Ann: Maiden 760,000oz Ore Reserve for Zara Gold P, page-4

re: Ann: Maiden 760,000oz Ore Reserve for Zar... Chalice takes full ownership of Eritrea gold mine


By: Esmarie Swanepoel
22nd June 2010



PERTH (miningweekly.com) East Africa-focused Chalice Gold Mines has taken full ownership of the Zara gold project, in Eritrea, after it bought a remaining 20% stake from Dragon Mining.

Dragon Mining would receive A$8-million in cash, and two-million Chalice shares, with a current market value of A$0,9-million, for the 20% interest in the project, as well as its wholly owned subsidiary, Dragon Mining (Eritrea).

Chalice would also pay Dragon Mining a further A$4-million on the delineation of one-million ounces of gold reserve at the Zara project.

Chalice executive chairperson Tim Goyder said on Tuesday that the ability to consolidate the project has come at an opportune time, as the company neared completion of its feasibility study, which would be released in July.

Earlier this month, Chalice reported a maiden gold reserve of 760 000 oz of gold from an indicated gold resource of 840 000 oz, for the Zara project.

Meanwhile, Dragon Mining executive chairperson Peter Cordin stated that the company would now focus on increasing the reserve and mine life of its existing gold mines in Sweden and Finland.

Feasibility studies for the underground operations at the Svartliden gold mine, in Sweden, and the Jokisivu gold mine in Finland, were nearing completion with commitment to development expected in the third quarter of this year.

We are well positioned to meet forecasted production of 70 000 oz 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, said Cordin.
Edited by: Mariaan Webb