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 ASX; CHN
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Company Statement
Chalice Gold Mines Limited (ASX: CHN; “Chalice”) is a well funded Australian-listed company focussed on increasing shareholders’ wealth through aggressive exploration, resource definition and development of its gold assets.
On 3 April 2009, Chalice and Eritrea-focussed gold explorer Sub-Sahara Resources NL (ASX: SBS; “Sub-Sahara”) announced a merger of the two companies by way of a Scheme of Arrangement. Completion of the proposed merger is expected to occur in July 2009. The merger with Sub-Sahara will combine Chalice’s strong cash position with Sub-Sahara’s 69% interest in the high grade Zara Gold Joint Venture in Eritrea. Successful completion of the merger is anticipated to enable the rapid advancement of the Zara Gold Project through feasibility and development to production.
Chalice has also entered into an agreement to acquire a further 11.12% interest in the Zara Project, which will result in the newly merged group holding 80% of the project, with Dragon Mining Limited owning the remaining 20%.
Upon finalisation of the proposed merger, Chalice intends to complete a pre-feasibility study on the Zara Project by the second half of 2009 and a Bankable Feasibility Study in the first half of 2010.
Current Operations
The Zara Gold Project
The Region
The Zara Gold Project consists of six contiguous granted licenses covering an area totalling 615 square kilometres situated in northern Eritrea, East Africa, approximately 160 kilometres northwest of the country’s capital, Asmara.
The Zara Gold Project lies within the southwestern part of the Late Proterozoic Arabian–Nubian Shield, an emerging gold and base metal province that hosts the ~13 million ounce Sukari gold deposit in Egypt, the ~2 million ounce Ariab/Hassaď gold and base metal deposit in Sudan and the ~1 million ounce Bisha gold and base metal deposit in Eritrea (figure 1).
The properties straddle the thrusted contact between two geological terranes where it shows a flexure from northeast to north-northeast (figure 2). Gold mineralisation is associated with this terrane boundary along its length, with the main prospect identified to date, Koka, being the focus of past exploration by Sub-Sahara.
The numerous artisanal mining sites and stream sediment gold anomalies identified within the 600 square kilometre project area indicates significant exploration upside remains for the discovery of additional resources.
Figure 1: The Arabian-Nubian Shield – an emerging gold province
The Resource
The Zara Gold Project currently comprises the Koka Indicated and Inferred Resource of 5.04 million tonnes at 5.8g/t gold for 0.94 million ounces of contained gold above a 1.2g/t cut-off.
The Koka mineralised zone has a total strike length of more than 700 metres and is developed principally within an elongate, lensoidal body of microgranite intruded along the sheared and altered contact between a sequence of sedimentary and basaltic rocks to the west (footwall) and a volcanic and volcanoclastic sequence to the east (hangingwall).
There is a considerable competency contrast between the microgranite and the sedimentary and volcanic rocks across this contact and this has resulted in the steeply dipping western contact of the microgranite being strongly brecciated, quartz veined and altered over a width averaging around 20 metres. Gold is present in the quartz veins mostly as inclusions in pyrite, but also as discrete grains in galena, quartz and carbonate.
Preliminary metallurgical test-work by Ammtec Ltd indicates high gold recoveries by gravity (>40%) with total gravity plus cyanide recoveries exceeding 95% over 24 hours leach time and with low reagent consumption.
Figure 2: The Koka Deposit – 3D Model
Figure 3: The Koka Deposit – Section 9840N
Figure 4: The Koka Deposit – Section 9520N
West Australian Projects
Murchison
The Gnaweeda Project is located in the Murchison Region of Western Australia, covering 190 square kilometres of tenements approximately 30 kilometres northeast of Meekatharra.
The project is subject to a joint venture with Teck Australia Pty Ltd (“Teck”) which has the right to acquire a 70% interest by the expenditure of A$1.5M. Teck has currently earned 51% and may earn a further 19% by the expenditure of an additional A$750,000. Teck is currently reviewing various options for advancing the project, including bringing in another funding partner.
Laverton
The Wilga Project is located 15 kilometres south east of AngloGold Ashanti’s Sunrise/Cleo gold mine and approximately 55 kilometres south of Laverton in the highly endowed Laverton Tectonic Zone, which also hosts the Granny Smith and Red October gold deposits.
Chalice has entered into an agreement with AngloGold Ashanti (“AGA”) whereby AGA has the right to earn a 75% interest in the project by the expenditure of A$2 million within the next 4 years.
West Pilbara
Chalice’s Yandeearra Project covers some 1,300 square kilometres in the West Pilbara of Western Australia, located approximately 100 kilometres south of Port Hedland and immediately south of Range River Gold Limited’s Indee and west of De Grey Mining Limited’s Turner River Gold Projects.
Atlas Iron Limited (Atlas Iron) has an option to acquire the iron ore rights over the Yandeearra Project for A$1M having previously paid A$250,000 for the grant of the option. This option expires in November 2009.
Geographical Spread
Board of Directors and Key Management
| Tim R B Goyder - Executive Chairman |
| Mr Goyder has over thirty five years experience in the resource industry as a prospector, investor, company director and as the owner and operator of a large contract drilling company. |
| Mr Goyder has been involved in a range of exploration and development projects and in the formation and management of a number of publicly listed companies. He is currently a director of Uranium Equities Limited and Chairman of Liontown Resources Limited. |
| Doug Jones, PhD, AusIMM, CPGeo - Managing Director |
| Dr Jones has 30 years experience in international mineral exploration, having worked extensively in Australia, Africa, the Americas and Europe. His career has covered exploration for gold in a wide range of geological settings, volcanic and sediment-hosted zinc-copper-lead, and IOCG style copper-gold. He is also the Managing Director of Liontown Resources Limited and a director of AIM-listed Minera IRL Limited. |
| Anthony W Kiernan, LLB - Non-executive Director |
| Mr Kiernan is a Solicitor with considerable experience in the administration and operation of listed public companies. In addition to his legal practice Mr Kiernan provides commercial and corporate advice to various entities including those in the resources sector. He is Chairman of BC Iron Limited and a director of Uranium Equities Limited and Liontown Resources Limited, which are listed on the Australian Securities Exchange. Mr Kiernan is also Chairman of Anglicare (WA). |
| Richard Hacker, B.Com, ACA, ACIS - Commercial Manager and Company Secretary |
| Mr Hacker has significant professional and corporate experience in the energy and resources sector in Australia and the United Kingdom. He has previously worked in senior finance roles with global energy companies including Woodside Petroleum Limited and Centrica Plc. Prior to this, he worked with leading international accounting practices. Mr Hacker is a Chartered Accountant and Chartered Secretary and is also Company Secretary of Liontown Resources Limited and Uranium Equities Limited. |
Company AddressLevel 2, 1292 Hay Street
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CapitalShares on Issue; 72,800,000
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Year End30 June 2009 |
Major Shareholders
| Plato Prospecting Pty Ltd | 22.25% |
| Balfes (Qld) Pty Ltd - Balfes Super Fund | 6.87% |
Related News
23/02/10 - Chalice Gold Will Complete A Feasibility Study On The Koka Gold Project In Eritrea Within A Matter Of Months20/10/09 - Chalice Gold’s Eritrean Ground Offers Plenty Of Good-Looking Exploration Targets To Compliment The 944,000 Ounce Koka Development Property
14/07/09 - Chalice Gold Mines Plans To Be Producing 100,000 Ounces Of Gold Per Year From The Zara Gold Project In Eritrea By 2011
08/05/09 - Chalice Gold Mines Chases Down The Source Of The Queen Of Sheba’s Gold In Eritrea
Most Recent Statement
03/03/10 - Chalice Takes Option to Acquire Dragon Mining’s Stake in Zara Gold Project22/02/10 - Substantial drilling results at Koka Gold Deposit
19/01/10 - Further Results from Koka Drilling
29/12/09 - Investment in London Africa Limited
29/12/09 - Sale of Wilga Gold Project
02/11/09 - Koka Project Stands to be a Highly