Reuters – Eritrea has granted Australia’s Chalice Gold Mines (CHN.AX) two new exploration licences covering 830 square kilometres in the north of the Horn of African nation, the miner said in a statement.
Chalice said in a statement on Thursday its licences for the Zara North and Zara South had also been changed to exploration licenses from prospecting licenses.
The Zara South and Zara North project is one of the largest in the country and is believed to hold 1 million ounces of gold.
The company’s … subsidiary, Keren Mining … has signed agreements with the Eritrean Ministry of Energy and Mines for two new exploration licences totalling 830 sq km in northern Eritrea,” Chalice said.
The new licences, Mogoraib North and Hurum, add significantly to the company’s exploration tenure in two highly prospective geological terrains,” the statement said.
Eritrea set the government’s stake in any mining project at 10 percent stake in 2008 with an option to buy a further 30 percent, a small claim compared to other countries in the area like Egypt which mandates a 50 percent stake or Sudan at 60 percent, according to industry experts.
The relatively liberal mining terms have led more than a dozen foreign companies to get licenses to explore in Eritrea, which analysts expect to accelerate dramatically in the next five years and provide a lifeline for the impoverished economy.
Chalice said the 555 square km Mogoraib North is about 10 km north of Eritrea’s most advanced project — Bisha — run by Canada’s Nevsun Resources Ltd.
Bisha has 27 million tonnes of ore believed to contain 1 million ounces of gold, 700-800 million lb of copper and 1 billion lb of zinc.
Chalice said it planned exploration in the first year of holding the licences at a cost of more than $1 million.
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 1,445 sq km in a region that has a demonstrated potential to host substantial high grade gold and base metal deposits,” its Chairman Tim Goyder said in the statement.