From: Biniam Haile \(SWE\) (eritrea.lave@comhem.se)
Date: Mon Aug 17 2009 - 11:06:14 EDT
Chalice to Complete African Gold Merger, Steps Up Exploration at Zara
Gold Project
Monday , 17 Aug 2009
Chalice Gold Mines Limited (ASX: CHN; "Chalice") will open a fresh
chapter in its history as an African-focused gold exploration and
development company this week following receipt of final Court approval
of its merger with fellow Perth-based junior, Sub Sahara Resources.
The merger will now be implemented by the issue of Chalice shares to
Sub-Sahara shareholders and is scheduled to be fully completed by 2
September 2009 following the de-listing of Sub-Sahara shares from ASX on
14 August 2009.
Following allotment of these shares, Chalice will have approximately 121
million shares on issue and a strong funding position with the ability
to accelerate the exploration and evaluation of the Zara Gold Project in
Eritrea as the focus of an international gold development strategy.
The completion of the merger will result in Chalice having 80% ownership
of the high-grade 944,000oz Zara Gold Project in Eritrea, East Africa,
laying the foundations for a long-term gold exploration and development
strategy in the Arabian-Nubian Shield.
In addition to the Zara Project in Eritrea, this emerging gold and base
metal province hosts the ~13Moz Sukari Gold Project in Egypt, the ~2
million ounce Ariab/Hassai gold and base metal deposit in Sudan and,
within Eritrea itself, the ~1Moz Bisha gold and base metal deposit -
which recently secured financing to proceed with a world-class mining
development.
With the merger now practically completed, Chalice is preparing to step
up exploration and feasibility work at the Zara Project ahead of the
scheduled completion of a Scoping Study in October on an initial open
pit/longer term underground mine development. Activities either planned
or already underway at Zara include:
· a major program of water drilling and hydrological studies
(currently underway);
· a 5,000 metre diamond drilling program scheduled to commence
in September to in-fill the main Koka resource and upgrade it from its
current Indicated and Inferred status. Two diamond rigs will be
operating on a double-shift basis commencing in early September;
· approximately 2,500 metres of diamond drilling to test the
Koka deposit below the existing resource and other targets along strike;
· metallurgical and geotechnical test work utilizing purpose
drilled diamond core currently stored at Ammtec Limited's Perth facility
(currently underway); and
· the commencement of a significantly expanded regional
exploration effort commencing with geophysics and geochemistry to refine
exploration targets.
Chalice's Executive Chairman, Mr Tim Goyder said:
"The merger with Sub-Sahara marks a major milestone for Chalice and
signals the beginning of an exciting new chapter in our history as an
Australian gold company. The objective of the merger was simple - to
combine our strong cash resources with a quality gold asset in the Zara
Project in one of the world's great emerging gold and base metal
provinces. We have been working over the past few months to prepare for
an aggressive campaign of drilling, evaluation and feasibility work
which will now get into full swing over the coming months.
"We have hit the ground running at the Zara Project, both with respect
to completing the current Scoping Study which is due out late October,
and assessing the exploration upside on offer in the area. Our
assessment of the Zara Project is that the mineralised system is not
closed off at depth and offers exciting exploration potential from
deeper drilling.
"In addition, our preliminary geological assessment of the region
suggests there is strong potential for multiple ore bodies. Given that
limited work has been undertaken outside of the immediate resource area,
we believe the exploration upside of the project is considerable.
"The exploration upside within our broader tenement holdings includes a
large IP anomaly to the south of the Koka deposit, associated with a
gold-mineralised microgranite with strong similarities to the main
deposit."
The Zara Gold Project, comprising a total tenement area of 615kmē
(including applications) lies approximately 160km northwest of Eritrea's
capital, Asmara, and within the southwestern part of the Late
Proterozoic Arabian-Nubian Shield. The current resource base at Zara
comprises an Indicated and Inferred Resource of 5.04 million tonnes at
5.8g/t Au for 944,000oz at a 1.2g/t cut-off at the Koka Deposit.
Canadian-based gold and base metal company Nevsun Resources Ltd recently
secured financing for a US$250 million development of the world-class
Bisha Project, located in Western Eritrea. The Bisha Mine will be a
low-cost gold producer for its first two years of production (~430,000
ounces gold per year) and a low-cost high-grade copper concentrate
producer (containing ~75,500 tonnes of contained copper metal per year)
for a further three years before commencing long-term zinc concentrate
production. Mining is scheduled to commence at Bisha in mid-2010.
With a population of some 4.4 million people, Eritrea is located in
Northeast Africa and is bordered by Sudan in the west, Ethiopia in the
south, and Djibouti in the southeast. A former Italian colony, Eritrea
has a unique cultural heritage which is reflected in the ubiquitous
coffee and cappuccino strips which can be found in its capital city,
Asmara.
Eritrea today offers a stable operating and social environment which is
conducive to conducting business and attracting foreign investment. In
recent years, the Government of Eritrea has been highly proactive in the
development of its mining industry and this is evident in the support of
Nevsun Resources' Bisha Project and other major projects within the
Country.
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