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Chalice Gold Mines Signs Agreement for Two Major Exploration Licences in Eritrea

Chalice Gold Mines Limited (TSX:CXN)(ASX:CHN) has announced that it has signed agreements on two major new Exploration Licences in Eritrea.

Highlights:

  • Two new exploration licences granted in Eritrea:
    • Mogoraib EL of 555 sq km lies 10km north of Nevsun Resources' world-class Bisha gold and base metal deposit and shares similar geology
    • Hurum EL of 275 sq km adjoins Zara South and straddles the same major regional structure hosting the 840,000 oz Indicated Resource at the Koka Gold Deposit
    • Exploration expenditures on these licences exceeding US$1 million budgeted for the next 12 months.
  • Conversion of Zara North and South Prospecting Licences to Exploration Licences completed

The Company's 100% owned subsidiary, Keren Mining Pty Ltd has signed agreements with the Eritrean Ministry of Energy and Mines for two new Exploration Licences totalling 830 sq km in northern Eritrea.

The new licences, Mogoraib North and Hurum, add significantly to the Company's exploration tenure in two highly prospective geological terrains. Intensive exploration programs are planned for the first 12 months of tenure, with an initial budget exceeding US$1 million.

Mogoraib North EL

The 555 sq km Mogoraib North licence lies approximately 10 kilometres north of the world class Bisha polymetallic Volcanic-hosted Massive Sulphide (VHMS) deposit owned by Nevsun Resources Ltd (60%) and the Eritrean National Mining Corporation (ENAMCO) (40%) which commenced production in early January this year.

The volcano-sedimentary rocks hosting the Bisha deposit extend northwards beneath the Mogoraib North EL although much of the basement geology is masked by recent alluvial cover. A regional interpretation of Landsat imagery conducted by Chalice in 2009 identified several 'islands' of exposed bedrock within these later sediments with Bisha-like spectral signatures and the licence was lodged to cover these anomalies.

Chalice is planning to undertake an initial exploration program involving acquisition and interpretation of further satellite imagery, geological mapping, geochemical sampling and an airborne EM survey using the VTEM system.

Hurum EL

The 275 sq km Hurum licence lies adjacent to and south west of the Company's Zara South licence. The property straddles the Elababu Shear Zone, a major regional structure that controls much of the known gold mineralization in northern Eritrea, including the Company's flagship Koka Gold Deposit (Indicated Resource of 5Mt grading 5.3 g/t) which lies ~ 40 kilometres to the north east.

Chalice is planning to undertake an initial exploration program involving acquisition and interpretation of satellite imagery, geological mapping, geochemical sampling and an airborne magnetic and radiometric survey.

Zara North and Zara South Licences

Chalice also wishes to advise it has signed agreements for the conversion of the 115 sq km Zara North and 350 sq km Zara South Prospecting Licences to Exploration Licences. These licences lie adjacent to and along strike from the Koka Gold Deposit and are currently the focus of intensive exploration programs (refer to the announcement of 20 December 2010 for further details).

Chalice Chairman Mr Tim Goyder commented that:

"With the granting of these new tenements, and the successful conversion of Zara North and South to Exploration Licences, Chalice now holds Exploration Licences totalling some 1445 sq km in a region that has a demonstrated potential to host substantial high grade gold and base metal deposits. We look forward to implementing intensive exploration programs on these properties and a steady flow of positive news in the coming months."

Source: Chalice Gold Mines Limited

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