Chalice Gold Mines
Limited (ASX: CHN)
Chalice Gold Mines and Sub-Sahara Resources - MERGER
UPDATE
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Sub-Sahara Scheme
Booklet lodged with ASIC.
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Funds advanced by
Chalice Gold Mines to Sub-Sahara to allow time-critical exploration activities
of the Pre-Feasibility and Feasibility Studies, due for completion by October
2009 and May 2010 respectively, at the Zara Gold Project, Eritrea.
Chalice Gold Mines Limited (ASX: CHN Chalice) and Sub-Sahara Resources
NL (ASX: SBS Sub Sahara) are pleased to provide the
following update on the progress of the proposed merger between the two
companies and the on-going work programme in Eritrea.
The proposed merger is designed to consolidated
ownership and fund ongoing development of the high-grade 944,000oz Zara Gold Project in Eritrea, East Africa, combining
Chalice’s strong cash position with Sub Sahara’s 69% interest in
the Project.
The merger, together with a separate transaction with
Africa Wide Resources Limited, will see Chalice secure an 80% interest in the
Zara Project as the basis for a long-term exploration and development strategy
in the Arabian-Nubian Shield an emerging gold and base metal
province.
Scheme Booklet and
Indicative Timetable
Sub-Sahara has advised that the Scheme Booklet in
relation to the proposed merger has been lodged with the Australian Securities
and Investments Commission (ASIC) for its review.
A revised
indicative timetable to completion of the merger is as follows:
Lodgement of Scheme Booklet with ASIC
|
2 June
2009
|
First Court Hearing
|
18 June
2009
|
Despatch of Notice of Meeting and Scheme Booklet to SBS Shareholders
|
23 June
2009
|
First Scheme Meeting
|
22 July 2009
|
Second Court Hearing
|
30 July 2009
|
Lodging
Court Order with ASIC
|
6 August 2009
|
Loan Facility
A loan facility of A$450,000
has also been made available to Sub-Sahara by Chalice to fund further
development of the Zara Project (Koka Gold Deposit)
pending implementation of the proposed merger. The funds will be used to advance
time-critical elements of the pre-feasibility and feasibility studies as set
out in the recent license renewal notification.
Funds advanced under the facility, together with
accrued interest, are repayable if the merger is not implemented by 30
September 2009 (or such later date as Chalice may agree). In this event, the loan must be repaid either
in cash or, at Sub-Sahara’s election, by the issue of Sub-Sahara shares
at an issue price of 1.3 cents per share. The facility is secured by a fixed
and floating charge over Sub-Sahara.
Immediate Work
Program
Major elements of the immediate work programme will include water drilling and hydrological
studies, metallurgical test-work, preparation for further resource definition
drilling and ongoing environmental, geological and topographic data collection.
A percussion drilling programme
to investigate potential water-bearing structures identified by targeted
geophysical surveys and drainages is planned and discussions are currently
underway with several contractors to conduct this work.
Drill core from six metallurgical holes drilled at the
Koka
deposit in 2008 is currently held by Ammtec metallurgical
laboratories in Perth and a test-work program designed by the Company’s
consultants has commenced.
A further 5,000m of drilling is required to infill the
Koka
resource and upgrade it from its current Indicated and Inferred status. It is
planned that this drilling will commence as soon as the merger between
Sub-Sahara and Chalice is completed. In anticipation of this event, work has
already commenced on site preparation.
Owner’s
Representative Appointment
Experienced Australian mining executive Mr Steven Chadwick has been appointed by Chalice as Owner’s
Representative to oversee the planned Scoping and Feasibility Studies for the
Zara Project, including the lead up to commencement of these studies.
Mr Chadwick has been
involved in the development of numerous gold mines during an extensive career
both as a consultant and in senior management roles with companies such as
Northern Gold, Normandy-Poseidon, PacMin Mining and St
Barbara Mines. More recently, he acted as Owner’s Representative for the
feasibility study and design of Barrick Mining’s Tulawaka
gold project in Tanzania.
Doug Jones Mike
Griffiths
Managing Director Managing
Director
Chalice Gold Mines Limited Sub-Sahara
Resources NL
Telephone: +61-8 9322 3960 Telephone:
+61-8 9227 3260
Website: www.chalicegold.com Website:
www.subsahara.com.au
For media inquiries, please contact:
Nicholas Read
Read Corporate
Telephone: +61-8 9388 1474
Mobile: +61-419 929 046
Competent
Persons Statement
The information in
this report that relates to Exploration Results is based on information
compiled by Dr Doug Jones, a Director of Chalice Gold Mines Limited, who is a
Member of the Australasian Institute of Mining and Metallurgy and is a
Chartered Professional Geologist. Dr Jones has sufficient experience in the
field of activity being reported to qualify as a Competent Person as defined in
the 2004 edition of the Australasian Code for Reporting of Exploration Results,
Minerals Resources and Ore Reserves, and consents to the release of
information in the form and context in which it appears here.