Looking back it is not that simple Phirang123 though I admit it...

Looking back it is not that simple Phirang123 though I admit it may look like Chalice are being forced into some kind of fire sale with the ungenerous offer.

However looks to me more that the recent perceived political risk (real risk not as high IMO) made it harder to get the finance for Koka and the Chinese were waiting to pounce where others may have been be put off.

Extracts only
http://www.tesfanews.net/archives/5856
At that time, Grandich argued, the Chinese were about to announce a series of acquisition as they have always looked at Nevsun, Sunridge and others.

After the Gabon plot failed, the Chinese has simply backed down but put a watchful eye on every new discovery and drilling results issued by the more than dozen junior minors in the country.

It was at this time that Chalice expressed it intent to sell its 60% share to a certain undisclosed partner.
Grandich says, “Once the Chinese take a foothold in Eritrea, all that **** in the UN will come to an end,” he said “because they’re the next big thing economically.”
Once that happened, he said “the worst in Eritrea is going to be behind us.”

http://minesite.com/news/chalice-moves-towards-a-development-decision-at-koka-politics-permitting

Debt funding Koka might be a heavy lift in the current market, but with the Nevsun example blazing a trail, there will be no shortage of equity to get the mine into production.

Help might also be available from Chinese banks, who may be less concerned about the complexities of Eritrean politics than their Western counterparts.

In the meantime, it’s worth remembering that Chalice also has its foot on some great-looking exploration ground in a region

http://www.theaustralian.com.au/business/opinion/chalice-may-turn-out-to-be-golden-after-all/story-e6frg9lo-1226232154086

Despite the pedigree of Zara, exiting the project makes sense given the reality of capital markets. Because it's in Eritrea -- which Goyder says is a fine place to do business in -- funding the project was going to be a stretch given it is subject to UN sanctions for allegedly aiding terrorists.

http://www.theaustralian.com.au/business/opinion/chalice-may-turn-out-to-be-golden-after-all/story-e6frg9lo-1226232154086

FINANCING challenges appear to have led Chalice Mines down the sale route the company is now on for its Zara project in Eritrea.

Chalice is understood to have been shopping the project around for some months, culminating in this week’s announcement that it had received a non-binding letter of intent setting out the possible terms on which Zara may be acquired.

It is understood that debt financing by banks is problematic due to the political risk, Still, there is said to be plenty of corporate equity interest in Zara if reports about what the vendors are saying are to be believed.

Certainly first pass interest would seem assured given mooted annual production of 104,000 ounces per annum for seven years at cash operating costs of $US338/oz – starting late in 2013.

http://www.highgrade.net/article/2011-12-15/Eritrea_risk_narrows_Zara_field
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Agree though with the comments from posters that Chalice could spell out what their thinking is a bit more,especially as it does not look like a good deal.