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

The Zara Joint Venture comprises four Exploration Licenses and two Prospecting Licenses covering an area of 615 km2 situated in northern Eritrea, approximately 160 km northwest of Asmara city (Figure 1).

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

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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.

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capitaleritrea » Koka Gold Deposit

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

Chalice Gold Market Capitalisation 10 Times Greater Than Last Year