Monday , 07 Nov 2011 Chalice Gold Mines
Chalice Gold Mines (ASX: CHN; TSX: CXN) and its 60% owned subsidiary Zara Mining Share Company are pleased to report that further high-grade gold intercepts have been received from diamond drilling at the Koka South and Debre Konate prospects, located immediately south of the flagship Koka Gold Deposit at its Zara Project in northern Eritrea (see Figure 1).
Diamond drilling in the second half of 2011 (see Figure 2) has focused on testing of high priority targets within a 7.5km long corridor encompassing the Koka deposit (Probable Mineral Reserve of 760,000oz _at_ 5.1g/t gold), where Chalice and its partner ENAMCO are planning to commence development of an open-pit mine in early 2012 (ASX announcement - November 2, 2011).
The new results have confirmed and extended previously intersected high-grade mineralisation at Koka South and identified a significant new mineralized zone at Debra Konate, ~2.5km south of the Koka Deposit.
Koka South
The Koka South prospect, which adjoins the Koka Main deposit to the south, was drilled in 2010, returning intersections of up to 1m at 92 g/t gold (see ASX announcement - July 21, 2010). A further 17 diamond drill holes were drilled in the current campaign for 3,034 metres (see Figure 3). High-grade gold intervals were encountered in most of the holes that intersected the prospective microgranite/porphyry host, including:
. 1m _at_ 168.8g/t Au from 144m (ZARD 219)
. 5m _at_ 86.2g/t Au from 98m including 1m _at_ 401g/t Au (repeat assay
341g/t) and 1m _at_ 25.7g/t Au from 113m (ZARD 221)
. 1m _at_ 44.4g/t Au from 145m (ZARD 202)*
. 4m _at_ 29.6g/t Au from 116m including 1m _at_ 101.6g/t Au (ZARD 215)
. 1m _at_ 15.9g/t Au from 164m (ZARD 209)*
. 8m _at_ 7.36g/t Au from 162m including 1m _at_ 20g/t Au and 2m @ 12.7g/t
Au from 178m (ZARD 223)
. 3m _at_ 4.5g/t Au from 134m (ZARD 210)*
. 2m _at_ 13.1g/t Au from 53m and 1m _at_ 8.6g/t Au from 80m (ZARD 222)
. 2m _at_ 12.8g/t Au from 103m (ZARD 211)*
. 5m _at_ 5.9g/t Au from 138m including 1m _at_ 15g/t Au and 1m @ 13.1g/t
Au (ZARD 217)
. 1m _at_ 11.7g/t Au from 148m (ZARD 213)
. 1m _at_ 16.5g/t Au from 32m and 3m _at_ 8.7g/t Au from 48m (ZARD 216)
. 2m _at_ 7.4g/t Au from 117m (ZARD 218)
A full tabulation of all significant assays is appended to this Announcement.
The latest results from Koka South confirm that previously reported high-grade mineralisation extends to depth and remains open to the south and at depth. Mineralisation is hosted by a mixed microgranite and porphyry intrusive body which shows various degrees of brecciation and quartz stockworking. The mineralisation is invariably accompanied by accessory amounts of galena and sphalerite (lead and zinc sulphides) which are increasingly recognized as critical pathfinder minerals in the Koka gold camp.
The widths and grades of mineralisation encountered have the potential to provide a significant extension to the Koka deposit and will be explored by further drilling in the coming months.
Debre Konate
The previously undrilled Debre Konate prospect, located ~2.5km south of Koka, was initially targeted as an IP resistivity anomaly supported by minor artisanal workings and a significant gold and lead soil geochemical anomaly. ZARD 227 (see Figure 2) was the first hole drilled into this prospect and has intersected an extensive low-grade mineralised system grading 0.93g/t Au (uncut) over 199 metres (83m to 282m downhole).
The mineralisation is hosted by microgranite with numerous zones of narrow, higher grade mineralisation contained within the low-grade envelope. Better intersections (uncut) included:
. 1m _at_ 38.4g/t Au from 146m
. 1m _at_ 10.3g/t Au from 180m
. 2m _at_ 14.7g/t Au from 223m
. 4m _at_ 21g/t Au from 256m
Assays are pending from two additional holes completed into this zone.
The intersection of significant new gold mineralisation at Debre Konate is particularly encouraging, as this opens up a previously unrecognized zone of mineralisation that appears to have potential for larger, bulk-tonnage styles of mineralisation compared with the smaller-tonnage, high-grade style of deposit at Koka.
Chalice Gold's Managing Director, Dr Doug Jones, said the Company was very encouraged by the new results, which highlighted the prospectivity of the Zara Project and the potential for discovering additional Koka-style orebodies, as well as now a potential new style of bulk tonnage mineralisation such as that found at Debra Konate.
"With project development and production now fast-approaching at Koka, we will increasingly turn our attention to exploration to continue to grow our resource inventory," Dr Jones said. "These results have confirmed two priority targets for follow-up drilling, and there are many more to follow next year and beyond."
Ends
About Chalice
Chalice Gold Mines Limited is an exploration and development company which owns a 60% beneficial interest in the high grade, open-pittable Koka Gold Deposit and a substantial, largely unexplored, land package in Eritrea. The Koka Gold Deposit consists of an $B!H (Bin-pit $B!I (B JORC and NI 43-101 compliant Indicated Mineral Resource of 5.0 million tonnes grading 5.3 grams of gold per tonne, containing 840,000 ounces of gold. This Mineral Resource includes a Probable Mineral Reserve of 4.6 million tonnes grading 5.1 grams of gold per tonne, containing 760,000 ounces of gold. The Company is focused on developing the Koka Gold Deposit into a low cost gold mine, which is expected to produce 104,000 ounces of gold per year over a 7 year mine life at an average cash cost of US$338/oz gold (refer to the 43-101 Technical Report on the Koka Gold Deposit, Eritrea dated 27 July 2010). Chalice also holds a substantial strategic ground position of 1,372 km2 consisting of licenses along strike of the Koka Gold Deposit, and proximal to Nevsun $B!G (Bs Bisha Mine. These exploration concessions host numerous, high potential, early and advanced stage gold and base metal exploration targets. Chalice is undertaking a systematic exploration effort on these exploration concessions with the aim of discovering significant new deposits.
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