Zara Project Overview
Overview
The Zara Project consists of six contiguous granted licences (Zara Central comprising Zara 1, 2, 3 and 4, Zara North and Zara South) covering an area totalling 547 sq km situated in northern Eritrea, approximately 160 km northwest of the country’s capital, Asmara.
A significant high grade gold deposit has been defined at the Koka Gold Deposit, with a JORC Indicated and Inferred Resource of 5 million tonnes at 5.3 grams per tonne gold for 840,000 ounces of contained gold.
Chalice has completed a Feasibility Study with the aim of commencing development at the Koka Gold Deposit in 2011.
Project Ownership
ENAMCO has agreed to pay to Chalice US$32 million for a 30% participating interest in the Zara Licences which will be represented by an interest in the operating company, Zara Mining SC (“Zara”). Zara will own, develop and operate the Koka Gold Mine, and will own and explore the surrounding Zara Licences.
In addition to this amount, ENAMCO will pay Chalice approximately US$2 million (subject to audit), which represents a reimbursement to Chalice of ENAMCO’s pro-rata share of exploration costs expended to date on the Zara Licences which fall outside of the Koka mining licence.
Payment will be made within six months of the signing of a shareholders’ agreement, which is expected to be completed shortly. Following completion of the agreement, the Zara Project’s ownership structure will be Chalice (60% participating interest) and ENAMCO (30% participating interest, 10% free carried interest).
Chalice and ENAMCO will contribute to the future development costs of Koka, and to future exploration expenditures on the Zara Licences, on a 2/3 and 1/3 basis, in line with their respective share of the overall participating interest .
Geology
The Zara Project straddles a major regional shear corridor where it shows a flexure from northeast to north-northeast. Gold mineralisation is associated with this shear zone along its length, with the main prospect identified to date, the Koka Gold Deposit, being the focus of past exploration.
The Koka Gold Deposit has a total strike length of more than 650 metres and is developed principally within an elongate, lensoidal body of microgranite intruded along the sheared contact between a sequence of sedimentary and basaltic rocks to the west (footwall) and a felsic volcanic and intrusive dominated sequence to the east (hanging wall) (Figure 1).
Figure 1: Geology of the Koka Gold Deposit showing drill hole collars and
planned open pit outline
The steeply dipping western contact of the microgranite is strongly fractured, quartz veined and altered over a width up to 80 metres and averaging around 20 metres. Gold is present in the quartz veins associated with carbonate and minor sulphides, mainly pyrite (Figure 4).
The geometry of the deposit is shown diagrammatically in Figure 2 with representative cross-sections illustrated in Figure 3.
Figure 2: 3D represenation of the Koka Gold Deposit showing location of sections
Figure 3 : Representative Drill Sections
Figure 4: Drill core sample from Koka Gold Deposits showing coarse gold associated with pyrite and galena (lead sulphide) in quartz-carbonate vein
Technical Information
This information is contained in the NI43-101Technical Report on the Koka Gold Deposit, Eritrea dated 27 July 2010 and released on 8 October 2010 (the "Technical Report"). The Technical Report was prepared by Dean Carville, Bsc (Geology) (Hons), MAusIMM, MGSA, Principal Geologist at AMC Consultants Pty Ltd; David Lee, BEng (Mining) (Hons), Graduate Diploma of Business, MAusImm, Principal Mining Engineer at AMC Consultants Pty Ltd; and David Gordon, BAppSc, MAusIMM, Principal Process Engineer at Lycopodium Minerals Pty ltd (the "Authors"). Each of the Authors is an independent "Qualified Person" in accordance with National Instrument 43-101 - Standards of Disclosure for Mineral Projects.
Competent Person/Qualified Person Statements
The information contained on this website that relates to Exploration Results is based on information compiled by Dr Doug Jones, a full-time employee and Director of Chalice Gold Mines Limited, who is a Member of the Australasian Institute of Mining and Metallurgy and is a Chartered Professional Geologist. Dr Jones has sufficient experience in the field of activity being reported to qualify as a Competent Person as defined in the 2004 edition of the Australasian Code for Reporting of Exploration Results, Minerals Resources and Ore Reserves (the JORC Code) and is a "Qualified Person" under National Instrument 43-101 - 'Standards of Disclosure for Mineral Projects‘. Dr Jones consents to the release of information in the form and context in which it appears here.
The Mineral Resource estimate was prepared by Mr. John Tyrrell who is a Member of the Australasian Institute of Mining and Metallurgy. Mr. Tyrrell is a full time employee of AMC and has sufficient experience in gold resource estimation to act as Competent Person as defined in the 2004 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code) and is a "Qualified Person" under National Instrument 43-101 - 'Standards of Disclosure for Mineral Projects'. Mr. Tyrrell consents to the inclusion of this information in the form and context in which it appears.
The information in this statement of Ore Reserves is based on information compiled by Mr David Lee who is a Member of the Australasian Institute of Mining and Metallurgy and a full time employee of AMC. Mr Lee has sufficient relevant experience to be a Competent Person as defined in the 2004 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code) and is a "Qualified Person" under National Instrument 43-101 - 'Standards of Disclosure for Mineral Projects'. Mr Lee consents to the inclusion of this information in the form and context in which it appears.