Mineral potential of Eritrea

MINERAL POTENTIAL OFTHE STATE OF ERITREAYEARLY BROCUREOF ERITREANMINERAL SECTOR2008- Facts on Eritrea- A word from His Exellency theMinister of Energy and mines- About the Department of Mines- Highlights of 2007-2008- Mining Law- Geology of Eritrea- Mineral potential of Eritrea- Future investment opportunities

Tesfai GhebreselassieMinister of Energy and MinesDear investorsI have the great honour and pleasure to bring for yourconsideration the investment opportunities that mycountry Eritrea offers in the minerals sector.Artisanal gold mining in Eritrea can be traced back toancient times: even today it is commonly practiced inwestern Eritrea. Modern mining however only startedduring the Italian rule in the late twenties of the lastcentury, when the Italian colonisers developed morethan twenty small gold mines. The development ofthe mining industry was interrupted at an early stage,at the end of 1940’s. Since then, the political andsecurity conditions necessary for the developmentof the industry did not prevail in Eritrea, until thecountry’s independence in 1991.Until now, several exploration companies have beensuccessfully operating in Eritrea. The recent announcementsmade by these companies have demonstratedthe extraordinary potential that Eritrea holds formajor mineral discoveries.This brochure aims to acquaint you with the generalgeology, known types and areas of mineralisation,and the investment opportunities and environmentof Eritrea. Brief mention is also made of the aggressiveexploration activities of several foreign companies,and some of their exciting achievements. Thereare plenty of occurrences that suggest the potentialfor the discovery of economic deposits of preciousand base metals. A variety of industrial minerals andgood quality construction materials are also availablein abundance.The Government of the State of Eritrea is aware ofthe crucial role the private sector can play in the discoveryand development of mineral resources. Themining law and policies of Eritrea provide an attractivelegal and economic environment for investors:by setting out a number of incentives, including lowroyalties of two to five percent (with the option fortheir reduction, suspension or waiver) and a nominalhalf percent duty on imported capital goods. Theholder of a mineral license is guaranteed the right todispose of minerals without export tax, and to therepatriation of after-tax profits without restriction.The law also permits financial losses to be chargedagainst gross income and to be carried forward. Inaddition, the Eritrean mining law provides simpleprocedures for the submission and processing oflicense applications.I take this opportunity to extend a personal invitationto all investors to share in the pleasure and privilegeof developing a cordial business partnership withus in mineral prospecting and development. Theparticipation of international private investment inthe minerals sector is more than welcome. The prospectivegeology, attractive investment conditions,political stability and the friendly and industriouspeople of Eritrea combine to create a rare investmentopportunity.Tesfai GhebreselassieMinister of Energy and Mines

A highly prospective countryEritrea joined the world community of independentstates in May 1993 following a thirty year war forliberaon which ended in May 1991. A UN supervisedreferendum held in April 1993 enabled theEritrean people to state unequivocally to the worldtheir strong choice for freedom and independence.Aware of the significant and vital role the privatesector has to play in the achievement of naonaldevelopment objecves, the Government of Eritreahas been commied to create a conducive atmospherefor the acve parcipaon of local and foreignprivate investors. However, since May 1998 thedevelopment of this young state has been severelycurtailed by the border dispute with neighbouringEthiopia. Despite this, the Eritrean people andGovernment are as resolute as ever in their commitmentand endeavours to work together to rebuildtheir country’s economy, and to secure social andeconomic progress.Mineral potential of EritreaLocation, climate, geographyand infrastructureThis young state is located in the north-eastern part ofAfrica with the Red Sea on its east coast, Sudan to the westand north, and Ethiopia and Djibou to the south. Eritrea,with a land surface area of about 125,000 squarekilometres, including hundreds of coral islands in the RedSea, has a populaon of about three and a half millionpeople. The country is home to nine ethnic groups, all witha strong sense of Eritrean naonal unity. Tigrinya and Tigrearethe most widely spoken indigenous languages. Englishis commonly used in the business community, while Arabicand Italian are also frequently encountered.The topography of Eritrea is exceponally varied, from the1,200 kilometre long coastal plain only a few metres abovesea level, through the central highlands ranging up to 2,500metres above sea level, to the low lying western and southwestern areas of the country. Rugged mountain chainsrun from the central plateau to the extreme north of thecountry. The climate in these different terrains correspondinglyvaries from arid, to semi-arid, to temperate. The meanannual rainfall in the coastal areas is less than 300 mm peryear, whilst in the highlands and the western lowlandsrainfall ranges between 500 and 1,000 mm.3

Mineral potential of EritreaEritrea’s infrastructure is centered on a well developedcommunicaons network linking the capital city Asmara tothe regions of the country, including the two main sea portsof Massawa and Assab, and to the neighbouring countries.Asmara and Massawa have internaonal airports, whichalso serve internal flights. Inevitably, the ravages of warhave le their mark on the infrastructure, and the reconstruconof the prime facilies has been a high priority.Telecommunicaon facilies have also been renovated anddeveloped, and mobile phones are now a common site inthe major towns.The Department of MinesThe Ministry of Energy and Mines is the authorisedLicensing Agency and is responsible for the administraon,regulaonand coordinaon of all typesof mining operaons in Eritrea. The Department ofMines within the Ministry encompasses, amongstother funcons, the Geological Survey and theMines Administraon Division, and is also itself ac-vely engaged in exploraon and mapping acvies.Even though there are several maps producedon different scales from various sources, therehave been only two geological maps, at a scale of1:250,000, compiled unl recently, when the EritreanGeological Survey prepared a 1:1,000,000 scalemap.The Eritrean mining sector has shown rapid developmentover the past few years since the Ministryof Energy and Mines started issuing licenses in 1997.Since then, several exploraon companies havebeen involved in assessing and exploring the mineralpotenal of the country. In the successive years addionallicenses have been issued on the first-comefirst-servedprinciple. The Department of Mineshas also been developing a naonal minerals database.The Ministry has a responsibility to provide preliminaryinformaon to exploraon companies interestedin conducng detailed invesgaons in Eritrea,and to make a contribuon towards enriching thegeological database of the country. As part of itsroune works, the Department of Mines throughthe Mines Administraon Division issues licenses toarsanal miners, and controls and supervises exploraonand mining acvies so that they are in linewith the direcves of the Ministry and are environmentallycompliant. In addion, the Department ofMines, through its research wing – the GeologicalSurvey – has been working, together with variousforeign governmental aid agencies and internaonalorganizaons, to carry out geological mapping andmineral exploraon.Highlights of 2007-2008The years 2007 and 2008 were high mes in themineral sector. In the past two years the major highlightswere:- In 2007 Eritrean Naonal Mining Corporaon(ENAMCO) was established. This corporaon wasestablished with a major objecve of exercising theGovernment’s free and purchased equity in mining.It is an independent body from the Ministry ofEnergy and Mines and its establishment enables theMinistry to concentrate on regulang acvies.- Establishement of Bisha Mining Share Company.This share company was formed in 2007 betweenNevsun (60%) and ENAMCO owns 40% of the totalshare.- The first Mining Agreement between the Governmentand Bisha Mining Sh. Co. was signed in 2007.This is the first of its type and involved many processesincluding negoaon. Following the signing,a mining permit was issued to the share company.- Another important event in 2007 was the transferof exploraon license from Sub-Sahara Resourcesto Sunridge Gold Corp. In the last few yearsSub-Sahara and Sunridgegold were working as jointpartners in the Asmara property that include threelicense areas (Debarwa, Medrizien and Adi Nefas).Upon the agreement between the two companiesthe transfer of the exploraon rights of the Asmaraproperty from Sub-Sahara to Sunridge was approvedby the Government of Eritrea at the end of 2007.4

Mineral potential of Eritrea- Two new exploraon licenses were also issuedto two companies. Eritrea-China mining and Exploraoncompany was granted a license in the southwestern part of Eritrea around Augaro. While anotherChinese company, Beijing Donia was grantedexploraon license at the central part of Eritrealocated north of Sunridgegold’s Asmara property.- At the beginning of 2008 a mining permit (license)was issued to Bisha Mining Share Companythat allowed the company to develop the Bishadeposit.- In the last two years different exploraon companiesfrom various countries showed interest onthe mineral potenal of Eritrea. Consequently therewere a number of visits to different parts of thecountry by experts from different countries, includingSouth Africa, India, Pakistan, Japan, Australiaand UK. All of the visits were escorted and guidedby the Department of Mines staff. Evaluaon of theapplicaons on different prospects is underway andlicenses will be granted soon.- A proposal is being made and approved for theconnuaon of the geothermal study in Alid. Accordingto the approved proposal the GeologicalSurvey of Iceland and the Eritrean Geological Surveywill, in collaboraon, conduct exploraon works atAlid which will lead to the recommendaon of drillingin the prospect.- The first dra Regional Geological Map of Eritrea,on 1:1,000,000 scale is finalized and is on theprocess of distribuon. In addion other geologicalmaps on 1:250,000 scale were also produced onspecific areas.Mining lawThe legal framework governing the conduct of allmining and related operaons within the territoryof Eritrea is embodied in a Mining Law comprising:Minerals Proclamaon No 68/1995, Mining IncomeTax Proclamaon No. 69/1995 and Regulaons onMining Operaons Legal Noce No. 19/1995, all ofwhich were promulgated in March 1995.Key Policy issues upon which the Mining Law isbased include:• All mineral resources in Eritrea are public property.TheState has a duty to ensure the conservaonand sustainable development of these resources forthe benefit of the people;• The intenon is to create a favourable atmospherefor foreign investment in the mining sector.Due recognion is made of the significant role thatforeign investment and skills can play in the developmentof this sector and the capital intensive, longterm, and risky nature of mining investments;• The necessity for formulang regulaons whichensure protecon of the natural environment, togetherwith sustainable development of the country’smineral resources, in accordance with soundprinciples of resource management and land use;The Eritrean Mining Law is up-to-date, aracveand compeve, as it provides considerable benefitsand incenves to investors. For example, thelaw provides for:• The right to exploit any commercial discoveriesmade pursuant to a valid exploraon license;• The right to sell locally or export, free of all duesand taxes and without being required to obtain anyother authorisaon or permission from any otherGovernment agency, all minerals produced pursuantto a mining license;• A simple and fair taxaon system which recognisesthe risky nature of mining investments, andhence allows:* Accelerated depreciaon (straight linemethod over 4 years) of all capitaland preproducon costs;* Write-offs of exploraon expenditure incurred anywhere in the country;* The carrying forward of losses;* A generous reinvestment deducon (5% ofgross income);* No dividend tax* A nominal rate of import duty (0,5%) on allinputs necessary for mining operaons;5

Mineral potential of Eritrea* Normal royalty rates as well as an oponfor the reducon, suspension or waiver ofthe royalty in appropriate circumstances;• Equitable foreign exchange regulaons permit• Prospecng License, valid for one year and nonrenewable;• Exploraon License, valid for an inial period ofthree years, but which may be renewed twice foraddional terms of one year each, with an oponfor further renewals in appropriate circumstances;ng;* Free and unrestricted repatriaon of earnings;* Retenon of a poron of foreign currencyearnings abroad in external accounts;* Maintenance of foreign currency accountsin banks in Eritrea.• A simple “one-stop” licensing system enablingall the formalies for all types of licenses for miningoperaons to be completed by a single Governmentagency - the Department of Mines with the Ministryof Energy and Mines.The mineral licensing systemThe Mining Law permits the following types oflicenses:and• Mining License, valid for a period of 20 years withoponal 10-year renewals.All of these licenses are exclusive and grant theirholders an automac right to obtain an Explora-on License from within a Prospecng Licenseand a Mining License from an Exploraon License,subject to the fulfillment of the obligaons underthe preceding license. Although the maximum areathat a single license can cover is fixed at 100km2for a Prospecng License, 50 km2 for an ExploraonLicense and 10km2 for a Mining License, simultaneouspossession of mulple conguous licenses ispermied.Applicaons for any of these licenses may be madeby individuals or legal enes of any naonality. Allapplicaons are to be made on specified forms thatcan be obtained from the Department of Minesof the Ministry of Energy and Mines and must beaccompanied by a nonrefundable processing (reg-6

Mineral potential of Eritreaistraon) fee of US$1 per page of each applicaonand the supporng documentaon presented. Successfulapplicants are also subject to a payment oflicense fees and the first year’s rental upon the issueof a license. The rate of these fees is governed byRegulaon and is at present as follows:LicenseLicense Fee(per license)US$(approx.)Prospecting 80 8Annual rentals(per km 2 )US$(approx.)Exploration 240 32Mining 960 967

Mineral potential of EritreaThe Geology of EritreaThe geological set up of Eritrea is made up of Precambrianbasement rocks that are overlain unconformablyby predominantly Mesozoic sedimentaryrocks and Terary to Quaternary volcanic and sedimentaryrocks.Precambrian Basement RocksBasement rocks in Eritrea cover more than 60% ofthe surface of the country. The basement rocks ofEritrea are part of the Arabian Nubian Shield (ANS)which are exposed in north east Africa (Egypt,Sudan, Eritrea, and Ethiopia) and in Saudi Arabia,northern and northwestern parts of Yemen and partof the western Middle East.The shield is believed to represent a mega suturebetween East and West Gondwana. Archean andPaleoproterozoic connental crust rocks make theolder components of the shield and occupy a verysmall part of the basement rocks and the majorpart of the shield consists of Neoproterozoic (c. 870-670 Ma)connental-marginal and juvenile intraoceanic magmac-arcrocks.In Eritrea, the basement rocks are not well studieddespite their high mineral potenal. There are onlytwo geological maps (1:250,000) prepared in thelast decade. That which covers the western partof the country (Geology of Gash River Area) andthat which covers the southern part of the country(Geology of Mai Dima/Kohain Area). Compilaon ofgeologic maps at 1:250,000 scale has recently beencompleted for four map sheets. Other study, basedlargely on satellite image interpretaon aided bylimited ground controls, suggest that the rocks canbe subdivided into four tectonic blocks or segments,separated by tectonic boundaries. Three of theseblocks, the western, central and eastern segments,underlienorthern and central Eritrea, whilst thefourth, the Danakil segment, occurs in the southeasternpart of the country.The western segment, the Barka Terrain - is exposedin thenorthwestern part of the country and underliesthe Barka lowlands. It is made up of amphibolite,amphibolite-facies polic schists containingkyanite and staurolite, quartzites and marble.The central segment, referred to as the HagarTerrain,extends from the Barka River up to theAdobha Abi valley inthe east, and comprises severallarge ellipcal bodies of various tectonic units thatare dominantly composed of oceanic and accreonarywedge materials. Occasionally, layered sequencesof chloric schists are seen, inter-layered withepidoc and chloric metabasalts, occasional thinand disconnuous marbles, and manganiferous andferruginous cherts. The Hagar Terrain displays aneast verging thrust contact with the adjacentsegment to the east. The Hagar Terrain is known tobe prospecve for chromite, planum group elements,nickel, gold and copper mineralizaon.The eastern segment- the Nakfa Terrain - is boundedby the Adobha Abi valley in the west and by the RedSea escarpment to the east. It is made up of calc-alkalinevolcanic and volcanoclasc rocks conformablyoverlain by a metasedimentary sequence of chloriteschists, grits and polymict conglomerates with occasionalpelic sericite schists and carbonates. Themetavolcanic rocks are intruded by variably deformedplutonic to hypabyssal calc-alkalinebodies. The sequence is cut in places by post-kinemacgranites and gabbros and is also transectedby several narrow shear zones sub- parallel to theregional strike. The Nakfa Terrain is considered torepresent a relict island arc assemblage. SeveralVMS (Volcanogenic Massive Sulphide) base metaloccurrences and gold showings are associated withthis tectonic unit.The southern segment - The Danakil Terrain - iscomposed of metamorphic rocks which may begrouped into three formaons:-(1) migmac hornblende biote gneisses;(2)a phyllic formaon consisng of schists, conglomeracphyllites,crystalline limestones, andgraphic schists; and(3) post-tectonic granitoids.8

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Mineral potential of EritreaRecently compiled geologic map of the whole countryat 1:1,000,000 scale has divided the Precambrianbasement rocks into 7 domains, 5 groups and 3formaons. It is rather a more detailed presentaonof the rocks units of the country.Mesozoic SedimentsThe lower Mesozoic sediments are represented bythe Merbet (Adigrat) Sandstone which outcrops inthe southern part of the country and in the Danakilarea, and is commonly intercalated with siltstonesand haemac layers. It lies unconformably overthin layers of conglomerac sandstones which, inplaces, appear to have the characteriscs of a glacialdeposit. Overlying the sandstone is the JurassicAdailo (Antalo) Limestone. This unit is exposed overa large area in the Danakil and is made up of limestonesthat are compact, partly shelly, fossiliferousand layered. Alternaons of quartzic layers arepresent in the lower part, whilst towards the upperpart the sequence becomes mainly gypsiferous todolomic. The Upper Sandstone forms pockets ofsandstones that have been preserved from erosion.Commonly this sandstone is medium to coarsegrained, light coloured, and dominantly quartzicbut partly conglomerac.Tertiary Volcanics and SedimentsThe Terary volcanics can be divided into threeunits:(1) the plateau-forming Terary basalts that arepredominantly olivine basalts with intercalaons ofintermediate lavas and tuffs;(2) the lower Afar strafied basalts composed ofbasalc lava flows and tuffs that are usually foundintercalated with sediments of the Danakil Forma-on; and(3) the Afar Basalts composed of recent lava flowsand volcanic cones, with minor acid to intermediatevolcanics, mainly trachytes, rhyolites and ignimbrites.The Terary basalts are currently acvelyexploited for aggregates.The Tertiary SedimentsThe Terary sediments lie along the Ri escarpmentand in central Afar. Three sedimentary formaonshave been idenfied: the Danakil, Dogali and DessetFormaons. The Danakil and Dogali Formaonsare of late Terary age and are composed mainly oflimestones intercalated with conglomerac sandstonesand siltstones. They are overlain by calcareoussands with coral reefs, partly consisng ofpebbles of volcanic origin, and gravels with sand, siltand clay horizons. The Desset Formaon comprisessandstones, clays and fine beds of anhydrite and haliteunconformably overlying the Dogali formaon inthe northern part of the coast, while the Red Seriescontaining coarse clasc fresh water sediments occupiesthe southern part of the coast.Quaternary SedimentsA thick evaporic formaon of bedded halite, gypsum,anhydrite, potassium and magnesium salts,with shell material fills the basin in the Danakil Depression.Deposits of sheelood terraces, silt, sandand gravel are present in some locaons occasionallycovered by windblown sands. Basalc flows andrelated spaer cones represent Quaternary volcanicacvity in the Danakil region.Mineral potential of EritreaEritrea has a long mining history that stretchesback to Biblical mes. Gold producon in Eritreawas recorded in the mes of the Pharaohs of theFourth Dynasty, and later gold mining during thePortuguese occupaon in the seventeenth centuryis also well recorded. Further evidence of the workof ancient miners is found in several places in thecountry, indicang that mining operaons were ac-ve in Eritrea long before colonial mes.Modern mining, however, began at the beginning ofthe 20th century following the Italian colonizaonof the country. Following the Second World War,mining and related operaons connued through-10

Mineral potential of Eritreaout the country, although intermiently. In the earlysevenes this resulted in the development of theshort-lived modern mine at Debarwa, before theindependence struggle forced its closure.Recent re-evaluaon of the available records onthese early operaons strongly indicates that theseoperaons were generally unsystemac and poorlydocumented. The technology and exploraon methodsemployed at the me, as well as the understandingof styles of mineralizaon have now beensuperseded. It can be expected that more mupto-datetechnology and exploraon methods willlead to the idenficaon of previously unsuspectedstyles of mineralizaon , and it is also possible thatknown deposits previously regarded as uneconomicmay prove to be economically viably with today’stechnology.Eritrea has now emerged as a demonstrated poten-al to host significant VMS deposits aer the discoveryof Bisha, Harena, and Hambok Massive sulphidedeposits in the western lowlands and koken in thenorthwestern lowland. Zara shear-hosted gold andthe recent finings in Harab Suit and Seroa prospects.Moreover, more findings such as the Embaderhodeposit, in the VMS belt of Asmara/Debarwa area,which includes Debarwa , Adi Nefas and Kena andmany other small prospects has made the countryto be known in such type of mineralizaon.Presence of a great potenal for shear hosted golddeposits is also demonstrated from the recent,shear hosted gold discovery in Zara. Here, an exploraonwork was conducted over a small area,situated along a major shear zone that runs acrossthe country. Eritrea is not well explored althoughthere are many prospecve grounds waing to bediscovered.It has a geological seng that is favourable for bothprecious metals and base metal mineralizaon, aswell as for industrial minerals. The range of idenfiedpotenal deposits covers gold and other preciousmetals, polymetallic and several base metalshosted in both massive sulphide types and quartzvein and quartz stockwork type of deposits. Thereis an indicaon of the occurrences Ni and chromiteshowings associated to the ultrabasic rocks in thefar north of the country. Occurrences of potash andsulphur evaporates in the Danakil depression, and avariety of construcon materials, including marble,granite and others in several parts of the country iswell known.GoldRecent exploraon acvies have shown that goldoccurrences Is very widespread in many part of thecountry and that the country has great potenal ingold. In addion to the previously known areas ofprimary gold occurrence in the central highland(which includes the Hamasien gold field), those ofShillalo (in southwestern lowlands) area, and thoseof southern Eritrea, exploraon acvity in the lastdecade has shown the presence of economic golddeposits in the western lowlands and also in thenorthern part of the country. Among these are goldalong with basemetals in Bisha, and gold showingsin Haykota area, southeast of Tesseney areas and innorthern Eritrea(Zara).The average head grades in most of the historic veingold mines that were acve during the Italian colonialme up to the late 1950s, were reported to beas high as 25 - 45 g/t, withreasonably good recoveries.Eritrea’s gold mineralizaon is usually hosted inquartz veins and stockworks, and in parcular inshear zones associated with felsic volcanic rocks,dioric intrusions and in various schists that arefrequently sub-parallel to the strike of the pronouncedcleavage of the host rocks. Occurrencesof gold within exhalave VMS deposits, and in theweathered and supergene zones overlying them,are becoming more evident with recent addionaldiscoveries of gold in Debarwa and Adi Nefas (in thecentral highlands), and at Bisha and Harena (in thewestern lowlands).Base Metal DepositsNNW to NNE-trending belt of gossans, exhalavecherts and Altered felsic rocks that are indicators11

Mineral potential of Eritreaof massive sulphide mineralizaon are recoded inmany parts of Eritrea. The ores of these massive sulphidedeposits are predominantly chalcocite, pyritewith minor amounts of sphalerite, chalcopyrite andbornite. A major belt of massive sulphide depositwith gold and base metal mineralizaon passesthrough Asmara and includes Debarwa, Adi Nefas,Embaderho and many other localies roughly withina 50 km wide belt over a strike length of 250 km,extending for more than 50 km north of Asmara andupto the Eritrean border to the south.A belt that includes the Bisha VMS and Harena VMSin the Western Low lands has already shown thepresence of world class deposit and is also underexploraon for more deposits. There are belt ofVMS indicaons farther nnorth of Kerkebet, Harabuitand possibly surrounding areas. There is a beltof copper mineralizaon in Raba-Semait area, sulphide-richgossanous rock in Mt Tullului(Bedeho) inSahel, northern Eritrea and in Mt Seccar and Sheibareas in the Easter Low Lands.At Bisha, a world class deposit of precious andbase metal VMS deposit has been found. Recentexploraon work in Adi Nefas VMS shows 9.0metres grading 11.91 g/t Au, 285 g/t Ag, 3.18% Cuand 11.05% Zn and in another test drill NG-043-D– 5.25 metres grading 10.81 g/t Au, 239.8 g/t Ag,6.77 % Cu and 6.77% Zn has been obtained. Reserveesmaon made recently has shown that minablezinc, copper and associated gold is present in AdiNefas.Embaderho is now emerging as a large 51 Mtonebase metals, Cu-Zn deposit with some associatedgold. Resource esmaon is sll going on, howeverat this stage it is confirmed that is big base metaldeposit.This all shows that the country is not well exploredand that it has excellent potenal for the discoveryof major base metal deposits.Industrial MineralsPotash, sylvite and gypsum-bearing evaporates occurat Colluli, south of Bada. Substanal deposit ofthe laer are found at Desset area, north-west ofMassawa. Large deposits of common salt also occurat several places along the Red Sea coast.Considerable quanes of high quality silica arefound at Merbet, which has been exploited for glassmanufacture. In addion, deposits of silica sandwith feldspar occur at various wadis of Eritrea. Highpurity feldspars occur in pegmates at Lahazen,35 kms south of Massawa. Sub economic depositsof mica, which was once exported by the Italians,are found south east of Lahazien. Large depositsof kaolin occur in the lateric horizon in parts ofTeraimni, at Adi Koteio close to Adi Kwala, Adi Keih,Zeghib, Adi Hawusha, Adi Ahderom and west andsouth-west areas of Himbir.Extensive deposits of the raw materials for cementmanufacture are found at Adailo, close to Tio withall the constuents including limestone, marl, clayand gypsum occurring close together.Barite occurrences have been idenfied around theHeneb, Meter and Gharsa wadis to the north westof Mersa Gulbub. Barite veins also occur associatedwith faults in the sediments of the Dogali and DessetFormaons. Other barite deposits of economicsignificance, with reported grades of 95-97% areknown to exist at Debarwa and Kena. Gypsum depositsare also found in the Desset plains.Construction MaterialsLarge deposits of marble occur as belts runningnorth-northeast including in the Gogne area extendingfrom Gogne to Goranda, and in the Adobha area.Other significant marble deposits occur at Aimbol,Amberbeb, and Mt Kuruku (in the upper valley ofBarka). The Kertse-Komte and Debri black and graymarble deposits occur south of Decamhare andhave been exploited for a long me. Recrystallisedlimestone deposits with variegated colours occur atDichinema area, in the southwest of Eritrea.Granites of various colours and textures are exposedover large areas. Granites of dimension stone quali-es, and which are currently being exploited, occur12

Mineral potential of Eritreaat Geleb (pink granite), and in the Arato, Korbaria,and Tukul areas (grey granite). The Mai mine graniteand Elabered granite are also suitable candidates fordimension stone.A narrow outcrop of coral limestone extends alongthe coast from the headland of Ras Kassar to thecoastline of Tio. Immense deposits of limestoneoccur in the Adailo-Atosh area south west of Tio. Anarrow outcrop of coral limestone extends northwardsparallel to the coast from Massawa up to theheadland of Ras Kassar.Geothermal acvity, evidenced by fumaroles andhot springs with extensive alteraon of the ground,are abundant in the Alid geothermal field. Studiescarried out so far in this area indicate that thepresence of a possible sub-surface high temperaturereservoir. The geothermal manifestaons at Nebroand Dubbi are also promising, but further study willbe required to esmate the reservoir temperature.Geothermal PotentialThe possibility of the economic exploitaon of thegeothermal potenal for power generaon occursin the ri area, associated with volcanic acvity.Alid, Nebro, and Dubi are the main target locaonswhere geothermal acvity is known to be intensive.Lower temperature acvity also occurs at Mai Wuui,30 kms west of Massawa.13

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Mineral potential of Eritrea15

Mineral potential of EritreaCURRENT LICENSES STATUSCurrently there are six companies who are acvein Eritrea. These companies are Bisha Mining Sh.Co., Sub-Sahara Resources (Eritrea), SunridgeGold(Eritrea), Sanu Resources, Eritrea-China Sh. Co. andBeijing Donia. The spaal distribuon of their properesinclude Central, Western, South western andNorthern Eritrea.Bisha Mining Share CompanyFollowing the issue of Mining agreement, BishaMining Share Company has started civil works construconin Bisha. With all perming requirementslong in place and much of the detailed design workcompleted the project is well advanced. Construc-on of housing and infrastructure for around 450people has already started. Heavy earthmoving forthe main process plant will begin shortly. Much ofthe machinery and equipment for the Project hasalready been procured, including the main grindingmills. Mining will commence mid-2009 and the Processplant will be delivering gold in the first quarterof 2010 aer a capital expenditure of around US$250 million.Producon will be:• Gold (Years1&2)• Copper (Years 3 to 5)• Copper (Years 6 to 11)400+ thousand ouncesper year78,000 tonnes120,000 tonnes• Copper (Years 6 to 11)20,000 tonnesSunridgegold Corp (Eritrea)Sunridgegold Corp (Eritrea) is currently working onits Asmara properes that consists of three licensesthat surround the capital city of Asmara namely Debarwa,Adi Nefas and Medrizien. Extensive explora-on program including ground geophysics, geologicalmapping, geochemical surveys and drilling areunderway on all the properes.Environemntal baseline studies have already beenstarted a Scoping study on the large newly discoveredcopper-zinc-gold Emba Derho VMS deposit inunderway which is expected to be compeleted inOctober 2008. As part of this study in July 2008 ascoping study workshop was given to governmentofficials and experts from different ministries. Priorto this, public consultaons were conducted to variousvillages and this is sll ongoing.Sub-Sahara Resources (Eritrea)Sub-Sahara has been acvely exploring inEritrea for the past eight years. The inialproperes that Sub Sahara secured containedthe volcanogenic massive sulphide(VMS) prospects surrounding the capitalcity of Asmara. The Debarwa Cu/Zn/Au/Agdeposit was successfully advanced to a‘Scoping Study’ for mining before the en-re land package was sold to joint venturepartner Sunridge Gold Corp in 2007. During2007, Sub Sahara accelerated explora-on acvies on its Zara Gold Project (inthe north-west of the country) and wasrewarded with definion of a +1moz golddeposit (Koka) grading 6.31g/t, in early 2008. TheKoka Gold Deposit is now in development for miningthrough a Pre-Feasibility Study.Work to date at the Zara Project includes over17,000m of diamond drilling, independent resourceesmates by Coffey consultaon firm, metallurgicaldrilling and test-work, structural studies with fol-16

Mineral potential of Eritrealow-up drilling, petrographic studies, aquifer development,an environmental baseline study, groundbased chargeability and resisvity geophysical surveys,regional geochemical sampling programmesand high resoluon digital terrain modelling.Sanu ResourcesSanu conducted 518 m diamond drilling and geophysicalsurvey on its newly discovered massive sulfidegossan trend in the Koken area of its KerkebetRiver exploraon license. This area is 85km northSanu’s Hambok discovery and appears to be an en-rely new district. The mulple gossan occurrencescrop out over a strike length of 4.5km with the individualgossan zones up to 11m wide in outcrop andup to 400m long. Zones of massive barite mineralizaonup to 5m wide as well as disseminated baritein gossan occur toward the northern end of thetrend. Preliminary rock chip analyses of more than80 gossan outcrop samples from the trend returnedvery strongly anomalous values in the majority ofsamples in gold, copper, zinc, lead and barium withpeak assay values of 20.1, 8.9, 4.7 g/t for gold, copper0.36%, zinc 0.3% and lead 0.47%. It has drilled 9holes and the results are pending.On its Mogoraib exploraon license Sanu has intersectedmassive sulfide style mineralizaon on its Aderatprospect 5km north of its Hambok deposit. The1070m of diamond core drilled at Aderat to date arepart of a larger drill program to test the “Hamboktrend”, a significant geophysical feature defined byanomalous gravity and EM, and geology.Eritrea-China Sh. Co.This company is one of the two companies recentlygranted exploraon license. It has started its exploraonworks at Augaro.Beijing DoniaBeijing Donia Co. has also started exploraon worksat Defere, located north of Asmara.Future investment opportunitiesThe future of Eritrea’s mining industry appearsbright. The prospecve geology of the area togetherwith an aracve and compeve investment regimemakes Eritrea one of the most aracve andrewarding mining investment opportunies.Results of the exploraon acvies conducted inthe last ten years have proved the high mineralpotenal of the country, and that invesng in Eritreais rewarding. Although all areas of exploraon areprospecve, the following are believed to be moreprospecve for investment.Gold Prospects in South-Western andWestern EritreaThe south-western part of Eritrea is one of the mostprospecve gold regions in the country. It containshundreds of small historic mines and operaonsthat were acve during the Italian occupaonincluding the Augaro mines which was reportedlythe most producve mine in Eritrea. There are alsoareas where arsanal gold mining is currently beingundertaken by the local people. Most of these mineralshowings and historical mines and old workingsare associated with rocks of: the Augaro-Antore beltand Bisha VMS and Hykota-Fanco belts.Deposits in the Augaro-Antore BeltThe Augaro-Antore belt is situated in the southeasternpart of Western Lowlands of Eritrea. It stretchesfrom the border in the south to the Barka River tothe north where its extension is masked by intrusions.Localies known for gold in the lowerAugaro-Antore belt include Augaro, Damishoba,Dase, Tokombia, Ranyo and Doboro. The Augaromine appears to have been developed on a seriesof quartz veins and stringers, some showingsulphide mineralisaon and formed in a low-pressureregion associated with a regional shear zone.The mineralised system is known to extend for adistance of 2,900 metres, of which only about 35017

Mineral potential of Eritreametres was mined. The main quartz vein, about240 metres long, and having an average width of10 metres, ends in a stockwork of stringers. Themain en-echelon system extends over a strike lengthof 300 metres with widths of 20 – 30 metres. Therecovered gold grade is reported to have been 30– 40 grams per tonne and producon during theperiods 1933 – 1941 and 1955 – 1956 is recorded at874 kg, although it is widely believed that the actualproducon was greatly in excess of this esmate.The mine was closed in 1941 due to war and all itsmining equipment was removed. It was re-openedbriefly in 1955 to re-treat the tailings. Other interesnglocalies in this belt that reached produc-on include Damishoba, Dase, and Ranyo. Doboro,Tokombia and others were sll at the developmentstage, involving ping and underground explora-on, when the Italian occupaon ended in 1941. Inthe southern part of the belt operaons at Antoreand Damanoshila, and in the eastern zone of theBerbere River, all were at various stages of developmentbefore the Second World War. In the northernpart of the belt, at Suzena, prospecng started in1932, and mining was carried out from 1937 – 40.Dri on three levels were developed, but work wasabandoned on the fourth level due to water problems.Gold has also been discovered by the local arsanalminers at a number of places in recent mes. Theseare indicaons of the high gold potenal of the area.Deposits in the Bisha VMS BeltBased on regional works and satellite image interpretaon,the Bisha VMS and associated volcanosedimentarybelt is esmated to have a maximumwidth of about 30 kms and extends for more than100 kms to the south, while its northern extensionis not clear. This belt is believed to be highly prospecveand may connue for a substanal distanceto the north as well as to the south. In addion,records of past exploraon in this area indicatethat quartz veins with varying gold contents havebeen reported from some locaons including Okere(Okreb). Some of these were prospected and exploitedbefore mining stopped due to WWII.Gold & Base Metal Prospects in SouthernEritreaThere are indicaons of the connuity of the Asmara/DebarwaVMS belt for long distance to the south.Outcrops are known of gossanous rocks, exhala-ves and rock assemblages (felsic and mafic) suchas those of the Debarwa area, in the Kena area.There are also many places where local people areconducng arsanal mining. The area west of Kenacould represent another belt of mineralizaon, asthere are areas of recently discovered arsanalworkings south of Monsura area, that are its northernextension.Gold & Base Metal mineralisation in NorthernEritrea.There are indicaons of gold and basemetalmineralizaon in several parts of northern Eritrea.Old workings and prospects, of Italina me arefound in Seroa and Arruba in Harab Suit. There is aCu-mineralizaon along a belt that passes throughRaba and Semait areas where old workings arefound. Gossanous rocks running for hundreds ofmetres occur in Halibet area in farther north.Recent exploraon acvies and the work of arsanalminers in Zara and other areas to the north isindicang the presence of auriferous quartz veinsand stock works in many areas in this part of thecountry.In conclusion, it can be said that mineralizaon inmost part of the country is not well studied. It maybe far more complex and extensive than is apparent.The level of technology and understandingof mineralizaon styles that prevailed during theItalian occupaon was low, and most of the historicmines and old mining operaons in Eritrea wereinterrupted because of the Second World War. Theinvestment climate that existed at the me of thestruggle for independence that followed was alsonot conducive to the development of these opera-ons. It is therefore, no doubt that this part of theregion deserves comprehensive exploraon.18

Mineral potential of EritreaFor further information contact:Ministry of Energy and MinesDepartment of MinesP.O.Box 272Asmara,EritreaTel: +291-1-202889+291-1-202843/44Fax: +291-1-124509To find other Useful information on Eritrea,please check these sites:-www.shabait.comwww.shaebia.comwww.dehai.org19

© 2008 Ministry of Energy and Mines