webmaster
© Copyright DEHAI-Eritrea OnLine, 1993-2011
All rights reserved
From: Berhane Habtemariam (Berhane.Habtemariam@gmx.de)
Date: Wed Jun 15 2011 - 15:47:37 EDT
Chalice and ENAMCO Reach Agreement Terms for Joint Ownership of the Zara
Project
June 15, 2011 10:27 ET
US$32M Payment to Underpin Funding for Development of 100,000oz Per Annum
Gold Mine in Eritrea
PERTH, WESTERN AUSTRALIA--(Marketwire - June 15, 2011) - Chalice Gold Mines
Limited (TSX:CXN)(ASX:CHN) is pleased to announce that it has reached
agreement with the Eritrean National Mining Corporation ("ENAMCO") for
ENAMCO's acquisition of a 30% participating interest in Chalice's Zara Gold
Project in Eritrea, East Africa, paving the way for final permitting,
financing and development of the Zara Gold Project.
The agreement covers the high-grade Koka Gold Deposit ("Koka"), as well as
the Zara North, Central and South Exploration Licences (the "Zara Licences")
but excludes the Company's 100% owned Mogoraib North and Hurum exploration
licences. Koka is one of the highest grade undeveloped open pittable gold
deposits in the world with Probable Mineral Reserves of 4.6 million tonnes
grading 5.1g/t gold for 760,000 contained ounces of gold.
Chalice is currently drilling targets around the Koka deposit, targeting
additions to its mineral resource and reserve inventory.
Terms of the Agreement
ENAMCO has agreed to pay to Chalice US$32 million for a 30% participating
interest in the Zara Licences which will be represented by an interest in
the operating company, Zara Mining SC ("Zara"). Zara will own, develop and
operate the Koka Gold Mine, and will own and explore the surrounding Zara
Licences.
In addition to this amount, ENAMCO will pay Chalice approximately US$2
million (subject to audit), which represents a reimbursement to Chalice of
ENAMCO's pro-rata share of exploration costs expended to date on the Zara
Licences which fall outside of the Koka mining licence.
Payment will be made within six months of the signing of a shareholders'
agreement, which is expected to be completed shortly. Following completion
of the agreement, the Zara Project's ownership structure will be Chalice
(60% participating interest) and ENAMCO (30% participating interest, 10%
free carried interest).
Chalice and ENAMCO will contribute to the future development costs of Koka,
and to future exploration expenditures on the Zara Licences, on a 2/3 and
1/3 basis, in line with their respective share of the overall participating
interest.
Looking Forward
The proceeds of the transaction will be used to fund Chalice's equity
portion of the planned mine development financing. Chalice will now work
with ENAMCO to obtain the necessary mining licences and permits, and the
parties look forward to working together to develop and operate the Koka
Gold Mine.
As detailed in Chalice's news release dated August 13, 2010 summarizing the
results of an independent feasibility study, the average mine production is
expected to be 104,000 ounces of gold per annum over a mine life of seven
years, at a low cash cost of US$338/oz gold. Additional details on the
feasibility study can be found in the Technical Report filed under the
Company's profile on SEDAR at <http://www.sedar.com> www.sedar.com.
Doug Jones, Managing Director of Chalice, said: "Reaching an ownership
agreement with ENAMCO enables us to move forward towards development of this
high grade, low cost gold project. We have an excellent working relationship
with ENAMCO and look forward to building a successful and profitable mine
for the benefit of the Zara shareholders and the Eritrean people."
About Chalice
Chalice Gold Mines Limited is focused on gold mine development and
exploration in Eritrea. It is developing, together with its 40% partner
ENAMCO (the Eritrean National Mining Corporation), the high grade, open pit
Koka Gold Deposit. The Koka Gold Deposit hosts a JORC and NI 43$B!>(B101
compliant Probable Mineral Reserve of 4.6 million tonnes with a grade of 5.1
g/t gold, containing 760,000 ounces.
The low cash operating cost of US $338/oz gold is expected to be in the
lowest quartile of global gold mine production costs. Planned mine
production will average 104,000 gold ounces per year over a 7 year mine
life.
The Koka Gold Deposit lies within the 547 km2 Zara block of Exploration
Licences where Chalice currently has an active drilling program underway to
test IP resistivity targets along strike from the Koka deposit.
Chalice also holds 100% of a further 825 km2 of exploration ground
consisting of the Hurum license along strike from the Zara licences, and the
Mogoraib North licence proximal to Nevsun's Bisha Mine. This extensive
exploration package hosts numerous, high potential, early and advanced stage
gold and base metal exploration targets. Chalice is undertaking a systematic
exploration effort on these licences with the aim of discovering significant
new deposits.
TIM GOYDER, Executive Chairman
Competent Persons and Qualified Person Statement
The information in this report that relates to Exploration Results is based
on information compiled by Dr Doug Jones, a full-time employee and Director
of Chalice Gold Mines Limited, who is a Member of the Australasian Institute
of Mining and Metallurgy and is a Chartered Professional Geologist. Dr Jones
has sufficient experience in the field of activity being reported to qualify
as a Competent Person as defined in the 2004 edition of the Australasian
Code for Reporting of Exploration Results, Minerals Resources and Ore
Reserves, and is a Qualified Person under National Instrument 43-101 -
'Standards of Disclosure for Mineral Projects'. The Qualified Person has
verified the data disclosed in this release, including sampling, analytical
and test data underlying the information contained in this release. Dr Jones
consents to the release of information in the form and context in which it
appears here.
The Mineral Resource estimate was prepared by Mr. John Tyrrell who is a
Member of the Australasian Institute of Mining and Metallurgy. Mr. Tyrrell
is a full time employee of AMC and has sufficient experience in gold
resource estimation to act as Competent Person as defined in the 2004
Edition of the 'Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves (the JORC Code)' and is a Qualified
Person under National Instrument 43-101 - 'Standards of Disclosure for
Mineral Projects'. Mr Tyrrell consents to the inclusion of this information
in the form and context in which it appears.
The information in this statement of Mineral Reserves is based on
information compiled by Mr David Lee who is a Member of the Australasian
Institute of Mining and Metallurgy and a full time employee of AMC. Mr Lee
has sufficient relevant experience to be a Competent Person as defined in
the JORC Code and is a Qualified Person under National Instrument 43-101 -
'Standards of Disclosure for Mineral Projects'. Mr Lee consents to the
inclusion of this information in the form and context in which it appears.
Forward Looking Statements
This document may contain forward-looking information within the meaning of
Canadian securities legislation and forward-looking statements within the
meaning of the United States Private Securities Litigation Reform Act of
1995 (collectively, forward-looking statements). These forward-looking
statements are made as of the date of this document and Chalice Gold Mines
Limited (the Company) does not intend, and does not assume any obligation,
to update these forward-looking statements.
Forward-looking statements relate to future events or future performance and
reflect Company management's expectations or beliefs regarding future events
and include, but are not limited to, statements with respect to the
estimation of mineral reserves and mineral resources, the realization of
mineral reserve estimates, the likelihood of exploration success, the timing
and amount of estimated future production, costs of production, capital
expenditures, success of mining operations, environmental risks,
unanticipated reclamation expenses, title disputes or claims and limitations
on insurance coverage. In certain cases, forward-looking statements can be
identified by the use of words such as plans, expects or does not expect, is
expected, budget, scheduled, estimates, forecasts, intends, anticipates or
does not anticipate, or believes, or variations of such words and phrases or
statements that certain actions, events or results may, could, would, might
or will be taken, occur or be achieved or the negative of these terms or
comparable terminology. By their very nature forward-looking statements
involve known and unknown risks, uncertainties and other factors which may
cause the actual results, performance or achievements of the Company to be
materially different from any future results, performance or achievements
expressed or implied by the forward-looking statements. Such factors
include, among others, risks related to actual results of current
exploration activities; changes in project parameters as plans continue to
be refined; future prices of mineral resources; possible variations in ore
reserves, grade or recovery rates; accidents, labour disputes and other
risks of the mining industry; delays in obtaining governmental approvals or
financing or in the completion of development or construction activities; as
well as those factors detailed from time to time in the Company's interim
and annual financial statements and management's discussion and analysis of
those statements, all of which are filed and available for review on SEDAR
at <http://sedar.com> sedar.com. Although the Company has attempted to
identify important factors that could cause actual actions, events or
results to differ materially from those described in forward-looking
statements, there may be other factors that cause actions, events or results
not to be as anticipated, estimated or intended. There can be no assurance
that forward-looking statements will prove to be accurate, as actual results
and future events could differ materially from those anticipated in such
statements.
Accordingly, readers should not place undue reliance on forward-looking
statements.
Cautionary Note
For readers to fully understand the information in this news release, they
should read the Technical Report for the Koka Gold Deposit dated July 27,
2010 (available at <http://www.chalicegold.com/> www.chalicegold.com) in
its entirety, including all qualifications, assumptions and exclusions that
relate to the information set out in this news release which qualifies the
Technical Information. Readers are advised that mineral resources that are
not mineral reserves do not have demonstrated economic viability. The
Technical Reports are each intended to be read as a whole, and sections
should not be read or relied upon out of context. The technical information
in those reports is subject to the assumptions and qualifications contained
in the Technical Reports.
Shares outstanding: 250 million
Fully diluted: 257 million
----[This List to be used for Eritrea Related News Only]----