Sidney, Australia: Few days ago Nevsun Recourses published its Annual Result 2008 and confirmed that it is making progress in its gold mining efforts in Eritrea. Within days two other mining companies, namely Sub Sahara Resources and Chalice Gold Mines Ltd announced to merge in order to raise funds for Sub Sahara’s gold mining project in Eritrea.
Both companies are listed on the Australian Stock Market and aim to invest in the Zara Project, which is a joint venture between the Government of Eritrea (31% stake) and Sub Sahara Resources (69% stake). Chalice Ltd is believed to have substantial cash resources of over 10 million Australian Dollars, which Sub Sahara requires in order to finance its Zara Gold Project in Eritrea.
Currently, there are six major international mining enterprises in joint ventures with the Eritrean Government. Four of them are Donia Resources & Co of China, Nevsun Resources and Sunridge Gold of Canada, Sub Sahara Resources of Australia.
The merger of both Sub Sahara and Chalice is subject to approval by the shareholders of Sub Sahara Resources. The move is especially important in the current economical situation, with banks not willing or able to provide substantial cash due to the financial crisis.
According to Reuters the President of Eritrea has reshuffled the cabinet ministers for energy and environment in a move to address the increasing interest of foreign investors in Eritrea’s mineral resources.
So far the western region of Eritrea has been promising in the exploration of gold with more than 2 million ounces of gold recovered until now.