Tags: Annual General Meeting, Chalice Gold, Eritrea, gold, Koka...

Tags: Annual General Meeting, Chalice Gold, Eritrea, gold, Koka Gold Deposit
Chalice Gold Market Capitalisation 10 Times Greater Than Last Year
Posted on 16 November 2009
Koka Gold Deposit

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