Chalice Sold Zara Gold Project to SFECO and ENAMCO for US$114M

Development News

Chalice Gold turned Red after selling its lucrative Zara Gold Deposit in Eritrea to China

Zara Gold


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 percent interest in the Zara Project (in addition to its 10 percent 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 crystallized 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.