AUKING MINING LIMITED — Capital/Financing Update 2011

Jan 5, 2011

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ASX/Media Announcement

6[th] January 2011

Heavy Rare Earth Element (HREE) Discovery at Mt Dorothy - Mary Kathleen JV with Goldsearch Limited.

• A broad zone of Yttrium (Y) and Heavy Rare Earth Element (HREE) from MDD005: 16m @ 1249 ppm (1.24 kg/tonne) total HREE-Y from 71m.

• Revised analysis of results from MDD006 show: 36m @1.54% Cu and 198ppm Co from 50m.

• Previously reported 28m @ 1.9% Cu and 247ppm Co from 50m; incl. 9m @ 5.5% Cu and 205ppm Co from 55m; incl.2m @ 10.5% Cu and 732ppm Co from 61m associated with chalcocite in breccia.

• MDD006 is now comparable in width and copper content to the previously reported 50 metre higher MDR002 which returned an intercept of 35m @ 1.52% copper and 397ppm cobalt from 17m downhole.

China Yunnan Copper Australia Limited (ASX: CYU) announces today a significant heavy rare earth element (HREE) intercept for hole MDD005 from the Mount Dorothy prospect. In addition the Company is able to advise of enhanced widths from the previously announced copper cobalt intercepts for MDD006 after the return of multi-element results from drilling on its Mount Dorothy copper+cobalt prospect, which is part of the Mary Kathleen joint venture with Goldsearch Limited (ASX: GSE) in Northwest Queensland.

CYU’s Managing Director Jason Beckton, said “These additional results from previously reported drillholes significantly enhance the importance of this new zone. The discovery of the heavy rare earth element Yttrium at Mount Dorothy is exciting, and the increased element associations we are seeing with HREE-Y suggest a very important target for future drilling after the current wet season.”

“Mount Dorothy is south of the Elaine REE uranium inferred resource and the Mary Kathleen uranium/REE deposit, which suggests the area may be an important new REE province. The previous exploration work only targeted uranium and so rare earths would not have been tested for and will have remained undiscovered. ”

Detailed results for drill hole MDD005 are shown in table 1 below.

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Table 1: REE & Yttrium Mineralised drill intercept from MDD005 (ppm – parts per million)

mFrom mTo	mFrom mTo	La Ce Pr Nd Sm Eu Gd Tb Dy Ho Er Tm Yb Y Total Total TREEY/HREEY HREE% REE Y HREEY	La Ce Pr Nd Sm Eu Gd Tb Dy Ho Er Tm Yb Y Total Total TREEY/HREEY HREE% REE Y HREEY	La Ce Pr Nd Sm Eu Gd Tb Dy Ho Er Tm Yb Y Total Total TREEY/HREEY HREE% REE Y HREEY	La Ce Pr Nd Sm Eu Gd Tb Dy Ho Er Tm Yb Y Total Total TREEY/HREEY HREE% REE Y HREEY	La Ce Pr Nd Sm Eu Gd Tb Dy Ho Er Tm Yb Y Total Total TREEY/HREEY HREE% REE Y HREEY	La Ce Pr Nd Sm Eu Gd Tb Dy Ho Er Tm Yb Y Total Total TREEY/HREEY HREE% REE Y HREEY	La Ce Pr Nd Sm Eu Gd Tb Dy Ho Er Tm Yb Y Total Total TREEY/HREEY HREE% REE Y HREEY	La Ce Pr Nd Sm Eu Gd Tb Dy Ho Er Tm Yb Y Total Total TREEY/HREEY HREE% REE Y HREEY	La Ce Pr Nd Sm Eu Gd Tb Dy Ho Er Tm Yb Y Total Total TREEY/HREEY HREE% REE Y HREEY	La Ce Pr Nd Sm Eu Gd Tb Dy Ho Er Tm Yb Y Total Total TREEY/HREEY HREE% REE Y HREEY	La Ce Pr Nd Sm Eu Gd Tb Dy Ho Er Tm Yb Y Total Total TREEY/HREEY HREE% REE Y HREEY	La Ce Pr Nd Sm Eu Gd Tb Dy Ho Er Tm Yb Y Total Total TREEY/HREEY HREE% REE Y HREEY	La Ce Pr Nd Sm Eu Gd Tb Dy Ho Er Tm Yb Y Total Total TREEY/HREEY HREE% REE Y HREEY	La Ce Pr Nd Sm Eu Gd Tb Dy Ho Er Tm Yb Y Total Total TREEY/HREEY HREE% REE Y HREEY	La Ce Pr Nd Sm Eu Gd Tb Dy Ho Er Tm Yb Y Total Total TREEY/HREEY HREE% REE Y HREEY	La Ce Pr Nd Sm Eu Gd Tb Dy Ho Er Tm Yb Y Total Total TREEY/HREEY HREE% REE Y HREEY	La Ce Pr Nd Sm Eu Gd Tb Dy Ho Er Tm Yb Y Total Total TREEY/HREEY HREE% REE Y HREEY	La Ce Pr Nd Sm Eu Gd Tb Dy Ho Er Tm Yb Y Total Total TREEY/HREEY HREE% REE Y HREEY
71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86	72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87	117 56 25 23 33 40 42 34 40 32 81 44 12 102 119 50	259 146 76 60 81 87 101 80 92 89 218 134 34 179 331 141	33 23 11 9 12 14 15 13 13 16 33 24 6 22 50 22	128 113 62 48 54 59 73 58 63 83 167 125 25 81 197 99	33 48 34 22 21 21 30 24 24 43 69 51 9 18 43 36	7 13 11 7 6 5 8 7 7 13 18 12 2 3 6 7	50 110 95 56 47 43 72 56 59 113 152 108 20 21 35 63	11 26 25 14 11 10 18 13 14 29 36 26 5 4 6 15	73 196 188 105 84 72 129 101 108 219 263 183 33 26 31 104	18 48 49 27 21 18 32 25 27 58 65 45 9 6 6 26	50 137 141 78 59 50 90 73 80 172 181 131 27 18 17 79	7 18 19 11 8 7 12 10 11 24 25 19 4 3 3 12	39 103 108 61 47 40 68 57 65 143 143 123 28 19 17 78	480 1350 1355 786 588 487 871 704 818 1700 1795 1245 260 173 154 751	1303 2387 2197 1305 1070 951 1559 1253 1421 2732 3244 2267 474 674 1015 1483	727 1988 1978 1137 864 725 1290 1038 1183 2457 2659 1878 385 269 270 1129	1.8 1.2 1.1 1.1 1.2 1.3 1.2 1.2 1.2 1.1 1.2 1.2 1.2 2.5 3.8 1.3	55.8 83.3 90.0 87.1 80.7 76.2 82.8 82.9 83.2 89.9 81.9 82.8 81.2 40.0 26.6 76.1

*HREE (Gd to Y)

The interval is strongly oxidised with abundant Fe oxides and clays. Intervals from other previously drilled RC holes further to the west are being assessed as no historic drilling was analysed for REE. All other CYU holes ( Refer figures 1 to 3 below) have been analysed for REE with full results due at the end of January. To date MDD005 is the most significant intercept with result due for MDD006, MDT001 and MDD008. Also CYU will resample former MIM Exploration drillholes in the government core storage facility in Mount Isa.

For background and to indicate possible economic implications, the prices of HREE Y are detailed below.

Table 1 reflects total HREE-Y of 1.24kg/tone. Market Prices for the oxides of the Heavy Rare Earth elements HREE-Ys are as follows - Y2O3 $82/kg, Dy2O3 $300/kg, Er2O3 $640/kg, Gd2O3 $55/kg, Nd2O3 $110/k (for comparison the price of Copper approximates $8/kg).

The high mean percentage of HREE-Y to Total REE-Y in these samples at 75% is noteworthy and the variation inside the intercept is likely to be the result of unknown mineral species to be determined in the current quarter.

In early 2011 geochemical studies will be completed to further determine the nature of the HREE mineralogy as some may be also phosphates.

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Figure 1. Plan of discovery Copper Cobalt HREE breccia for Mt Dorothy .

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Figure 2. MDD005 section which confirmed NE trend of the mineralised breccia. TFR = Top of non weathered rock.

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Figure 3. Although main breccias intercepts in the main fault are depicted, the MDD006 result at a non geological lower cut of 0.5% copper is 36m @ 1.54% copper and 198 ppm cobalt very similar in copper content to MDR002 (50 metres above) which returned an intercept of 35m @ 1.52% copper and 397ppm cobalt from 17m. MDD005 collar position is shown from reference although occurs on next section 50m to the North East.

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Table 2. Three holes are yet to be reported with results due for MDD007, MDT001 and MDD008.

						Depth m
Hole ID	East*	North*	RL*	Azi	Dip		Comments
MDD005	380,625	7,695,065	448	119.0	-60.0	150.10	reported
MDD006	380,604	7,695,027	448	120.5	-59.5	128.90	reported
**MDD007 **	380,605	7,695,029	449	113.5	-85.0	136.70
**MDT001 **	380,601	7,695,010	304	271.9	-42.4	66.20	Core tail to MDR001
MDD008	380,368	7,695,152	438	134.0	-60.0	150.00	Testing a splay

• Datum GDA94 zone 54 ** UTM Grid Azimuth

Competent Person’s Statement

The information regarding to Exploration Activities in this report that relates to the Mount Dorothy (EPM 14019) prospect and the Elaine Inferred Resource is based on information compiled by Jason Beckton, who is a Member of the Australian Institute of Geologists and is Managing Director of China Yunnan Copper Australia Ltd. Mr Beckton 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 Beckton consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

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 (YCI), is one of China’s largest copper producers. YCI’s largest shareholder is Chinalco.

Apart from the Mt Dorothy exploration program other current activities include;

• Drilling recommenced today January 6[th] at the Humitos Copper Porphyry project in Copiapo district, Chile. This has identified a series of shallow covered magnetic targets which warrant a 2000 metre RC program.

• Drilling to recommence January 10[th] with one diamond holes testing a new sulphide zone at the Elaine Copper Rare Earth Element – U inferred resource, part of the Mary Kathleen JV. Currently there is an inferred resource at Elaine of 83,000t @ 3,200ppm Total Rare Earth Oxide and 280 ppm U3O8.

• Continued review of projects under Memorandum of Understanding with CYU’s cornerstone investor Yunnan Copper Industries (YCI) to undertake regional exploration and project generation work in Yunnan Province, China and Laos.

• Proposed Reverse Circulation drilling in early 2011 at Stanley’s Hope Gold and the Pentland JV with Activex Ltd, Pentland, North East Queensland.

For further information please contact;

Mr Jason Beckton Richard Hatcher Managing Director Exploration Manager CYU CYU 0438 888 612 0400 720 792

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

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Figure 4 . Tenement location plan of Mount Isa Project (CYU 100%) and Goldsearch Limited Joint Venture Project). Mt Dorothy is located approximately 50 kilometres east of Mount Isa.

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