Eritrean National Mining Corporation has agreed to purchase a 30% stake in the Zara gold project owned by Chalice Gold Mines Ltd for $32 million. The Toronto Stock Exchange listed miner said that the funds would be used for final permitting, financing and development of the Zara project.
Zara Mining is the operating company in which Eritrean National Mining Corp. will receive a share. The company will develop and operate the Koka gold mine in Eritrea in eastern Africa. This is part of the broader project which includes three adjoining exploration licenses.
The managing director of Chalice Gold, Doug Jones said that reaching this agreement with Eritrean National Mining Corp enables them to move forward towards developing the high grade and low cost gold project. He added that they had an excellent working relationship with the company and they looked forward to building a successful and profitable mine for the Zara shareholders and the Eritrean people.
The shares of Chalice Gold went up 6.25 % to trade at 34 cents. While listed in Toronto the company is based in Australia. The company is currently drilling targets around the Koka deposit, hoping to add to its mineral resource and reserve inventory. The Koka Gold Deposit lies within the 547 sq km Zara block of Exploration Licences.
Chalice controls a total of 8 Exploration Licences in northern Eritrea covering an area of 1,370 sq km
Eritrea is a country in the Horn of Africa. The capital is Asmara. It is bordered by Sudan in the west, Ethiopia in the south, and Djibouti in the southeast. The northeast and east of the country have an extensive coastline on the Red Sea, directly across from Saudi Arabia and Yemen.