Gold in Eritrea

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Geology

Volcanogenic massive sulphide (VMS) Cu-Zn-Au-Ag deposits and gold mineralization in albite-sericite altered mafic volcanics at Melhoy and Adi Kelbay

• Nevsun Resources Ltd (Canadian, AMEX:NSU; TSX:NSU, operates the Tabakoto/Segala Mine in Mali, also active in Ghana) is developing the Bisha deposit. It has proven and probable open-pit ore reserves of 20,08 million t ; an oxide zone of 4,02 million t grading 7,99 g/t Au, a supergene zone of 6,35 million tons grading 0,83 g/t Au and 4,40% Cu and a primary zone of 9,71 million t grading 0,76 g/t Au with 1,14% Cu and 7,21% Zn. Life of mine (10 years +) gold production is estimated at 1,06 million oz. Nevsun is also exploring the area covering the Augaro and Damiscioba mines which were the largest operating gold mines in Eritrea during the 1930's when they were under Italian management. The China Import-Export Bank will lend $60-million to Eritrea so that its State-owned mining firm can buy 40% of the Bisha gold mine from Canada's Nevsun Resources, the Ministry of Commerce said in November, 2007. Nevsun Resources Ltd. announced in October, 2007, that the Eritrean National Mining Corporation would buy into the Bisha gold mine at fair value. The government of Eritrea has awarded a mining licence for the Bisha gold and base metals project, Nevsun Resources said in January, 2008.
  The company, together with the State-owned Eritrean National Mining Company, which owns 40% of the project, would now seek finance for the project, Nevsun said in a statement.
  The mine is expected to cost $250-million to build, and the Bisha Share Mining Company,which owns the project, would be “actively seeking” debt finance for its development.
  The licence is a key milestone for the company, which was ordered by the Eritrean government to halt exploration at the project in 2004.
  The firm was allowed to resume operations in the country in early 2005, after agreeing to allow the government to buy a 30% interest in the project, on top of the free 10% interest it receives according to the country's law.
  “The government of Eritrea continues to show its strong support to the redevelopment of mining as an important sector of its national economy,” Nevsun said.
  Construction of the Bisha mine is expected to take 24 months, a Nevsun spokesperson said in December, 2007.
  The company expects to produce 471 000 oz of gold during the first year of operation at Bisha, and 424 000 oz in the second year, at a cash cost of $150/oz.
  Copper production will begin in the second year, and peak at 184-million pounds of copper in the fifth year of operation.
  The mine will begin producing zinc in its sixth year.
  

• Sunridge Gold Corporation (Canadian) is exploring VMS deposits at Debarwa, Adi Nefas and Emba Derho, as well as the Gupo gold deposit. Previous drilling at Gupo has outlined an inferred gold resource of 1,965 million t at a grade of 2,99 g/t Au or 189 000 oz of gold. In January 2007 Sunridge was going to implement the following drilling program: Known Deposits: Emba Derho zinc, copper, gold VMS deposit: 10,000 metres in-fill and 5,000 metres exploration and extension drilling. Currently 103 holes have been drilled over a strike length of 900 metres, a width up to 300 metres and a depth of approximately 300 metres. Assays have been reported for 71 holes and further assays for holes 72 to 103 will be reported as received by the Company. Debarwa copper, gold, zinc VMS deposit: 400 metres for water well and geotechnical drilling. An independent resource estimate was expected by January 2007 and a Preliminary Assessment Study by mid-February, 2007. Adi Nefas zinc, gold, copper VMS deposit: 2,000 metres for in-fill drilling and a down-hole EM conductor program. An independent resource estimate was expected in January 2007 and a Preliminary Assessment Study by mid-February, 2007. New Targets: Kodadu VMS target: 4,000 metres exploration drilling. To date, seven holes have been drilled and assays will be reported as received by the Company. Adi Moussa VMS target: 2,000 metres exploration drilling. Large gravity anomaly produced by recent regional gravity survey adjacent to known mineralized outcrop. Adi Rassi VMS target: 1,000 metres exploration drilling. Large gravity anomaly produced by recent regional gravity survey adjacent to known mineralized outcrop. Adi Lamza VMS target: 1,000 metres exploration drilling. Large gravity anomaly produced by recent regional gravity survey adjacent to known mineralized outcrop.

• Sanu Resources Ltd (SNU.V)has four prospecting licenses (Guluj, Fanco, Kerkebet, and Dieba River) in western Eritrea.

• Northern Mining Explorations (MDN) holds a 75% equity interest in Eritrean Minerals Corporation ("EMC"), an Eritrean corporation holding mineral rights in Eritrea. The remaining 25% of EMC is owned by African Minerals Incorporated, a local Eritrean exploration company founded and controlled by Dr. Seife Berhe, an Eritrean geologist. EMC holds 100% of three exploration targets in Eritrea, comprising: The Harab Suit exploration licenses, covering an area of approximately 205 km² located in the north west of Eritrea, within mixed sedimentary, volcanic and mafic-ultramafic intrusive terrain. The property contains several outcropping shear zones, and includes the abandoned Tamanti Gold Mine developed in the late 1930's during the Italian colonial period. This mine was developed on a large ridge underlain by outcropping sheared and altered quartz porphyry diorite, containing pervasive quartz veining and pyrite-chalcopyrite disseminations. The main shear zone of interest outcrops for a strike distance of 9 km and has an apparent width of 35 to 110 m. Geologic mapping indicates that this shear contains gold mineralization at various intervals along its length. During May and June 2006, MDN Northern Mining completed a program of 37 reverse circulation drill holes on two targets for a total of 3,029 metres. The Seroa Hill exploration license is located to the north of the important town of Keren, northwest of the Eritrean capital Asmara, and covers 14 km². Within the license there are a number of areas of intense hydrothermal alteration, breccia formation and quartz veining. The main area of interest is centred on the Enjahai gold-polymetallic occurrence. The Matite license covers 25 km² to the north of the town of Nacfa and is underlain by a sequence of Proterozoic felsic volcanic tuffs. The area has no history of previous significant exploration or mining. The main gold occurrence of interest is the Wina Breccia discovered by EMC, which consists of a small 6x9 m outcrop of very high grade quartz-carbonate-base metal mineralisation within a mafic to intermediate composition dyke at the contact with silicified felsic volcanic tuffs. Sampling carried out in 1998 confirmed the very high-grade nature of the gold mineralization with values up to 78 g/t over 2 m and even higher grab samples.

• Sub-Saharan Resources (Anvel Mining has an 18% stake in Sub-Saharan Resources) is exploring the Zara gold project in Eritrea which covers an area of 196 square km and is situated in northern Eritrea approximately 160 km northwest of the capital city, Asmara. The estimated resource is 760,000 oz of gold.

• Eritrea awarded gold, iron and base metal exploration licenses to Chinese companies in October, 2007.
  A license for the country's Augaro gold mine was granted to Beijing Donia Resources Co and Eritrea-China Exploration and Mining Share. The company was formed earlier in 2007 as a joint venture between the state-owned China National Geological & Mining Corporation and the Eritrea National Mining Corporation.