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From: B-Haile (eritrea.lave@comhem.se)
Date: Mon Feb 28 2011 - 03:18:52 EST
Monday, February 28, 2011
Chalice Gold Mines Limited
Directors' Report For the half year ended 31 December 2010
Dated this 25th day of February 2011
Please click here to read the report http://chalicegold.com/upload/documents/InvestorRelations/releases/31December2010HalfYearAccounts-FINAL.pdf
1. The Zara Project in Eritrea
1.1 Mine Permitting
Since completing the Koka Gold Deposit (Koka)feasibility study in July 2010, Chalice has been engaged in the permitting process including negotiating the terms of the Mining Agreement and the acquisition of the government's
interest in the Zara Project.
1.2 ENAMCO's Acquisition of 30% of the Zara Project
In November 2010, the Eritrean Government advised Chalice of its intention to purchase, at fair value, a 30% paid participating interest in the Zara Project (including the Koka Gold Deposit ("Koka")) through the Eritrean National
Mining Corporation (ENAMCO). This statutory right to acquire a further 30% paid participating interest is in addition to ENAMCO's 10% carried interest.
Both Chalice and ENAMCO are hopeful that an agreement on the fair value of the interest can be mutually agreed between the parties. If the parties cannot agree, then an independent valuation will be undertaken.
If, as Chalice currently expects, ENAMCO agrees to pay for their paid participating interest shortly after grant of the Mining Licence, the funding task for Chalice to develop Koka will be substantially reduced. The amount of funding that Chalice may need to source externally will be further reduced by ENAMCO's progressive contribution to development costs (which will be funded 33.33% by ENAMCO and 66.66% by Chalice).
1.3 Exploration Activities
During the half year, Chalice continued to ramp up its near-mine and regional exploration activities at the Zara Project with a focus on identifying new prospects to increase resources in the vicinity of Koka, which hosts an Indicated
Mineral Resource of 840,000oz at a grade of 5.3g/t gold. Near mine exploration activities include the prospective 6km long corridor extending from Koka to the Konate-Fah area some 5km to the south. A major new deep-penetration Induced Polarisation (IP) survey commenced over an area
Please click here to read the report http://chalicegold.com/upload/documents/InvestorRelations/releases/31December2010HalfYearAccounts-FINAL.pdf
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