UPDATE: Chalice Gold to Sell Remaining 60% of Zara Gold Project; Shares Drop 24% As Gold Prices Weigh
Chalice Gold Mines (CXN.TO) announced today that it has entered into a conditional shortform agreement to sell its remaining 60% stake in the Zara Project in Eritrea to China SFECO Group, a subsidiary of Shanghai Construction Group Co. Ltd.
The company said that under the agreement, SFECO will pay US$80 million in cash for Chalice's share of the mineral resource at the Koka gold deposit. In addition, SFECO will pay Chalice a further sum, not to exceed US$20 million for the balance of the area falling within the Zara Project.
CXN shares started the session lower at 31 cents but has further dropped to 26 cents, about 24% lower than the 34 cents December 23 close, after gold prices reportedly dropped to $1589.8 an ounce.
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