Chalice fills up on Eritrean agreement
THE BOURSE WHISPERER: ASX and TSX-listed gold exploration company Chalice Gold Mines has signed an 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.
Chalice said the agreement sets the pendulum swinging for final permitting, financing and development of the Zara gold project.
“Reaching an ownership agreement with ENAMCO enables us to move forward towards development of this high grade, low cost gold project,” Chalice Gold Mines managing director Doug Jones said in the company announcement.
“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.”
The agreement covers the high-grade Koka gold deposit as well as the Zara North, Central and South Exploration Licences.
The Koka gold deposit lies within the 547 square kilometre Zara block of exploration licences where Chalice is currently undertaking a drilling program in order to test IP resistivity targets along strike from the Koka deposit.
Chalice also holds 100% of a further 825 sqkm 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.
According to Chalice this package hosts numerous, high potential, early and advanced stage gold and base metal exploration targets and it is currently actively exploring these licences with the aim of discovering significant new deposits.
The new agreement excludes Chalice’s 100% owned Mogoraib North and Hurum exploration licences.
In its announcement Chalice described Koka as, “one of the highest grade undeveloped open pittable gold deposits in the world with Probable Mineral Reserves of 4.6 million tonnes grading 5.1 grams per tonne gold for 760,000 contained ounces of gold.”
Under the 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 Mining will own, develop and operate the Koka gold mine, and will own and explore the surrounding Zara Licences.
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).