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From: B-Haile (eritrea.lave@comhem.se)
Date: Sun Nov 14 2010 - 23:51:54 EST
Chalice Gold Mines Limited ABN 47 116 648 956
15 November 2010
ASX ANNOUNCEMENT
Zara Project Update - ENAMCO Paid Participating Interest
Chalice Gold Mines Limited (ASX: CHN) ("Chalice") is pleased to announce that in an important step towards finalisation of a Mining Agreement for the Koka Gold
Project, the Eritrean Government has advised its intention to purchase, at fair value, a 30% paid participating interest in the project through the Eritrean National
Mining Corporation (ENAMCO). This paid participating interest is in addition to ENAMCO's 10% carried interest.
The method and timing of the valuation to determine the fair value of the paid participating interest is being discussed with ENAMCO, however, it is expected to
follow the precedent set by the Bisha project, held 60% by Nevsun Resources Ltd (TSX:NSU)(AMEX:NSU) and 40% by ENAMCO. In the event the Company and
ENAMCO are unable to agree the fair value, a mutually acceptable independent valuer will be appointed to determine the fair value.
ENAMCO will also be required to contribute its proportionate share of project development and capital expenditure.
Finalising the terms on which ENAMCO will acquire the 30% interest in the project will greatly assist Chalice's efforts to secure the necessary approvals to develop
Koka and is a strong vote of confidence in the project by the Eritrean Government.
Chalice Executive Chairman Tim Goyder said the Company welcomed ENAMCO's decision to be a significant partner in Koka and Chalice looked forward to the
benefits that the arrangement would generate.
"This agreement will allow Chalice and ENAMCO to move rapidly towards finalisation of the agreements covering the project and the granting of a Mining
Licence." Mr Goyder said.
"ENAMCO's involvement will also play a significant role in enabling the project to secure funding and in the process reduce Chalice's funding requirements."
DR DOUG JONES
Managing Director
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