Eritrea

Chalice Gold Mines Limited (ASX:CHN) advises that following its merger with Sub-Sahara Resources NL (“Sub-Sahara”), it became entitled to a payment of A$5 million upon commercial production at the Nyanzaga Project in Tanzania.

The Nyanzaga Project, which hosts the Tusker Gold Project, is currently owned 49% by Tusker Gold Limited (ASX:TKA) and 51% by Barrick Gold Corporation (“Barrick”) following Sub-Sahara’s sale of its interest in the project to Indago Resources Limited (ASX:IDG) (“Indago”) in February 2009. Barrick has announced a takeover bid for Tusker.

As advised to ASX by Indago on 8 February 2010, Indago has entered into a Pre-bid Acceptance Agreement with Barrick in respect of 17.5 million Tusker shares it owns and has notified that it intends to accept the Barrick bid for its remaining 50 million shares.

Should the Barrick takeover of Tusker be successful, Barrick will own 100% of the Nyanzaga Project. Chalice sees this as a positive transaction which may expedite the development of the Nyanzaga Project and hence receipt by Chalice of the A$5 million deferred consideration

Chalice Gold Mines has projects in Eritrea and Australia. In 2009 the merger with Sub-Sahara Resources gave Chalice a 80% stake in the Zara Gold Project in Eritrea.

At the end of 2009 Chalice subscribed for 1.6M shares in London Africa at 12.5p per share for GBP200,000 (A$358,000) which will gave Chalice an 11.8% interest in the Company. London Africa Limited signed in June 2009 a prospecting licence to cover 1562 km² around Akordat – Orota in central Eritrea.

Related posts:

1. Chalice Gold Mines Quarterly Report
2. Chalice Gold Mines Plans Listing on Toronto Stock Exchange
3. Eritrea: Audio Broadcast with Executive Chairman of Chalice Gold Mines Limited
4. Eritrea: Chalice to Complete African Gold Merger
5. Chalice Gold adds $450000 to Sub-Sahara Gold Project Eritrea