from this survey, in conjunction with 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.

For further information please contact;

Mr Jason Beckton Managing Director CYU 0438 888 612

Kevin Kartun Account Director Financial & Corporate Relations (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.

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

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Figure 2. Gem interpretive prospect scale map. Sectional and three dimensional interpretation is ongoing and will be reported when further assay information is received from core samples. Gem remains open along strike to the north and south and at depth.

END

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