Date: Wed, 2 Nov 2011 13:21:49 +0100
Chalice moves closer to developing Eritrean gold mine
By: <http://www.miningweekly.com/author.php?u_id=159> Esmarie Swanepoel
2nd November 2011
Updated 2 hours 17 minutes ago
PERTH (miningweekly.com) - Gold miner Chalice has taken a key step towards production at its Koka gold mine after executing a mining agreement with the government of Eritrea.
ASX- and TSX-listed Chalice said on Wednesday that the mining agreement contained the provisions governing the future development and operation of the Zara project, which hosts the Koka gold mine.
Chalice's 60%-owned Eritrean joint venture (JV) company, Zara Mining has now also applied for a mining licence for a period of 18 years, which the Eritrean government advised would be issued shortly.
Tenders for the construction of the plant and mine were being received and assessed, with the final selection of a contractor expected to occur before the end of the year. Subject to financing and the granting of all necessary permits and licences, this would likely enable Chalice to begin production at Koka in late 2013.
"We look forward to financing the Koka gold mine and starting construction in the first part of next year. Together with our Eritrean partners, we hope to have a significant positive impact on the Eritrean economy and workforce," said chairperson Tim Goyder.
He noted that the Koka gold mine had a probable reserve of some 760 000 oz, grading 5.1 g/t gold, and an indicated mineral resource of 840 000 oz, grading 5.3 g/t gold.
The project's feasibility study is based on an average production of around 104 000 oz/y of gold over a seven-year life-of-mine, at a cash cost of $338/oz.
Zara Mining is 30% held by the government of Eritrea, through the Eritrean National Mining Corporation.
Edited by: Creamer Media Reporter
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