minesite article, page-4

Chalice Gold Plans Gold Production in Eritrea by 2011
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Tim Goyder and Douglas Jones, the two directors of Chalice Gold Mines made today several briefings across London according to Minesite.

Chalice Gold Mines is on its way to merge with Sub-Sahara Resources mainly for financial reasons.

Minesite states “Sub-Sahara has just under a million ounces of gold at Zara, but very little money for development, while Chalice is looking for a flagship property to run, and has around A$10 million in the bank to move things nicely along”.

The interview also revealed that Chalice’s takeover of Sub-Sahara has reached the final stages and that the deal should be made official at a shareholders meeting on the 4th of August.

The directors even refer back to history, mentioning that the region is awaking from a long sleep after the Arabian-Nubian shield used to host mines producing gold for King Solomon, the Pharaohs and the Queen of Sheba in neoproterozoic times.

According to Chalice the region enjoys high prospectivity and high marketing potential.

Further, the directors remark that the Zara area was discovered by artisans in the late 1990s, and that yet exploration on this particular patch of the Arabian-Nubian shield has been minimal.

So far, with the current focus on the Koka prospect it is said, that 50 kilometres of strike on a major gold mineralized corridor has been established. Koka prospect is where Sub-Sahara has booked its 944,000 ounces. According to the interview, Koka’s largely drilled off, except at depth, but Mr. Douglas mentioned, “the potential for repetition of this type of deposit along the Zara strike zone is quite good”.

Chalice is planning to undertake a scoping study phase followed by a feasibility study completing both by May next year. Quoting the directors, there is optimism to start production of 100,000 ounces of gold per year in 2011.

Initial indications for the development costs of the Zara project in Eritrea are US$70 million. It is for this reason, that the directors are being occupied in meeting brokers and bankers in London, Boston and New York, as well as considering a Canadian listing for Chalice.