A colony for 50 years, federated , Unified to Ethiopia , in 1991's seceded after three decades of rebellion. Since 1998 Eritrea is at War, harboring proxy warriors especially the notorious Al- Shabab. Torture ,imprisonment , thousands fleeing, no religious freedom , the only university is closed, everybody is in the army, No Parliament, No election, No functioning institution, No free press & all living journalists are in prison. Eritrea is called the North Korea of Africa.
Saturday, January 7, 2012
Chalice Gold to Sell Eritrea Project to China SFECO Group | Gold Investing News
Chalice Gold (TSE:CXN,ASX:CHN) has agreed to sell its 60 percent interest in the Zara gold project in Eritrea to China SFECO Groupfor $100-million, subject to approval of shareholders and due diligence to be completed by the middle of March. The company will not solicit or be involved in negotiation of its share in Zara pending the completion of SFECO’s due diligence. The Zara project includes the Koka deposit that has a resource of 840,000 ounces of gold. Last June, the company sold a 30 percent stake in Zara to the Eritrean government for $32-million also offering the State-owned miner Enamco a 10 percent interest.
According to the project’s feasibility study, the mine is estimated to reach average production capacity at 104,000 ounces of gold per year with a cash cost of $338 per ounce of gold. The Koka gold mine is expected to begin production by the end of next year. Chalice said it would still own other Eritrean prospects following the sale of Zara, including a land package immediately north of the Bisha mine currently owned byNevsun Resources (TSE:NSU, AMEX:NSU).
Chalice Chairman Tim Goyder said successful completion of the Zara Project sale, “would put the Company in an attractive position with a substantial cash balance, enabling it to pursue other opportunities in Eritrea and around the world.” The Eastern Africa nation is known by some gold investors with as many as 12 international companies exploring or operating in the country in gold or base metal projects. The sub-Saharan country is bordered by the Red Sea on the East, Ethiopia in the south and Sudan in the west.
In December the United Nations issued sanctions to Eritrea’s government, which are less harsh than resolutions for Gabon and Nigeria. The first proposed sanctions would have banned foreign firms from investing in Eritrea’s mining industry, outlawed imports of its minerals and sought to block payment of a tax Eritrea puts on remittances from its nationals abroad. Although Eritrea appears to be on the brink of a minerals boom that could provide a considerable economic tailwind, its large remittances from Western and Middle Eastern diasporas are the country’s biggest resource of foreign exchange.
Large merger and acquisition appetite across the gold sector to continue
Bill Ainley, Senior Partner at Davies Ward, forecasts a similar amount of merger and acquisition activity over the next year. With gold companies demonstrating the second highest level of acquisition within all activity last year, “it’s really hard to predict activity in 2012. There are so many potential risks in the system but clearly there are some good valuations if you think of long term commodity price outlooks. It may really be a strong year in M&A.”
Optimism abounds for gold price outlook
Jack Bouroudjian, Chief Executive Officer of IndexFuturesGroup.com, told CNBC, “on the upside depending on the velocity of the situation in Europe. If they can get their act together quicker than we think they can and they start to print up some euros, we could see a $2200 or $2300 level in gold next year. Remember that gold and silver move dramatically this year. The moves that we saw earlier in the year, especially in silver were unparalleled in some cases. Those are what we call warning signals to the marketplace.”
Securities Disclosure: I, Dave Brown, hold no direct investment interest in any company mentioned in this article.