Chalice Gold Mines (ASX: CHN; TSX: CXN) has received gold hits of up to 138 grams per tonne gold from drilling at the Koka South prospect in Eritrea.
The Koka Gold Deposit is part of the Zara Project in Eritrea, which Chalice agreed to sell the remaining 60% of Zara Gold Project in December to China SFECO Group for US$80 million in cash plus a payment of US$20 million at a later date.
From the last two holes of the 2011 drill program, it appears that mineralisation extends at depth to the south and is still open.
Results returning high-grade intersections, including: 1 metres at 138.65g/t gold from 185 metres, 1 metres at 56.38g/t gold from 195 metres, 1 metres at 36.97g/t gold from 199 metres and 1 metre at 16.82g/t gold from 322 metres.
The widths and grades of mineralisation encountered have the potential to provide a significant underground addition to the Koka open pit resource.
Koka South lies immediately to the south of the Koka Main deposit with a reserve of 760,000 ounces at 5.1g/t gold.