From: Berhane Habtemariam (Berhane.Habtemariam@gmx.de)
Date: Mon Nov 02 2009 - 16:43:32 EST
Feasibility study for Chalice Gold's Koko deposit to be completed mid-2010
By: <http://www.miningweekly.com/author.php?u_id=159> Esmarie Swanepoel
2nd November 2009
JOHANNESBURG (miningweekly.com) - East-African focused Chalice Gold on
Monday reported that an independent scoping study into its Koko gold
deposit, in Eritrea, has found that the deposit had the potential to
underpin a highly profitable gold mining operation.
The gold explorer said in a statement that it would now proceed with a full
feasibility study, which was likely to be completed by mid-2010, based on a
forecasted annual production of 110 000 oz, at a cash cost of $424/oz, over
a six-year life.
The scoping study estimated that the Koka project would have capital costs
of $97,8-million.
"The scoping study shows that Koka has the potential to be a lucrative
project, and that it is based on a much lower gold price than is currently
the case," said Chalice executive chairperson, Tim Goyder.
"The cash costs will be low by world standards and the mining will be
relatively straightforward, making Koka an extremely attractive project."
Goyder noted that there was also significant potential to increase the size
of the project by drilling the numerous exploration targets the company had
at Zara.
The project is 80% owned by Chalice and 20% owned by Dragon Mining, while
the Eritrean government was entitled to a 10% free carried interest. In
addition, the Eritrean government had the right to purchase up to a further
30% in the project on financial terms to be agreed, and which was payable to
the joint venture in consideration of diluting their respective interests.
Edited by: Chanel Pringle
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