capitaleritrea » Chalice Gold

Koka Gold Project – Feasibility Study Full Summary Report

capitaleritrea — Fri, 13 Aug 2010 14:09:17 +0000

Further to Chalice’s ASX Release of 13 July 2010 of the results of the Feasibility Study for its Koka Gold Project in Eritrea, East Africa, the Company is pleased to provide the full Project Summary from the Feasibility Study for reference by investors and shareholders.

The full Koka Gold Project Feasibility Study Summary is appended to this release and is also available on the Company’s website. The key financial outcomes of the Feasibility Study, which was undertaken by Lycopodium Minerals Limited (“Lycopodium”) with inputs from prominent industry consultants AMC Consultants Pty Ltd (“AMC”) and Knight Piésold Pty Ltd (“KP”), are set out in the announcement of 13 July 2010.

The highlights of that announcement were:

Average life of mine total cash operating costs of US$338 per oz of gold
After?tax NPV5% of US$196 million, life of mine EBITDA of US$589 million and an after tax IRR of 35% at current gold price of ~US$1,200/oz
After?tax NPV5% of US$99 million, life of mine EBITDA of US$381 million and an after tax IRR of 22% at base case gold price of US$900/oz
Average annual gold production of approximately 104,000oz per year with gold production totalling 731,000oz
Forecast mine life of seven years at a mill throughput of 600,000 tonnes per annum, rising to 700,000 tonnes per annum from year 5
Open pit Ore Reserves of 4.63Mt grading 5.1g/t for 760,000oz contained gold with a waste to ore ratio of ~10:1
Estimated start up capital cost of US$122M

As advised in the previous announcement, the Company will now proceed to apply to the Eritrean Government for a Mining Licence in respect of the Koka Deposit. In parallel with this application, the Compan will assess its various funding options for development of the Koka Project.

The full Feasibility Study was recently presented to the Eritrean Ministry of Energy & Mines as the first step in the Company’s application for a Mining Licence for the Koka Gold Deposit. Lycopodium Minerals Limited, AMC Consultants Pty Ltd and Knight Piésold Pty Ltd have consented to the release of the Summary of the Feasibility Study.

Tim Goyder

Executive Chairman

See full report here: Summary Report

Chalice Acquires Full Ownership of Zara Gold Project, Eritrea

capitaleritrea — Tue, 22 Jun 2010 07:30:37 +0000

Zara Project

Dragon Mining Limited announces that Chalice Gold Mines Limited (“Chalice”) has exercised its option to purchase the Company’s 20% interest in the Zara Gold Project, Eritrea. Settlement, which will occur in two days, will result in Dragon Mining receiving $8.0 million in cash and 2 million Chalice shares (current market value of $0.9m) which will be escrowed for 12 months.

In addition, Chalice has the obligation to pay Dragon Mining a further $4.0 million on the delineation of 1 million ounces of gold Reserves at the Zara Gold Project. On 4 June 2010, Chalice announced a maiden gold Reserve at the Zara Gold Project of 760,000 ounces from an Indicated gold Resource of 840,000 ounces.

As at 31 May 2010, Dragon Mining had $21.4 million of cash and gold concentrate receivables compared to $11.8m at 31 March 2010 as reported in the quarterly report. With the receipt of the $8.0 million, the Company will have total cash and receivables of $29.4 million.

The limited obligations of Dragon Mining comprise a working capital facility of 2 million euros ($2.8m) which is repayable in two equal tranches on 30 June 2010 and 31 December 2010. In addition, as a result of on-market purchases by the Company, the outstanding number of convertible notes amount to 9.2 million.

Executive Chairman Peter Cordin stated, “It is pleasing that with the final delivery in August 2009 into the original hedge to finance the Svartliden development, the Company has substantially improved its balance sheet and cash position.

We are well positioned to meet forecasted production of 70,000 ounces of gold for 2010 and continue to generate strong operating margins with the appreciation of the gold price and the weakening of the euro and Swedish krona. The strong cash position will allow the Company to grow and enhance shareholder value.”

The Company is focussed on increasing the Reserves and mine life of its existing gold mines in Sweden and Finland. Feasibility studies for the underground operation at the Svartliden Gold Mine in Sweden and Jokisivu Gold Mine in Finland are nearing completion with commitment to development expected in the third quarter of 2010.

In addition the Company will be able to commit further funding to enhance the value of its exploration properties, particularly at Kuusamo in northern Finland.

Chalice Plans Share Placement to up Stake in Eritrea Gold Project

capitaleritrea — Mon, 24 May 2010 16:38:58 +0000

East Africa-focused Chalice Gold Mines would raise A$9,1-million through a share placement to major shareholder Franklin Resources and other institutional and sophisticated investors.

The company said on Monday that it would place more than 21,6-million shares, at A$0,42 a share.

Around 11,6-million shares would be taken up by Franklin Resources, while a further ten-million shares would be placed with investors. The placement would be made pursuant to the 15% allowance under the ASX-listing rules.

Of the funds raised, A$7,8-million would be used to purchase the remaining 20% interest in the Zara gold project, in Eritrea, from fellow listed Dragon Mining. The balance of the funds raised would be used for working capital purposes.

The Zara gold project has an estimated resource of one-million ounces of gold. The company was currently conducting a feasibility study, with a targeted first production in 2011.

Eritrea is the New Frontier for Mining Companies, Even in Spite Of UN Sanctions

capitaleritrea — Sat, 15 May 2010 11:21:28 +0000

By Charles Wyatt (Minesite) – Not very often we start a mining article with a combined geography/history lesson, but in this case the only way to make sense of the recent moves by a number of mining companies into Eritrea is to understand exactly where the country is, what surrounds it, and what has been going on there.

The region is described loosely as the Horn of Africa but a close look at a map shows that the real Horn juts out south of Djibouti into the Gulf of Aden and largely consists of Somalia, with Ethiopia to its west and north. Djibouti has coast along the Red Sea and Somalia has a massive coastline in the Gulf of Aden as well as the Indian Ocean. That is where the pirates lie in wait for their victims, remember?

Ethiopia, however, has no coastline at all and that is why it has for generations made a pest of itself to Eritrea which cuts it off from the Red Sea, running all the way up from Djibouti to Sudan, with Egypt a bit further to the north.

Before the Second World War Eritrea was an Italian colony, but was taken over by the British in 1941. Once the war was over, in 1952, the United Nations decided to establish it as an autonomous entity federated with Ethiopia as a compromise between Ethiopian claims for sovereignty and Eritrean aspirations for independence. Ten years later the Ethiopians tried to annex it, triggering a war which lasted for more than 30 years. The result was victory for Eritrea which declared independence in 1993, leaving Ethiopia landlocked. The two countries hardly became good neighbours, with the issues of Ethiopian access to the Eritrean ports of Massawa and Assab, and unequal trade terms, souring relations. In 1998 there was another flare-up that lasted a couple of years and again it was Ethiopia trying to get access to the Red Sea.

Since 2000 there has been an uneasy peace, with Eritrea trying to rebuild its economy after a devastating period of war. It sits, however, in a difficult area and every time there were problems in Sudan, Djibouti or Somalia near its border, Eritrea was held responsible by the UN. This culminated in the adoption of a package of sanctions against Eritrea last December.

What has to be seen in the background of all this is the dark art of US diplomacy. The US wanted its favoured candidate Ethiopia to have access to the Red Sea and found Eritrea much too independent for its liking. Eritrea is fighting its corner to get the sanctions lifted.

In the meantime, as Ambassador Tesfamicael Gerahtu pointed out in London yesterday, the country is straining every muscle to become self-dependent in food production and improve education and health services.

Anyone arriving in the capital of Asmara today could easily think the plane had been re-routed to Italy, according to Rupert Baring of gold explorer London Africa. There are wide streets, Italianate architecture and a coffee culture, with plentiful cafes.

The people he describes as proud, independent and honest and he has never seen any sign of the corruption endemic in so many parts of Africa. These are just some of the reasons why mining companies, big and small, are taking a serious look at Eritrea. The biggest reason of all, however, is the fact that the country is unexplored in modern times and underneath Eritrea, as well as under the other countries in the Horn of Africa, lies the Arabian-Nubian Shield which is an exposure of pre-Cambrian rocks on the flanks of the Red Sea. The Shield also crosses over into Jordan, Saudi Arabia, and Yemen. In the north it’s exposed as part of the Sahara Desert and Arabian Desert, and in the south in the Ethiopian Highlands.

The Arabian-Nubian Sheld was the site of some of man’s earliest geologic efforts, principally the Egyptians who extracted gold from the rocks of Egypt and north east Sudan. New gold discoveries have been made in Sudan, Eritrea, and Saudi Arabia. Last week Tim Goyder, executive chairman of the Australian gold explorer Chalice Gold Mines, was passing through London and he laid out a map which showed that his company’s Zara and Koka projects lie on the same pre-Cambrian shield as Centamin’s Sukari gold mine in the Western Desert of Egypt. For reasons of history and politics, the amount of modern gold exploration that has taken place in Egypt – Centamin apart – is modest, but none at all has taken place in Eritrea until recently. Someone has to be the original pioneer, and it appears to be the Canadian company Nevsun in this particular case. Nevsun is bringing its high grade gold, copper and zinc Bisha deposit into production later this year.

Tookie Angus, chairman of Nevsun, confirms that the Bisha project has received continuous support from the Eritrean government, which granted the mining licence in January 2008. Bisha will be the first modern-day mine in the country, with production slated to return over a million ounces of gold, 9.4 million ounces of silver, 734 million pounds of copper and more than one billion pounds of zinc during its life. The really interesting aspect, however, is the deal between Nevsun and the government of Eritrea. Under existing Eritrean mining legislation, the State of Eritrea has an automatic right to a free carried 10 per cent interest, but under an agreement with Nevsun it also has an additional 30 per cent paid participating interest. This 30 per cent contributing interest was agreed upon in October 2007, with a provisional US$25million payment made to Nevsun. The remaining balance to be paid to Nevsun will be determined by an independent valuator, and will be based on the net present value of 30 per cent of the project, as evaluated upon the first shipment of gold from the mine.

Not for Eritrea the black empowerment requirements of South Africa which so often end up with a 26 per cent stake in mining companies being effectively stolen by entities which have no intention of paying their way as partners. The Nevsun deal is straightforward stuff, with the Eritrean government setting out to get a significant stake in a project which should ensure it a satisfactory return. And it goes further than this. The Ministry of Energy and Mines is helping to organise a regional Geo-Conference in Eritrea in September which will showcase the potential for mining. It is especially interesting that Centamin has been invited from Egypt, La Mancha with its Hassai VMS mine, from Sudan, and Citadel which has the Jabel Sayed copper gold deposit, from Saudi Arabia. The whole region underlain by the Arabian-Nubian Shield is being represented, and little Eritrea is taking the lead. And that’s hardly what the UN envisaged when it put in the sanctions at the behest of the US.

There are now getting on for 20 mining companies active in the country. The Chinese are there, the Koreans are there, and now some of the big boys are following the juniors in. The country has a very sensible mining code, modelled on the Australian one. Antofagasta, one of the world’s largest copper producers is in a joint venture with the Canadian company Sunridge Gold on the Adi Rassi copper gold project within its Asmara project, and Anglo American is involved in the Thani–Ashanti Alliance. Newmont is also said to be taking a close look, which is another reason for the UN to reconsider its decision on sanctions. The Amir of Qatar not only owns the Asmara Place Hotel, where Brits and locals alike watch English football in the Green Bar, but is also building a summer home at Massawa overlooking the Red Sea. Eritrea, with a history that has precluded any exploration in modern times, is the new frontier and everyone is taking a look. The reaction from mining companies and fund managers alike has been universally positive, so this is likely to build up into a big story even if it is one that will not hit the headlines in the States.

Chalice Appoints Stephen Quin as Non-Executive Director

capitaleritrea — Mon, 03 May 2010 11:39:11 +0000

Chalice Gold Eritrea

Chalice Gold Mines Limited (ASX: CHN) (“Chalice”) is pleased to announce the appointment of experienced mining executive and mining geologist Mr Stephen Quin P.Geo to the Board as a Non-executive Director, effective immediately.

Mr Quin is currently President and Chief Operating Officer of TSX listed copper producer Capstone Mining Corp. and has over 30 years experience in the mining and exploration industry. Mr Quin was previously President and CEO of Sherwood Copper Corp, prior to its merger with Capstone, which he co-founded and was responsible for the feasibility, permitting, financing and on time and on budget start up of the Minto copper-gold-silver mine in the Yukon, Canada.

Prior to joining Sherwood, Mr Quin was Executive Vice President of Miramar Mining Corp. a TSX listed gold producer and explorer, where he was responsible for the acquisition and subsequent exploration of the world class Hope Bay Gold Project in Nunavut, Canada. Miramar was subsequently acquired by Newmont.

Based in Vancouver, Canada, Mr Quin will use his extensive experience in the Canadian markets and resources sector to assist the Company as it seeks to list on the TSX and advance its flagship Zara Gold Project in Eritrea through to production after the release of the Definitive Feasibility Study, expected mid-2010.

“We are delighted to have secured someone of Stephen’s calibre” said Tim Goyder, Chalice Chairman. “Stephen’s development and operating experience will be invaluable as Chalice evolves from an exploration company to gold producer.” Subject to shareholder approval, Mr Quin will be issued 750,000 share options expiring 30 April 2014 as follows:

187,500 options with an exercise price of A$0.55, vesting on issue.

187,500 options with an exercise price of A$0.65, vesting on 30 April 2011

187,500 options with an exercise price of A$0.75, vesting on 30 April 2012

187,500 options with an exercise price of A$0.75, vesting on 30 April 2013.

RICHARD HACKER

Company Secretary

Chalice Targets July Completion for Eritrea Feasibility Study

capitaleritrea — Fri, 23 Apr 2010 09:32:13 +0000

PERTH (miningweekly.com) – Gold explorer Chalice Gold Mines expects to complete the feasibility study for its Koka project, in Eritrea, by July, the company reported on Friday.

In its quarterly results for the three months ended March 31, ASX-listed Chalice noted that field work for the environmental and socio-economic studies have been largely competed, and reporting was well advanced.

The completion of infill drilling at the Koka main site has confirmed the high-grade nature of the ore body, Chalice said, adding that these results would form part of a revised resource estimate, would be completed in the June quarter.

As part of its strategy to advance the Koka deposit to production, Chalice would apply for a listing on the TSX.

Chalice believed that a dual listing on the TSX would further raise the profile and states of the company, within the global investment community.

“A dual listing on the TSX should provide increased liquidity to the company’s current and future shareholders. In addition, it will provide increased access to the larger North American and European capital markets, as the company advances its Zara project through to production.”

It is anticipated that an application for the TSX listing would be made during the June quarter, with a view of listing shortly thereafter.

The Koka gold project has an estimated total mineral reserve of 5,04-million tons, at 5,8 g/t gold, for a contained mineral reserve of 944 000 oz. While the feasibility study was aimed for completion by July this year, Chalice was hoping to start gold production during 2011.

Koka Resource Upgrade Imminent After More High-Grade Results in Eritrea

capitaleritrea — Wed, 31 Mar 2010 07:07:47 +0000

Chalice Gold Eritrea

Chalice Gold Mines Limited (ASX: CHN) is pleased to advise that a resource upgrade at the Koka deposit at its Zara Gold Project in Eritrea is imminent following the receipt of more high-grade infill drilling results.

The new results, which are the last from the infill drilling program at Koka, come from diamond drill holes ZARD 143 and ZARD145 to 157 from within the Koka Main Zone.

Assays have now been received from all 30 holes of a ~5,000 metre infill diamond drilling programme designed to bring further confidence to the high grade mineralisation of the Koka Main Zone and to be used as part of the final resource estimate for the Koka Bankable Feasibility Study.

All data is now undergoing validation as part of the revised resource estimate, which will be released during the next quarter (Figure 2).

Two diamond drill rigs are now drilling on double shift at the Koka East Zone, which lies 80-100 metres into the hanging wall of Koka Main Zone, with results pending from the seven holes completed to date. Site preparation for drilling of the Koka South Zone is in progress with drilling expected to commence there shortly.

Koka Main is the flagship gold deposit at Chalice’s 80 per cent-owned Zara Project, which has a JORC compliant Indicated and Inferred resources of 944,000 ounces.

Significant intersections include:

• 7 metres grading 18.71 grams of gold per tonne in ZARD143;

• 5 metres grading 40.28 grams of gold per tonne in ZARD146;

• 23 metres grading 5.58 grams of gold per tonne in ZARD147B;

• 21 metres grading 9.30 grams of gold per tonne in ZARD147B;

• 16 metres grading 11.07 grams of gold per tonne in ZARD149, and;

• 9 metres grading 6.28 grams gold per tonne in ZARD153B.

A complete tabulation of significant results is provided in Table 1.

About the Zara Gold Project

Chalice holds an 80% interest in the project and has an option to acquire the remaining 20% held by Dragon Mining (ASX: DRA). At a decision to mine the Government of Eritrea has a statutory right to a 10% free carried interest and a further right, at its election, to purchase a further 30% based on an independently assessed NPV.

The Koka Gold Deposit within the Zara Joint Venture contains an estimated resource of 5 million tonnes of ore containing 944,000ozs gold, grading 5.8 grams of gold per tonne. Metallurgical test work indicates overall recoveries exceeding 95% with ~60% recovered by gravity.

DR DOUG JONES

Managing Director

31 March 2010

Competent Persons’ Statement

The information in this report that relates to Exploration Results is based on information compiled by Dr Doug Jones, a full-time employee and Director of Chalice Gold Mines Limited, who is a Member of the Australasian Institute of Mining and Metallurgy and is a Chartered Professional Geologist. Dr Jones has sufficient experience in the field of activity being reported to qualify as a Competent Person as defined in the 2004 edition of the Australasian Code for Reporting of Exploration Results, Minerals Resources and Ore Reserves, and consents to the release of information in the form and context in which it appears here. The Independent Resource Estimate for the Koka deposit was prepared by Mr Brian Wolfe, whilst employed as a Specialist Resource Geologist for Coffey Mining Pty Ltd. Mr Wolfe, who is a Member of the Australasian Institute of Mining and Metallurgy, has sufficient experience in the field of Resource Estimation to qualify as a Competent Person as defined in the 2004 edition of the Australasian Code for Reporting of Exploration Results, Minerals Resources and Ore Reserves, and consents to the release of information in the form and context in which it appears here.

For more information please see document: Results

Eritrea: Chalice Buys Stake in London Africa Limited

capitaleritrea — Tue, 29 Dec 2009 10:36:31 +0000

London Africa Ltd.

Chalice Gold Mines Limited (ASX:CHN) has agreed to invest in the United Kingdom based London Africa Limited (”London Africa”) which holds a number of prospecting licences in Eritrea.

London Africa Limited is a private company registered in England and Wales, originally set up in 2006 to acquire precious and base metal projects in Africa.

Chalice will subscribe for 1.6M shares in London Africa at 12.5p per share for GBP200,000 (A$358,000) which will give Chalice an 11.8% interest in the Company. The funds will be applied to a work program currently being undertaken and managed by London Africa.

London Africa Limited signed in June 2009 a prospecting licence to cover 1562 km² around Akordat – Orota in central Eritrea.

The company says it is the first business in 4 years to sign a new Prospecting Licence in Eritrea. The agreement was signed back in June with the new Eritrean Minister of Mines, Mr Ahmed Haj Ali.

The company’s Web site states that numerous gold-bearing quartz veins systems as well as as alterations zones characteristic of volcanogenic massive sulphide (VMS) mineralisation have been identified after just two field visits to the southern part of the licence area.

Additional Landsat and Aster image anomalies remain to be visited (field checked) and the company is confident that it will have a series of quality gold and VMS targets to evaluate going forward.

London Africa is aiming to explore and find similar volcanic massive sulphide deposits like those of Nevsun Resources’ Bisha deposit. The four prospects of London Africa are Akordat VMS Prospect, Melih VMS Prospect, Enjehay Kereb Gold Prospect, Adinjera Gold Prospect.

London Africa Limited in Eritrea

Chalice Gold Mines: First Assays From Koka Drilling

capitaleritrea — Tue, 22 Dec 2009 10:04:06 +0000

Zara Project

Chalice Gold Mines Limited (ASX: CHN) is pleased to advise that the first results from the latest round of infill drilling at its Koka Gold Deposit in Eritrea have highlighted the continuity and high grade nature of the ore body.

The results from diamond drill hole ZARD 128 intersected the Koka Main Zone between 44 and 75 metres down-hole, with 31 metres of quartz stockwork mineralisation grading 6.48 grams of gold per tonne. This included intervals of up to 2 metres grading 38.2 grams of gold per tonne (Table 1).

Additional narrow intervals of high grade mineralisation were also intersected in the hanging wall, with up to 1 metre grading 100.5 grading grams of gold per tonne encountered.

These assays are the first from a planned thirty one (31) diamond drill hole infill programme, designed to bring further confidence to the high grade mineralisation of the Koka Main Zone and to be used as part of the final resource estimation for the Koka Bankable Feasibility Study.

Koka, which is the flagship deposit at Chalice’s 80 per cent-owned Zara Project, has JORC resources of 944,000 ounces. A total of 13 diamond drill holes have now been completed and further assay results will be released to the market as they become available (Figure 2).

Chalice Managing Director Doug Jones said: “The results from this first hole have further demonstrated the overall continuity of the Koka ore body and we expect additional good results over the coming weeks as the programme advances and we start to receive a steady flow of assays”.

The current resource estimate of 944,000oz @ 5.8g/t is based on a 40 metre x 20 metre drill pattern and the current programme will infill most of the Koka Main Zone to 20 metres x 20 metres.

The deposit extends over 570 metres along strike and the resource remains open both along strike to the south and at depth.

Following completion of this infill drilling program the drill rigs will focus on exploration of nearby targets, particularly the Koka South and KokaEast zones.

Note: The metres quoted are down hole metres and gold grades are uncut with up to 2 metres of internal dilution (<0.25g/t gold). All samples are prepared at the Africa Horn Laboratory in Asmara, Eritrea and then analysed by Genalysis Laboratories in Perth, Western Australia.

About the Zara Gold Project

The Zara Joint Venture comprises four Exploration Licenses and two Prospecting Licenses covering an area of 615km2 situated in northern Eritrea, approximately 160km northwest of Asmara city (Figure 1). Chalice holds an 80% interest in the project with the remaining 20% held by Dragon Mining (ASX: DRA). The Koka Gold Deposit within the project contains an estimated resource of 5 million tonnes of ore containing 944,000ozs gold , grading 5.8grams of gold per tonne. Metallurgical test work indicates +95% recovery with ~60% recovered by gravity.

DR DOUG JONES

Managing Director

22 December 2009

Chalice Gold First Assays Koka Drilling (PDF)

Chalice Gold: Consultancy Group Predicts Target Price of $0.73

capitaleritrea — Mon, 30 Nov 2009 09:51:46 +0000

Chalice Gold Mines (CHN.AX) released a research report completed by Australian independent stockbroker and financial advisory group Southern Cross Equities. The report states that Chalice is an early participant in the development of a gold industry in Eritrea, where it has highly attractive exploration ground and an advanced prospect in Koka’s 1.0moz resource.

Southern Cross Equities believes that the completion of feasibility by mid 2010 and exploration activity will maintain a great deal of interest in the stock. Thus it recommends a speculative buy at the current price of $0.57 predicting a target price of $0.73 in 12 month.

Southern Cross Equities Report on Chalice Gold Mines

Chalice Gold Market Capitalisation 10 Times Greater Than Last Year

capitaleritrea — Mon, 16 Nov 2009 10:36:28 +0000

Koka Gold Deposit

Tim Goyder has told Chalice’s shareholders that the market capitalisation of Chalice Gold Mines is close to $70 million which is 10 times greater than the $6.5 million recorded last year.

Speaking at the Chalice Gold Mines Limited (ASX:CHN) Annual General Meeting, the chairman laid out recent achievements, future plans and strategies of the company. He further welcomed former Sub- Sahara shareholders and expressed his gratitude for their support of the successful merger between Chalice Gold Mines and Sub- Sahara Resources earlier this year.

Following Sub- Sahara’s former 69% ownership of the Zara Project in Eritrea as well as recently done transaction, Chalice now owns 80% of the project, together with a large tenement position of 615 square miles.

The company has recently released details of an independent Scoping Study on the project, undertaken by Lycopodium Minerals, a Perth-based engineering company. The study found the Koka Gold Deposit was financially robust at a gold price of US$800 per oz. Production is forecasted to be in the vicinity of 110,000 oz per year for a minimum of 6 years, with a cash cost of US$424 per oz. Capital expenditure will be approximately US$98 million.

Tim Goyder told shareholders that the potential to extend the resource base through further exploration is considered to be outstanding. According to the chairman geological interpretation of the area suggest that there is considerable opportunity to locate additional ore bodies in similar geological settings along strike and parallel to the Koka Gold Deposit, and that is planned that once the resource drilling has been completed the diamond rigs will be deployed following up these near-mine targets to test their potentials.

In addition to the work on the Feasibility Study on the Koka Gold Deposit in Eritrea, the company will also look out for further regional exploration opportunities within the tenement area of 615 square kilometres. The area holds a great potential for the discovery of additional gold and base metal deposits.

For the immediate future Chalice Gold Mines plans a three-pronged strategy for its operation in Eritrea.

First, the completion of the Feasibility Study by mid- 2010, which includes in-fill diamond drilling with two rigs on double shift, and the exploration of existing targets at depth and along strike from the Koka Deposit.

The second pillar of the strategy is to commence drilling gold and VMS targets with a recently acquire man-portable rig. This rig is expected to be in operation by late December. Any success from this drilling will then be followed up by the larger rigs currently deployed in drilling out those targets.

The third arm of the strategy is to ground-truth some of the 60 Landsat anomalies already defined by mapping, sampling and then drilling.

Chalice Gold Mines Limited is planning to start production at the Koka Gold Deposit in Eritrea in late 2011.

African Gold Developers and Producers are Benefiting from Increased Investor Interest

capitaleritrea — Sat, 24 Oct 2009 14:58:47 +0000

Moto Goldmines disappeared from stock market listings this week, following its friendly takeover by a joint venture involving AngloGold Ashanti and Randgold Resources, the target being more than 20m ounces of gold that have been outlined at the Moto project in the far north east Democratic Republic of the Congo.

The transaction has further intensified investor interest in listed gold stocks active on the continent as a whole; at least 80 names can be identified.

A good number of these stocks currently rank as the world’s most in-demand gold stocks, as indicated by the table that follows this article.

While gold mining in South Africa has been very much a formal activity for well over a century, various kinds of gold mining activity have for many centuries characterised gold belts located in parts of Africa. New “discoveries” are indeed rediscoveries; relative to the gold belts available, very little modern exploration has taken place. In the DRC, as an instance, the semi-continuous Kilo Moto greenstone belt is currently under exploration by Moto Goldmines, AngloGold Ashanti (separately, to the south) and Mwana Africa.

London-listed Mwana recently announced an initial resource of 452,000 ounces of gold outlined on the Zani-Kodo trend within the Kilo Moto gold district. The general Kilo Moto location is remote, and the new Moto JV partners will be budgeting good amounts of money for basic infrastructure, and rehabilitation of one or more of a number of run-down hydropower facilities.

History shows, however, that these are old hats, albeit good ones.

The semi-continuous Kilo Moto greenstone belt was exploited primarily in the 1950s and 1960s by Belgian charter companies, producing more than 3m ounces of a total recorded 11m ounces of gold production from hard-rock mines in the Kilo Moto belt.

The mining was mainly focused on surface operations, a mixture of alluvials and shallow oxide pits.

The concessions are like small countries. To the south of Zani-Kodo lies what’s currently known as Mongbwalu, where the 10,000 km2 kilometer concession 40 (AngloGold Ashanti, 86.22% and OKIMO (a DRC parastatal), 13.78%) is being extensively explored by AngloGold Ashanti. Mwana Africa, in a 80:20 JV formed with OKIMO, holds gold mining rights over 1,610 km2 in Orientale Province.

The Moto Goldmines project, 570km north east of the city of Kisangani and 150km west of the Ugandan border town of Arua, covers an aggregate lease area of some 1,841 km2. Activities to date have primarily focused on just 35 km2 surrounding the old Durba gold mine, where a monumental resource of 25.7m ounces of gold has been outlined.

Some considerable distance to the south, Banro holds gold concessions in the Kivu provinces, stretching west of Lake Kivu. Mine build at Twangiza, nearest deposit to Bukavu, is underway. Annual production from the first phase plant is anticipated at between 80,000 and 110,000 ounces of gold a year. London-based Mark Smith of GMP Securities Europe fancies the Banro story: “We have tracked the evolution of Banro in terms of the development of the gold projects and the share price performance.

“The share price chart appears to have mirrored the classic ‘resource value curve’, from exploration discovery through to resource expansion and project development. We believe Banro is entering the fourth phase in the mining project life cycle, given recent development land marks.

“First, in June 2009 Banro raised C$100m to commence the development of the Twangiza oxide gold project. Second, in August 2009 Banro purchased a refurbished 1.0m tons a year CIP plant from Australia and plans to expand the plant to 1.3Mtpa.Third, in August 2009 the DRC government ratified Banro’s four mining licences and agreed on the fiscal terms for the 25 year exploitation permits. Four, in September 2009 Banro appointed Standard Chartered as the debt advisor to raise the project debt for Twangiza”.

In its initial phase, Banro is to opt for diesel rather than hydroelectric power; capital expenditure is anticipated at around US$145m. Further phases, and capital outlays, could see output at the multi million ounce Twangiza property increase to 300,000 ounces a year. There is gold all over the place: there is evidence of considerable artisanal activity on parts of Banro’s considerable concessions.

With at least 80 listed gold stocks active in African gold, there is lots of competition to attract investor interest. Some of these stocks are out of the top draw, such as Barrick, the world’s biggest gold miner by output and market value. There are other Tier I global gold miners with operations on the continent, in the form of AngloGold Ashanti, as mentioned, Gold Fields, Harmony, and Newmont, which has concentrated on West Africa, just as Barrick has on East Africa.

Further down the pecking order, there are a dozen or so African gold stocks that attract what may loosely be described as interest from professional investment analysts. For more detailed information on this article please visit Proactiveinvestors