Tianshan Gold Mountain pre-feasibility studies extended

• Pre-Feasibility Studies on the Gold Mountain project continuing, with completion now expected by early 2009.

• Key parameters reviewed to date include resource estimates, metallurgy and processing options, pit optimisation, mine scheduling, preliminary capital and operating costs.

• Remaining work includes a substantial column leach metallurgical test work programme, currently in progress, to confirm leach recoveries.

• The Pre-Feasibility Studies have also been expanded to include consideration of a Carbon-in-Leach (CIL) processing alternative, given confirmation of very low power costs ($US0.054pkh) available on site.

Tianshan Goldfields Limited ("Tianshan" or "the Company") (ASX: TGF) today announced an update on the ongoing Pre-Feasibility Studies to develop the resources at its 90%-owned Gold Mountain Project in northwest China, which comprise Measured, Indicated and Inferred Resources totalling 94.8 million tonnes at 0.9g/t gold for 2.64 million contained ounces (Table 1).

After reviewing the interim results of the Pre-Feasibility Studies, including the progress of metallurgical test work on the Gold Mountain deposits, Tianshan advises that the Pre-Feasibility Study will now continue until early 2009.

This is necessary to ensure that all development parameters are fully examined to underpin any decision to progress to a Full Feasibility Study in 2009 and to meet the  Company's internal investment criteria, as well as sufficient time to complete the current extensive metallurgical test work program.

Pre-Feasibility Study (PFS)

The basic process plant design and costing study for a heap leach operation undertaken by Bateman Engineering and the pit optimisations undertaken by Cube Engineering have now been completed on the principal Yelmand-Jinxi and Mayituobi deposits at Gold Mountain, with preliminary mine scheduling also completed.

An initial review of the PFS data and development scenarios was based on the following key parameters:

• Resource Estimates

• Metallurgy and Processing Options

• Pit Optimisation and Mine Scheduling

• Preliminary Capital and Operating Costs

Work currently in progress and required to finalise the PFS primarily comprises metallurgical tests commissioned in the second quarter of 2008. This work includes a substantial column leach metallurgical test work programme on ore-type samples for Yelmand, Jinxi and Mayituobi deposits to confirm leach recoveries and High Pressure Grind Roll (HPGR) trial crushing tests.

This test work has commenced at Kappes Cassidy & Associates (KCA) in Denver, USA and KHD (Humbolt Wedag GmbH) in Germany on samples received in early July and is estimated to be completed and evaluated by early 2009.

Bulk samples (each up to 1.5 tonnes), split from the same bulk composites for KCA column tests, for Yelmand-Jinxi and Mayituobi deposits, have also been dispatched to KHD in Germany for pilot scale testing of the amenability of the Gold Mountain ore types to processing using HPGR technology.

The primary objective of the pilot scale test work program is to generate bulk ore samples for column leach test work at KCAA. This will provide a direct comparison of leach recoveries between conventional crush and HPGR crushing.

Although the main focus of ongoing Pre-Feasibility Studies has been on developing a possible open pit heap leach processing operation, infrastructure studies to date have confirmed very low power costs ($US0.054pkh) available at the proposed mine site.

This fact has necessarily broadened the scope of the ongoing studies to include consideration of Carbon in Leach processing. It is expected that the inclusion of a CIL option in the current pre feasibility study will not adversely extend the completion of the PFS beyond that anticipated for completion of column leach tests.

Mining Licence Application

Chinese design institute, Beijing General Research Institute of Mining & Metallurgy (BGRIMM), was appointed to co-ordinate the preparation and submission of the Mining Licence Application.

BGRIMM will consult on the preparation of the Geology and Mineral Resource Report (GMRR) that incorporates the Chinese Code Resource Report. This report will eventually be submitted for review by the Ministry of Land and Resources and will provide the initiating document that feeds into the Environmental Impact Assessment (EIA) and Mine Area Scoping study - both requirements for the mining licence application.

This report is required to register the reserves with appropriate Development and Reform Committee required for the mining licence application to progress.

Metallurgical studies have been initiated in China as part of the parallel process with test work to be undertaken by Chinese certified laboratories reporting to Chinese codes.

Due to recent mineral industry regulatory changes effective 1 July 2008, metallurgical test work to be included in the Mining Licence Application process is required to be performed at Chinese approved laboratories. The effect of this new ruling will result in the current Mining Licence Application process extending into the first half of 2009.

BGRIMM have also been requested to review and update the preliminary PFS Capital Costs with costs representative of sourcing equipment and constructing in China.

Yours faithfully

Grant Thomas

Managing Director

Mr SL Allnutt (AusIMM, MAIG), Chief Geologist of Tianshan Goldfields Limited, compiled the technical aspects of this report relating to the Gold Mountain Project. Mr Allnutt has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity that is being reported on to qualify as a Competent Person as defined in the 2004 Edition of the Australasian Code for Reporting of Mineral Resources and Ore Reserves. Mr Allnutt consents to the inclusion in the report of the matters in the form and context in which it appears.

FOR FURTHER INFORMATION, PLEASE CONTACT:

Tianshan Goldfields Limited

Level 22, Allendale Square

77 St Georges Terrace

Perth WA 6000

Telephone: +61 8 9221 7729

Fax: +61 8 9221 7866

Keith Liddell - Non-Executive Chairman

Grant Thomas - Managing Director

Jason Bontempo - Executive Director