Visit the new AsenaTv Website

Chalice puts Eritrea gold project on chopping block

By: Matthew Hill TORONTO ( – TSX- and ASX-quoted Chalice Gold Mines said on Monday it signed a nonbinding agreement to sell its Zara project in Eritrea, the East African State that the UN slapped with

By: Matthew Hill

TORONTO ( – TSX- and ASX-quoted Chalice Gold Mines said on Monday it signed a nonbinding agreement to sell its Zara project in Eritrea, the East African State that the UN slapped with further sanctions last week.

The junior did not disclose the name of the potential acquirer, saying the proposal is nonbinding and incomplete, and that a deal might not eventuate.

Chalice said it expected to be able to report “further developments” in the next two weeks.

The Perth-based company owns a 60% stake in the Zara project, which includes the Koka deposit that has a 840 000 oz gold resource. The government owns the rest.

The company also owns other exploration properties nearby competitor Nevsun’s Bisha mine.

The UN last week handed down further sanctions to Eritrea’s dictatorial government, which other African States accuse of assisting the militant antigovernment al Shabaab movement, in Somalia, which the country has denied.

The sanctions, watered down from the harsher ones Gabon and Nigeria first proposed in a draft resolution in October, expanded two-year-old asset-freezing measures and a travel ban on Eritrean individuals and entities, and required countries to make their companies involved in mining in Eritrea exercise “vigilance” to ensure funds from the sector are not used to destabilise the region.

The steps passed two years ago also included an arms embargo.

TSX-listed Nevsun said no direct impacts on its Bisha mine would result.

The company said in November it was looking to buy advanced-stage copper-gold projects in the Americas, Europe or Africa.

Nevsun wanted to pick up an additional project that had “some kind of economic assessment, either a PEA [preliminary economic assessment] or greater”, the company said.

Chalice fits those conditions well, having completed a feasibility study on Koka earlier this year that foresaw average production of around 104 000 oz/y of gold for a seven-year mine life.

The government last month reached a mining agreement with the company to build Zara.

Shares in the company rose 4.7% on the TSX to end the day at C$0.335 , valuing Chalice at C$83.7-million.


Review overview
  • Dawit December 18, 2011

    We have control over the 2% “mehiweyi gibri” but not over the income generating Bisha or other mining sectors in Eritrea. We have to think about how we can impose our own sanction on PFDJ. Every Eritrean should think as to how he or she could stop the mining sectors from churning out gold and copper which will generate income for PFDJ whose primary purpose to build security apparatus to further repress, and keep Eritreans in a perpetual servitude in the name of “hagerawi agelgilot”

    • ahmed saleh December 18, 2011

      Since we do not have structural government, there is no way to get information on
      finnacial facts of the wealth. If the Ministry of commerce and National Bank have less power than some higher ups like Kisha, Generals and other corrupted individuals, our hope would be groundless and unreal. Learn from other countries of Africa with all rich minerals and how it is conserved. I know some may disagree with me but be honest
      our own corruption is there on our doorsteps. So it is the choice of you and me either to open the door or shut at the face of corrupt forces.

      • ahmed saleh December 18, 2011

        Let remind everyone. IA put us on a position of huge dept. It is
        costly and we have to pay prior to anything. All those men/women
        on national service for years, all unlawfull prisoners and other
        victims should compensate fairly. And ofcourse the familly of our martyrs too.

  • Amanuel ; birmingham December 18, 2011

    We need to contact the companies and investors to raise their awarness about the potential human right abuse and the free national service serving in their mining fields for free while PFDJ is taking advantage of the poor Eritreans.

    It will help them to put some mesures inplace to control PFDJ.

  • Cheren December 18, 2011

    The officer was completely justified in seizing the money, also refer to (EC) No 1889/2005 &

    All travellers entering or leaving the EU with € 10 000 or more in cash must
    declare the sum to Customs in order to comply with European Regulation
    (EC) No 1889/2005 in force since 15 June 2007.

  • weredemihret December 18, 2011


    Why would you think that mining companies need to be aware of the gross human rights violation of Eritreans by pfdj?
    They know it. But probably it is in not in their best interest to deal with it- they went to Eritrea knowing all the social, political realities down there with one clear objective: to make profit for their respective companies.

  • Abnet Tesfai December 18, 2011

    What makes me sick is that our natural resources are being used by the dictator and his followers for their personal benefits and to arm all illegal groups who disturb our region which is irrelevant and destructive to the Eritrean people economy in particular and to the region in general.

  • Abdi December 19, 2011

    the mining will continue production and we will keep paying the 2% plus if needed.
    Baseless” Bela belew” and worthless discussions.