Vancouver — Several Canadian-based companies have been ordered to halt their exploration programs in Eritrea. According to a press release released by the companies collectively, the Eritrean Ministry of Mines gave no reason for ordering the work stoppage, though there is speculation the move was prompted by escalating terrorist attacks near the borders with Sudan and Ethiopia in the west.
Sandwiched between Sudan to the north and Ethiopia to the south, Eritrea has a land mass of only 124,000 sq. km. The economy is largely based on subsistence agriculture, with 80% of the population engaged in farming and herding.
Eritrea was an Italian colony from 1896 to 1941. Ethiopia annexed it in 1952, sparking a struggle for independence that ended in 1991 when Eritrean rebels defeated the Ethiopian forces. Independence was approved in a 1993 referendum.
Under the Eritrean mining code of 1995, a prospecting licence is valid for one year, an exploration licence agreement is valid for three years, and a mining licence is valid for 20 years or (if less) the life of the deposit, and is renewable for periods of 10 years.
The Eritrean government has a right to a 10% equity participation in an economic project, with the option of an additional 20%. Royalties of 5% on precious metals and 3.5% for metallic and non-metallic minerals, including construction minerals, are payable.
Incentives for mineral exploration and development work include low custom duties of 0.5% on imported goods used for mining operations, while profits from exploitation can be freely repatriated.
Terrorism
In 1998, a border dispute with Ethiopia escalated into a war that ended in December 2000. Eritrea and Ethiopia signed a United Nations agreement to abide by the decision of an independent boundary commission, but Ethiopia was reluctant to accept the decision.
Recent terrorist activities, including bomb attacks near the Sudanese border in March 2003, prompted the British government to issue a travel advisory.
A geologist — a British national consulting for Nevsun — was killed in an area west of Agordat in April 2003. The Eritrean government claimed that a terrorist Jihad group was responsible for his death. In May 2004, during Independence Day celebrations, a bomb went off in the main square of Barentu, 50 km from the Ethiopian border, killing 30 people and injuring many more. The attack, for which no motive has been identified, follows an earlier bomb attack on the U.N. compound in Barentu in January, and in March, there was a bomb attack in a hotel in Tesseney, near the Sudanese border. The British government warned travelers to steer clear of the region, and permits are required for visitors traveling to most areas in Eritrea.
The British government now advises against all travel to the border area between Ethiopia and Eritrea, which remains a predominantly military zone, despite the December 2000 peace agreement between the two countries. The British also warn about extensive mine fields in Eritrea, especially near the border with Ethiopia.
Nevsun
Nevsun recently ended a successful drill campaign on its Bisha project, 64 km from the border with Sudan. Many were surprised that the company did not alter its exploration plans in the country following the brutal murder of Nevsun’s geological consultant, Timothy Nutt, 49, near the Bisha project.
The company has drilled more than 31,250 metres in 195 holes for resource estimation, which was to be used for a feasibility study. The Bisha Main zone represents a volcanogenic massive-sulphide (VMS) deposit in which three areas of mineralization have been outlined: the high-grade gold oxide zones extend from the surface to a depth of 35 metres; directly below the oxide zone are the copper supergene zones, 30 metres wide, which extend to a depth of about 65 metres; and there is copper immediately below the supergene zones, with wide, high-grade zinc intercepts in primary massive sulphides.
The drilling data were being used to determine a resource estimate for each zone, which will ultimately be incorporated into a feasibility study for the Bisha Main project.
Environmental baseline studies were under way and the next round of drilling was slated for October.
Sunridge Gold
Sunridge is partnered with Sub-Sahara Resources, where resource drilling was under way at their Asmera VMS project, 150 km west of Nevsun’s Bisha copper-gold project. Sunridge can earn a 90% interest in the project from Australian-listed Sub-Sahara and Africa Wide Resources in return for financing the project through to production.
The latest results from definition drilling outline a resource that covers 200 metres of strike along the Debarwa South zone. Mineralization is open toward the Debarwa Main zone to the north.
Significant mineralized intercepts were found in all three zones. The primary zone remains open to the south, north and at depth. Highlights from the Debarwa South drilling included hole 24, which returned 22 metres grading 11.82% copper, 3.84 grams gold and 69.67 grams silver; included in that intercept were 9 metres of 17.7% copper, 6.75 grams gold and 104.46 grams silver.
Resource definition drilling at Debarwa was to be completed by the end of the month, and more targets were scheduled for drill-testing over the rest of the property. Ground-based gravity and electromagnetic surveys were under way in an attempt to outline more drill targets near the known mineralization.
Sanu Resources
Vancouver-based Sanu Resources has narrowed its African focus to two projects: one in Mali; the other in Eritrea, where it now holds eight licences.
A small team of experienced geologists had been assembled to advance the company’s acquisition strategies and exploration efforts, which included a $1-million budget to advance its Eritrea project over the next year.
Sanu was granted four prospecting licences covering 7,615 sq. km in western Eritrea in 1998; it went on to identify 20 encouraging gold anomalies.
The company suspended work between June 2000 and October 2002, owing to the armed border conflict between Ethiopia and Eritrea. The company explored the VMS potential of its Kerkebet licence area, directly adjacent to Nevsun’s Bisha gold/base metal VMS deposit.
Sanu staked and was granted four additional prospecting licences, and converted the remaining ground into 3-year exploration licences.
The company was planning to spend $1 million on airborne electromagnetic and ground geophysics, soil and rock chip sampling, mapping, trenching and drilling during 2004.
Northern Mining
The Harab Suit licences cover some 420 sq. km in northwestern Eritrea and are underlain by sedimentary, volcanic and mafic intrusive terrain cut by shear zones. The property includes the former Harab Suit gold mine, which had been developed in the late 1930s, during the Italian colonial period.
The main shear zone, which contains gold along its length, is exposed over 9 km and has an apparent width of 35-110 metres. Limited diamond drilling at the old mine site tested the shear zone at depth in 2000. One hole intersected 62 metres containing four zones of significant gold mineralization (including 6 metres of 3.5 grams gold and 5.35 metres of 3.89 grams gold) in a lower-grade envelope.
The company had outlined 11 new sites with significant gold values on which it planned to do more preliminary work to define drill targets.
The Matite licence covers 482 sq. km north of the city of Nacfa. The property is underlain by felsic volcanic tuffs in the Proterozoic Nacfa Terrain, transected by a major fault zone, and large areas are h
ydrothermally altered. The Wina Breccia comprises a 6-by-9-metre outcrop of high-grade quartz-carbonate-base-metal mineralization that returned up to 78 grams gold over 2 metres. Blasting and core drilling were planned.
The company’s adjoining Seroa and Seroa Hill exploration licences, northwest of Asmara, cover 192 sq. km. Situated along a major fault structure, they contain several hydrothermally altered areas with breccias and quartz veining. Drill testing was planned.
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