From: Berhane Habtemariam (Berhane.Habtemariam@gmx.de)
Date: Fri Apr 03 2009 - 10:57:16 EST
Sub-Sahara, Chalice merger to fund Eritrea project
Fri Apr 3, 2009 10:09am GMT
KAMPALA, April 3 (Reuters) - Australia's Sub-Sahara Resources (SBS.AX:
<http://af.reuters.com/stocks/quote?symbol=SBS.AX> Quote) and Chalice Gold
Mines Ltd (CHN.AX: <http://af.reuters.com/stocks/quote?symbol=CHN.AX>
Quote) said on Friday the two firms planned to merge to help fund
Sub-Sahara's lucrative Eritrean gold project.
Sub-Sahara's Zara project has an estimated 1 million ounces of gold in the
west of the Red Sea state, where international prospectors expect large
precious gold and base metal finds.
"The proposed merger will combine Chalice's strong cash position of over 10
million (Australian dollars) with Sub-Sahara's 69 percent interest in the
high grade Zara Gold Joint Venture in Eritrea, East Africa," the companies
said.
"The proposed merger represents an excellent opportunity to fund the Zara
Gold Project in an extremely difficult economic climate," Barry Bolitho,
Sub-Sahara's chairman, said in the statement.
Sub-Sahara has projects in Eritrea and Tanzania. There are six companies
from Canada, China and Australia exploring for gold and industrial metals in
Eritrea.
Sub-Sahara shareholders -- who will own 39 percent of the merged company --
will receive one Chalice share for every 10.73 Sub-Sahara shares, the
statement said.
Chalice will pay Africa Wide Resources Ltd $1.2 million Australian dollars
($852,300) for its 11.12 percent interest in Zara and 454,000 dollars to
reimburse past exploration expenses.
The merger is subject to Sub-Sahara shareholder approval, regulatory
consent, Chalice completing an agreement with Africa Wide Resources, court
approval and various other issues. ($1=1.408 Australian Dollars) (Reporting
by Jack Kimball; editing by Mike Nesbit)
C Thomson Reuters 2009 All rights reserved
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