Port Massawa Eritrea

By Berhane Woldu

Eritrea’s Strategic Location along the Red Sea provides ideal exposure to one of the world’s busiest shipping lines and established linkages to other areas of the region and beyond.

The port of Massawa is a transit point for goods to the Middle East, European and Asian Markets. The development of the port is poised to bring about potential gains to trade.

The establishment of a Free Port Zone at Massawa is further expected to boost trade prospects within the already established Middle Eastern and African Markets. The Massawa Airport is equally capable of facilitating traded goods in transit to regional and global destinations.

Investment in exploration activities for reserves of oil, natural gas, and otherminerals provide a potential source for the expansion of export receipts. Eritrea’s natural mineral resources include gold, copper, potash, zinc, oil, natural gas, cement, gypsum, granite, marble, ceramics, limestone and iron ore.

The Bisha Mining Company, which is a mining conglomerate between the government and a Canadian company (NEVESUN), has started production in early 2010. The company produced more than 390,000 oz of gold during the first year of operation and expected to produce more than 450,000 oz in the second year. Copper production will begin in the second year and peak at 184-million pounds of copper in the fifth year of operation. The mine will begin producing zinc in its sixth year. There are many more mining contracts on the making. The potash mine in Danakil Depression with a planed output of up to 10,000 ton a day life span of over 150 years, the Zara and Dubrba gold mining Eritrea stands to share in hundreds of billions of dollars in mining profits.

PRIVATE SECTORE DEVELOPMENT

The private sector is seen as the major development partner, an engine of growth that will help jump start the economy and eventually lead to long-term growth in the Governments development agenda- as explicitly indicated in the Macro Policy document (1994). The Government has achieved so much at adopting favorable monetary and fiscal policy, reduced regulatory framework and bottlenecks by offering incentives and avoiding trade and other related barriers to attract private sector investment and to expand exports.

In line with the macro-policy objectives, a revised investment code was issued in 1994. The main objective of the investment code is to promote investment in Eritrea as well as develop and use the country’s natural resources. Within this broader objective, the investment code intends to achieve objectives including, the promotion of exports, encouragement of competitive import substitution industries, enhancing transfer of new technology, securing equitable regional growth, development of small-and medium-scale enterprises, and expansion of employment opportunities (GOE, 1994: 5).

The Eritrean investment code also provides various incentives for domestic and foreign investment. The investment code further outlines that there will be no taxes on declared dividends; any corporate profit that is set aside for reinvestment will be taxed at the rate of 20%. Furthermore, there shall be no exchange controls for remitting dividends and capital gains, and foreign investors are free to repatriate their profits.

The investment code provides various benefits to investors. For instance, profit and dividends of investors, payments for a foreign loan, fees, royalties, or proceeds received from liquidation of investment and/or expansion, and payment received from the sale of transfer of shares will be remitted in accordance with the rate of exchange prevailing at that time. There is no minimum threshold value of investment. Moreover, with the exception of domestic retail and whole sale trade, import, and commission agency that requires bilateral agreements of reciprocity with the country of investor, all areas of investment are open to all investors both foreign and domestic (GOE, 1994:6). Foreign capital may establish any enterprise on its own or in partnership with local capital.

Moreover, the investment code guarantee, that capital and other associated foreign-owned assets will not be nationalized without due laws. To this effect, Eritrea has also signed the convention establishing Multilateral Investment Guarantee Agency (MIGA) and the convention on the Settlement of Investment Disputes between States and Nationals of other States(GOE, 1998: 20). It established, The Investment Center, which is the legal body responsible for the promotion of investment. Issuance of certification to investors with a maximum delay of 10 days (GOE, 1994:15), Land Proclamation that provides usufruct rights for the long-term up to 99 years has been issued since 1994 and is expected to facilitate the allocation of land for investors (GOE, 1994; IMF, 1996:9).

Significant progress has been made since independence regarding the liberalization of trade policy.

The 1994 Legal Notice 18/1994 reduced the number of import tariffs to twelve. Capital goods, raw materials, and semi-processed goods have only a2 % tariff. Basic goods duties range from 3 to 20%.

In addition, customs procedures were simplified. In the mid-1990s, the government began major investments in infrastructure, roads, electricity, dams, and port operations to support the further development of exports.

To expand the market for import and export potentials the country entered into active membership in regional organizations such as IGAD and COMESA.

INVESTMENT ENVIRONMENT

Peace and security are the main pillars of a true and conducive investment environment in Eritrea. The economic policy underlines the necessity to have a market lead economic system. The private sector should have the upper hand in all economic sectors with the government to intervene in major public shares. The following are some of the steps taken for a better investment environment:

• The Eritrean Investment Center was created in 1998 to promote the country as an attractive investment destination. The investment center approves investment projects, and aims to promote and facilitate investment activities in Eritrea.
• The Business Licensing Office (BLO) was established to create a centralized, “One-Stop”, licensing center to facilitate the speedy formation of business ventures as well as the issuance and renewal of licenses.
• Key investment opportunities in the fisheries sub-sector provide a potential of 90,000 sq.km of fishing ground, with an estimated annual production potential of 65,000-70,000 tons of fish and other marine produces.
• The manufacturing sector produces a variety of products with particular emphasis on processed food and dairy products, alcoholic beverages, glass, leather goods, marble, textiles and salt.
• Recent developments in the mining and quarrying sectors.
• Investment opportunities in the service sector include tourism, transport, energy and water resources, communication and financial services.
• Offshore oil and natural gas exploration are specific areas of potential investment in the energy sub-sector.

INVESTMENT INCENTIVES IN ERITREA

The investment policy of Eritrea provides the following incentives to foreign and domestic companies.

• Both local and foreign private sector investors are allowed to participate in all sectors of the economy with no restriction and discrimination
• Priority foreign exchange allocation given to exporters
• Up to 100% retention of foreign currency earning
• No taxes on dividends declared
• Capital goods, intermediates, industrial spare parts and raw materials are subject to nominal customs duty of 2%
• Raw materials and intermediate inputs are subject to 3% sales tax; however, all sales taxwill be rebated on all materials and inputs that have been used for export production
• Exports are exempted from export duties and sales taxes
• Any loss incurred during the first two years of operation by an investor may be carried forward for three consecutive years
• Marginal tax rate on personal income from 2%-38%: on non-corporate profit from 2%-38%; on corporate profit from 25%-35%; on commercial agriculture from 2%-320%; and on rent income from 1%-48%
• Profit derived from mining activities will be taxed as per the mining legislation; and
• Corporate profit that is set aside from reinvestment taxed at the rate of 20%.

/CE

Nevsun Resources Eritrea

Mallory Stone reports that the Financial News Network (FFN) looked at the Gold industry and measured relative performance to find the top stocks. Relative outperformance is a bullish sign of underlying fundamental and technical strength. FFN looked at thursday’s price action of all companies in this peer group.

Nevsun Resources (AMEX:NSU) ranks first with a gain of 9.07%; Royal Gold (NASDAQ:RGLD) ranks second with a gain of 6.77%; and Yamana Gold (NYSE:AUY) ranks third with a gain of 5.65%.

AngloGold Ashanti (NYSE:AU) follows with a gain of 4.56% and Randgold Resources (NASDAQ:GOLD) rounds out the top five with a gain of 4.41%.

Nevsun Resources Ltd. is a gold producer and base metal developer. The Company has a gold-copper-zinc mine in Eritrea.

Chalice Gold Mines Limited (ASX:CHN; TSX: CXN) provides the opportunity to view a video broadcast with Dr Douglas Jones, Managing Director, of his presentation titled “Developing a High Grade Gold Mine in Eritrea”.

To view , click on the following link:

Chalice Gold Video

Chalice Gold Mines

Minesite, By Alastair Ford - “We’ve done a lot in the last year or so”, says Doug Jones, managing director of Australian-listed Chalice Gold Mines, which is one of the trailblazers in the new mining district of Eritrea. The company is working up the Zara gold project in the centre of the country, a few hundred kilometres north of the famous Bisha mine, which has just been brought into production by Nevsun. And Chalice has been developing Zara at a fair old lick, as Doug is keen to point out.

“In August of 2009 we’d just completed the merger with Sub-Sahara. Then we cleaned it up to get a 100 per cent interest in the project, subject to the government’s option to purchase 30 per cent. Then we got the drilling done, produced a maiden reserve, got all the water drilling and environmental studies done, and then completed a feasibility study in July. We got through a TSX listing and did a couple of capital raisings.”

At times it’s been hard to keep up, such has been the whirlwind of activity produced by the company. But then the Chalice boys are like that. On their frequent visits to London they barely have time to touch the ground and raise a beer glass to their lips before they’re off to their next meeting with existing, or potential investors.

In any case, those same investors must be well satisfied at the moment with progress on Zara. The results of the feasibility study were released in August and showed that at the Koka deposit, the company has a project capable of producing 100,000 ounces per year over a seven year mine life, based on the current resource of 840,000 ounces. The study used a US$900 gold price, and assumed cash costs of US$338 per ounce from a basic open pit. So far so good, and perhaps not surprising that the company’s shares have doubled in the last 12 months or so to the current A$0.70 from a 52-week low of A$032 hit early in 2010. But now’s the time to be moving established gold ounces towards production, especially with costs likely to be so low, and given the complexities and uncertainties in the Australian tax system, it’s perhaps not surprising that local Aussie investors have in recent months favoured African developers over their local home-grown types.

That’s a big turnaround, but it hasn’t done Chalice any harm. Indeed it’s allowed the company to build up enough momentum to get the shares listed on the Toronto exchange too, a development which was ongoing in the final quarter of last year, and which was finally completed in the latter part of November, just in time for the big Mines & Money conference in London, at which Chalice’s had a particularly high profile.

The interest stems not only from the track record of success that’s now building up, but also from the possibilities on the ground at Koka, and at Zara, that still remain. There’s never been much doubt in Doug’s mind, nor indeed that of Chalice’s chairman Tim Goyder, that resources at Koka will go over the million ounce mark in due course. Doug talks of “big exploration upside” without hesitation, and adds that in addition to its existing ground Chalice will pick up further acreage before too long.

It will be helped along the way by a government that is enthusiastic, to say the least, about the potential of Zara and Koka. The government now looks likely to exercise its option to buy into Koka, although at what price remains to be seen. Negotiations are likely to be tough, but Doug is quite clear. “The government want to see this go forward”, he says. “The biggest question is how much they’re going to pay, and when they’re going to pay it”. But both sides have already agreed that if a deal can’t be thrashed out then the matter will be settled by independent arbitration. Whatever happens, with the government on board, the political risk will be much reduced, in what is still seen as a volatile area.

After that it’ll be a question of completing the permitting process, and raising the necessary funding to get Koka into production. Initial costs have been put at around US$122 million, and all options are still on the table. Some nice drilling results from the ongoing programme at Zara would certainly help build up a bit of a tail wind as far as that fundraising is concerned. But first, the negotiators will have to come to an agreement as to the precise terms on which the government will be allowed to participate. It should be an interesting year.

[wikichart align="right" ticker="AMEX:NSU" showannotations="true" livequote="true" startdate="25-12-2010" enddate="25-06-2011" width="300" height="245"]

Peter Grandich the founder of Grandich.com and Grandich Publications, LCC and editor of the The Grandich Letter which was first published in 1984 explains in the Prospector Magazin if Sunridge is to follow in the footsteps of Nevsun.

The mining industry is apparently focusing hard on Eritrea again and Sunridge Gold is now positioned to be the next company to push towards production.

Sunridge’s peer company, Nevsun Resources is currently building the first modern mine in Eritrea and is nearing completion of the Bisha gold-copper-zinc VMS project. The mine construction is on schedule and the first gold pour is now expected before the end of 2010. Nevsun’s market cap is now approximately $1.17 billion.

Also, further attention was brought to the region recently by the announced Citadel takeover by Equinox for $1.25 billion. The Valuation was primarily based on the Jabal Sayis Mine in Saudi Arabia, which compares very similar in terms of production numbers to that of Sunridge’s Emba Derho deposit. Although Jabel Sayis is further along in development, the price tag further demonstrates the potential upside in Sunridge’s value.

Sunridge compares favorably to both Nevsun’s valuation and the Citadel deal as Sunridge has larger resources and the current market valuation is still only $160 million. Sunridge has recently raised $26 million and now has over $30 million to take its projects through feasibility.

Sunridge has successfully been exploring for gold and base metals on the Asmara Project in Eritrea since 2003 and has now defined three VMS deposits. Debarwa, Emba Derho, and Adi Nefas Deposits which contain an impressive combined NI 43-101 compliant Indicated Resources of:

• 1.28 billion pounds (580,000 tonnes) of copper,
• 2.5 billion pounds (1,130,000 tonnes) of zinc,
• 1.05 million ounces of gold, and
• 31.8 million ounces of silver

The Asmara Project also hosts a fourth prospect known as Gupo which contains an Inferred Resource of 189,000 ounces of gold.

The Asmara Project is approximately 800 square kilometers and is located around the capital city of Asmara. The project is located on excellent infrastructure, with paved roads and grid power over the property and the Port of Massawa is 120km away and accessible by both road and rail.

The Debarwa Deposit is located approximated 25 km south of Asmara and is currently the focus of a Feasibility Study which is expected to be complete in Q3 of 2011. Sunridge has awarded the engineering contract for the feasibility study to Senet who is a logical choice as they are currently managing the building of Nevsun’s Bisha mine in Western Eritrea.

Debarwa is made up of an oxide gold “cap” consisting of an estimated 2.44 million tonnes at an average grade of 1.71 g/t gold. Below the oxide zone the deposit contains a copper enriched supergene zone consisting of an estimated 1.336 million tonnes at an average grade of 5.36% copper with gold and silver. Underlying the supergene zone is the primary mineralized zone which is open in depth with current estimates of 699,000 tonnes at an average grade of 2.53% copper, 3.23% zinc and 0.87 g/t gold.

Debarwa DSO Zone: A high grade copper zone (greater than 15% copper) has been identified within the supergene zone. The feasibility study will examine options to begin mining operations at Debarwa by selectively mining the DSO (Direct Shipping Option) to a smelter thereby producing cash flow early in the mine life during construction of a process plant facility.

The Northern Deposits consist of the large Emba Derho copper – gold – zinc VMS deposit and 2 satellite deposits – Adi Nefas and Gupo Gold. The Northern Deposits are located approximately 15 km north of Asmara and are all within 6 km of each other.

A positive scoping study was completed in June 2009 at the Emba Derho deposit which contains a NI 43-101 compliant Indicated Resource of 62.5 million tonnes, containing 996 million pounds of copper, 1,907 million pounds of zinc and 574,000 ounces of gold and 20 million ounces of silver.

The Scoping Study provided a base case analysis and yielded an NPV of US$323.8.9 million and an Internal Rate of Return of 27.7% when applying the two year moving average of metal prices prior to June 2009.

Sunridge management feels the Scoping study at Emba Derho is far from optimized and the will be demonstrated in prefeasibility studies, which are expected to begin before the end of 2010, will include Adi Nefas, and Gupo Gold.

Adi Nefas has an Indicated Resource of 2.73 million tonnes at 1.39% copper, 8.38% zinc, 2.85 g/t gold, and 99.3 g/t silver. The feasibility study will also include the gold oxide cap at Emba Derrho which contains 95,000 oz of gold at 0.84 g/t which was treated as waste in the scoping study.

The feasibility study will also examine a steeper pit slope and the use of a dense media separation (DMS) circuit to remove 20% of internal waste material that would otherwise would be sent through the plant as ore.

Exploration: Sunridge is about to begin a drill program at the Gupo Gold deposit and the Medrizien gold target. Gupo currently has an inferred resource containing 189,000 oz of gold averaging 2.99 g/t and the objective of the program is to expand and convert to an indicated category resource. The Medrizien target is within 1 km from Emba Derho and consists of a gold mineralized zone that has been mapped at surface up to 25 meters in width and several km along strike.

Sunridge management also expects to announce expansion drilling at Adi Nefas and Debarwa and is planning extensive drill programs on new high priority VMS targets in 2011.

Sunridge also has a VMS exploration project in Madagascar called Besakoa which has demonstrated strong geological similarities to the VMS deposits on the Asmara Project and the Bisha deposit. An initial exploration drill program is being planned for spring 2011.

I think it’s time to start calling Sunridge Gold the next possible Nevsun.

http://www.theprospectornews.com/weekly_1115_02.php

NAIROBI, Kenya (AP) — Britain’s overseas investment arm plans to invest about $300 million a year in coming years in African companies because the continent is registering high economic growth rates and it has become easier to do business in Africa.

The $300 million figure, some of which will be directed toward infrastructure and consumer goods companies, represents about 50 percent of CDC Group PLC’s new investment portfolio in the coming years, chief executive Richard Laing told The Associated Press late Tuesday.

“What we are seeing in these economies is for the first time many individuals have discretionary (spending money) available and they are looking for ways to spend that money. They want to have good value in goods and services,” said Laing, explaining the group’s motivation in putting more money into African consumer goods companies.

“I think Africa compares extremely well with Asia,” Laing said, referring to the rate of return on private investments. He said that the CDC Group has had an average return of 16 percent a year on its investments in sub-Saharan Africa.

CDC Group PLC is owned by Britain’s Department for International Development and has been investing in the private sector of emerging economies for more than 60 years.

Laing said it has become easier to do business in sub-Saharan Africa compared with 10 to 20 years ago. The World Bank said earlier this month that 10 sub-Saharan African countries were among the world’s top most-improved economies for doing business over the past five years.

Last month, the International Monetary Fund said the region is recovering fast from the global financial crisis and it will register the second-highest growth rates in the world, behind Asia.

The Washington-based institution said in its 2010 economic outlook that sub-Saharan Africa’s economic growth will be 5 percent this year, compared to 2.5 percent in 2009. But the region has not recovered fully from the crisis, IMF officials warned.

They, however, said that next year’s economic growth for sub-Saharan Africa’s is projected to be 5.5 percent, bringing it closer to the high average rates of 6 percent to 6.5 percent it registered between 2004 and 2008.

The CDC Group has invested in a wide range of companies in sub-Saharan Africa, including in the power, telecommunications, industrial and financial sectors.

CDC Group generally does not invest directly in companies, but through local fund managers. The group also has investments in Asia and Latin America. Last year, it made global investments worth about $500 million.

When the group was formed in 1948 it was called Colonial Development. It later changed its name to the Commonwealth Development Corp. before abbreviating it to CDC. In Africa, it concentrated its investments in former British colonies. But recently, the group has expanded to other African countries.

A Yemeni-Eritrean summit was held on Thursday in the Eritrean capital, Asmara, and co-chaired by President Ali Abdullah Saleh and Eritrean President Isaias Afeworki.

In the summit, the two leaders discussed the joint cooperation between the two countries in various areas and means of boosting them, especially in areas of trade, investment, fishing and security.

They confirmed their keenness to establish a strategic relationship between the two countries to enhance cooperation areas at the political, economic and security levels, as well as cooperation in combating maritime piracy and terrorism so as to serve the national security of the two countries and the stability in the region.

Moreover, they touched on activating the joint committee and the agreements signed between the two countries, in addition to the establishment of a trade fishing company.

Furthermore, the two leaders dealt with the developments of situations in the region, topped by the situation in Somalia and the Horn of Africa and the security in the southern Red Sea, as well as a number of common issues concerning the two peoples of Yemen and Eritrea.

After that, the two presidents spoke to media at a press conference, in which President Saleh expressed his happiness for visiting Eritrea, noting to the topics he discussed with his Eritrean counterpart in the summit.

” Views were identical , as we agreed on coordination and information exchange for cooperation in the southern Red Sea and the fight against piracy and terrorism and everything related to the national security of both countries”, Saleh said.

For his part, the Eritrean president said that the relationship between the two countries is strategic and there is a common vision between them towards a number of security and economic issues.

Source: SABA

Sunridge Gold Corp. (SGC/TSX.V) (the “Company”) has issued 20,000,000 common shares and 10,000,000 common share purchase warrants (“Warrants”) to raise gross proceeds of $10,000,000 pursuant to a non-brokered private placement announced September 24, 2010.

The Company is pleased to acknowledge the continued support and participation of Lundin Mining Corporation (“Lundin”) in this private placement as Lundin exercised its pre-emptive rights and acquired 2,255,728 units.

Each Warrant entitles the holder thereof to purchase one common share in the capital of the Company at a price of $0.75 until October 26, 2012.

The common shares issued, and any common shares issued pursuant to the exercise of Warrants prior to February 27, 2011, are restricted from trading until February 27, 2011.

The Company paid finder’s fees to persons who introduced it to private placement investors consisting of $422,800 cash and 467,800 common shares and 158,900 Warrants.

The securities offered have not been registered under the U.S. Securities Act of 1933, as amended, or any state securities laws, and may not be offered or sold in the United States absent registration or an exemption from the registration requirements.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

ABOUT SUNRIDGE:

Sunridge is a mineral exploration and development company focused on the acquisition, exploration, discovery and development of base and precious metal projects on the Asmara Project in Eritrea and exploration properties in Madagascar. Upon the close of the private placement announced on October 14, 2010, Sunridge will have approximately 115 million shares outstanding with $30.5 million in cash. Sunridge trades on the TSX Venture Exchange under the symbol SGC.

The proceeds of the financings will be used to fund the Company’s work programs at the Asmara Project in Eritrea, exploration work at the Besakoa Project in Madagascar and for general corporate purposes. Work programs at the Asmara Project in Eritrea will include a full feasibility study for the Debarwa high-grade copper-gold deposit, a pre-feasibility study for the combined Emba Derho, Adi Nefas, Gupo and Debarwa deposits, for drill programs at the Gupo Gold and Medrizien gold projects.

Since it was established in 1993, shortly after Eritrea’s independence, the Bank of Eritrea has played a pivotal role in the country’s development, helping to foster economic growth and regulating and building a sound financial environment.

While striving to maintain a healthy and sustainable balance of payments and strong exchange rate policy, the bank also works to advance and protect the interests of consumers and businesses.

In recent years, Eritrea has succeeded in maximizing its competitive advantages for growth and development, and now offers a host of opportunities in mining, tourism, agriculture and fisheries. It has also attracted foreign direct investment on an unprecedented scale.

The promotion of Eritrea’s investment-friendly climate is one of the bank’s key objectives in the coming years, according to Kibreab Weldemariam, acting governor of the Bank of Eritrea.

“To make ‘further investment’ possible, the Bank of Eritrea will make the utmost efforts to strengthen its regulatory capacity, modernize its payment system, and improve its human and technological capacity,” he said. “We encourage foreign investors, whether from China or any other foreign country to come to Eritrea and establish banks or financial institutions in the country.”

Among the many opportunities and benefits for investors is the easy access to the facilities Eritrean banks provide. “Investors are allowed to open foreign currency accounts, and operate them freely, without any restrictions or limitations,” Weldemariam pointed out. “They are also entitled to full repatriation of the profits they make and to retain their export revenues and proceeds in their foreign currency accounts.”

Given the political and social upheavals in neighboring countries Eritrea offers stability and security for investors. They also benefit from excellent road and sea links, and Eritrea’s strategic location on the Red Sea trading route – one of the busiest trading routes in the world.

The country’s free zones, at Massawa and Assab, provide excellent facilities for Chinese trade, shipping and logistics companies including the use of warehouses, which can be utilized as distribution centers for Middle Eastern and African countries. Investors can also use the free zones to export items manufactured within the country to other nations, and to establish shipping lines in Massawa or Assab to transport goods throughout Africa by land or by sea.

Almost 20,000 vessels a year pass Eritrea loaded with some 700 million tons of cargo – more than 9 percent of the estimated 7.7 billion tons carried by global shipping. The Massawa free trade zone encompasses about 5,000 hectares, including the port and airport. Authorities have invested tens of millions of dollars in preparing the infrastructure.

A strong trading bond

Chinese and Eritrean trading relations go back as far as its independence, withChina showing the will to partner and establish a friendly relationship with Eritrea. As Weldemariam explained: “China understands Eritrea’s needs and development policies, and because of that, we have developed a close relationship with them.

“Respect for other nations and non-interference in the internal affairs of other countries is one of the important principles on which China bases its foreign policy. Eritrea believes in that too.”

In the last few years, China has made significant contributions to Eritrea’s development, especially in infrastructure, such as hospitals, roads, schools and other buildings. China also supports Eritrea in developing its industrial, agricultural and mining sectors. Trade between the two countries continues to grow.

To conclude, Weldemariam said: “I would say to Chinese traders and businessmen that Eritrea is a virgin country and that every aspect, be it the security, the friendliness and openness of our people, or the climate, is condusive to foreign investment.

“There is a great opportunity for Chinese investors to participate in developing Eritrea’s global reach in tourism, fisheries, infrastructure, and agriculture.”

Source : China Daily

Chalice Gold Mines Limited (ASX: CHN) advises that in support of the Company’s application to list on the Toronto Stock Exchange it has completed a National Instrument 43-101 Technical Report on the Koka Gold Deposit. This report, prepared by AMC Consultants Pty Ltd, is appended to this announcement.

TIM GOYDER

Executive Chairman

Attachment: 43-101 Technical Report on the Koka Gold Deposit

About the Zara Gold Project

The Zara Project comprises four Exploration Licenses and two Prospecting Licenses covering an area of 615km2 situated in northern Eritrea, approximately 160km northwest of Asmara city. Chalice holds a 100% interest in the project subject to Eritrean government participation rights.

The Koka Gold Deposit within the project contains a Probable Reserve of 4.6 million tonnes of ore grading 5.1 grams of gold per tonne and containing 760,000 ozs of gold. This is contained within an Indicated Resource of 5.0 million tonnes grading 5.3 grams of gold per tonne containing 840,000 ozs of gold.

PTA BANK

The Eastern and Southern Africa Development Bank (PTA Bank), a financial arm of COMESA, has continued making profits. The President of the Bank, Dr. Michael Gondwe revealed this at the 26th Annual Meeting of the PTA Bank held in Mahe, Seychelles, on July 23, 2010. The bank he noted, made a profit of over USD18 million in 2009 up from USD12.5 million in 2008.

While officially opening the meeting, His Excellency the President of the Republic of Seychelles, James Michel commended the Bank for its’ good performance despite the harsh operating conditions. The Head of State added that the Bank’s support for Seychelles, especially in the petroleum sector, was greatly appreciated by the country.

The President called on Member States to enhance support to the Bank to enable it continue being supportive of business growth. “It is important for us to enhance capacity of regional institutions such as the PTA Bank if they are to continue playing a catalytic growth in our economies,” said the Head of State.

During the meeting, the Vice President and Minister of Finance for the Republic of Seychelles, Hon. Danny Faure was elected the new chairman of the PTA Bank Board of Governors for the next financial year. Hon. Faure takes over the Chairmanship of the Bank’s topmost policy organ from Hon. Sufian Ahmed, the Minister of Finance of the Federal Democratic Republic of Ethiopia.

Speaking at the occasion, the Hon. Faure called on his fellow Governors to continue contributing to the Bank’s programme “as we build a strong institution that will make a positive impact on our development agenda.”

Governors, comprised of shareholder representatives, deliberated on the business of the Bank. Top among them was adopting the Bank’s 2009 Annual Report. The Governors also adopted resolutions giving policy directions to the Board and management of the Bank. A new steering committee composed of Zambia, Sudan and the African Development Bank (ADB) was elected by the Governors.

The shareholders of the Bank are: The African Development Bank, Burundi, The People’s Republic of China, Comoros, Djibouti, Egypt, Eritrea, Ethiopia, Kenya, Malawi, Mauritius, Rwanda, Seychelles, Somalia, Sudan, Tanzania, Uganda, Zambia and Zimbabwe.

Eritrea

In a recent Exploration+Processing Magazine editorial, Stacy Davidson describes Eritrea with its 620 miles of coastline along the Red Sea as a historic centre of attention for various foreign powers, including the Ottoman Empire, Egypt, British Empire and Italy.

Nevertheless, Eritrea received the most attention from its larger neighbour Ethiopia, causing 30 years of oppression from the early 1960s to 1991 during the Ethiopian reign over Eritrea.

Eritrea fought a long and bitter independence war against Ethiopia and soon after the struggle had to face the challenge of rebuilding most of its shattered infrastructure and economy to serve the people of a new nation. According to Davidson, it was around this time that a Canadian gold and base metal explorer by the name of Nevsun Resources Ltd. shifted its focus towards southern Africa.

Nevsun’s history dates back to its founding year in 1965 in Vancouver as a minor exploration entity working on small mining projects geographically limited to North America. Nevsun’s expansion to markets abroad began in 1993 when it successfully started to identify properties with significant potential in Africa. The Kubi project in Ghana, under an agreement with Anglogold Ashanti, and Tabakoto mine in Mali were Nevsun’s first overseas ventures in 1999 and 2004. Both properties were sold between 2007 and 2008 as Nevsun wanted to focus solely on Eritrea, according to Nevsun CEO Cliff Davis.

In 2003 Nevsun made a discovery at Eritrea’s Bisha property, and it soon become apparent the Nevusn and the government of Eritrea would have a mutual interest to develop the property. Nevsun says that Bisha will be the first mine operating since colonial times in Eritrea and acknowledges the commitment of Eritrea’s President Isaias Afewerki to develop a mining industry to pursue Eritrea’s economic rehabilitation. The government holds a 10 percent free participating interest in the Bisha Mine and a 30 percent paid participating interest through the Eritrean National Mining Corporation (ENAMCO), which is a state owned mining company.

Eritrea’s government’s objective is to have a clean well-developed mining industry and Nevsun has not experienced any kind of corruption or underhanded dealings, says the company. “We got into Africa in 1993 and in 1997 received an enquiry about investing in Eritrea,” Nevsun CEO Cliff Davis recalls. “By 1999, we were actively engaged in Eritrea and exited about the potential we saw there.” Today Nevsun is nearly finished with the construction of the Bisha Mine and expects it to be in operation by the end of 2010. The Bisha project is a large precious and base metal-rich volcanogenic massive sulphide deposit, and it is fully financed and permitted. Nevsun says the mine will be a low cost gold producer for the first two years of its 10-plus mine life time.

The company expects to return payable metals of: 1.06 million ounces gold, 9.4 million ounces silver, 734 million pounds copper, and 1 billion pound zinc. Nevsun highlights that drill hole intersections have encountered mineralization to a maximum tested depth of 1300 feet, but further resource potential exists beyond depth and from nearby discoveries within the company’s licensed areas. Further, it believes that the mine life of Bisha could be far more than 10 years based on evidence from potential resources deep inside the Bisha mine.

Nevsun’s CEO projects that the company will employ at least 350 local employees and 50 expats when Bisha will reach full operational capability. He ads that Nevsun is employing around 600 local people and 100 expats during the current construction phase and committed to train and develop locals due to a lack of skilled human resources in the country. Nevsun has developed three scenarios of economic estimates from the mine, based on three types of metal prices:

1. With low metal prices, the company projects a 20 percent internal rate of return, payback within 2.8 years and $426 million net cash for mine’s life.
2. With medium metal prices, the company projects a 45 percent rate of return, payback within 1.6 years and $1.1 billion net cash for mine’s life.
3. If metal prices are high, it plans with 63 percent internal rate of return, payback within 1 year and $1.75 billion net cash for mine’s life.

In addition Nevsun continues to work at the nearby Harena deposit, which is within its current mining licence, to define its potential as mill feed for the Bisha plant. There are also plans to drill at other potential targets on the property, along with continued prospecting, mapping, sampling and ground geographical surveys in order to identify new targets within its license.  However, right now the company is focused on getting its Bisha plant into production according to its CEO.