Chalice Gold Mines completes sale of Zara Gold project in Eritrea to China
SFECO Group and ENAMCO for combined US$114M
Tuesday , 04 Sep 2012 Chalice Gold Mines
Net cash balance of $82 million after tax with a focus on acquiring new
projects
Chalice Gold Mines Limited (ASX: CHN/TSX: CXN) is pleased to announce that
it has today completed the sale of the Zara Gold Project in Eritrea to China
SFECO Group for US$78 million plus a deferred payment of US$2 million upon
commencement of commercial production at the Koka Gold Mine.
In addition, the Eritrean National Mining Corporation ("ENAMCO") has settled
the remaining balance of US$29 million for its acquisition of a 30 per cent
interest in the Zara Project (in addition to its 10 per cent free carried
interest).
Chalice has received all funds and paid all applicable taxes due in Eritrea
for both the SFECO transaction and the ENAMCO transaction. Chalice's current
cash balance (at today's USD: AUD exchange rate) is $82 million, which
equates to approximately 33 cents per share, putting the Company in an
exceptionally strong position to embark on its next chapter of growth.
Chalice has, in addition to its experienced management and board of
directors, retained independent expertise to assist in the assessment of
potential opportunities. Drilling will also recommence in October, subject
to weather conditions, at the Mogoraib North VMS Exploration Project in
Eritrea.
Chalice's Executive Chairman, Tim Goyder, said the completion of the Zara
transactions marked the beginning of an exciting new chapter of growth for
the Company, with its cash balance of A$82 million putting it in a unique
position to identify and secure quality new opportunities in the
international resource sector.
"This is a time in the market when cash is king and opportunities abound,"
Mr Goyder said. "We are very pleased to have crystallised significant value
for our shareholders from the successful completion of this transaction, and
we are now looking forward to identifying and securing new projects that
will define the next phase of growth for Chalice."
