Presented by Tesfai Ghebreselassie
Minister of Energy and Mines

The State of Eritrea
AreaLocation

124,000 km² including about 350 Red Seaislands
Horn of Africa.

Sea Coast

1,200 km coastline along the Red Sea

Population

Approximately 3.5 million

CapitalAsmara

Main Ports

Massawa and Assab

Currency

Eritrean Nakfa (ERN): 15 Nakfa = US$1

ClimateVaries with altitude :Temperate central highlands plateau;
Hot and humid Eastern lowlands; andHot and arid Western lowlands.

Time zone

GMT + 3

The PeopleHistory of Mining in Eritrea●●●●Artisanal gold mining has been practiced since thetimes of the Egyptian Pharaohs.
Modern gold mining started duringthe
Italian colonial rule -1891-1941 With
more than 20 small gold mines priorto WW-II.
Post WW-II Eritrean political and security conditions
hindered the development of the mining sector.
The Liberation of Eritrea in 1991, followed by theNational Referendum that resulted in Independence
in 1993, created a new opportunity for the proper
assessment of the national mineral resources andthe development of strategies for their extraction.

The Geology of Eritrea- Precambrian basement rocks
Greenstone proterozoic rocks underlie >60% of the land area
- Mesozoic sediments
Outcrop in southern parts of the country and in the Danakil- Tertiary volcanics and sediments:
Tertiary plateau basalts
Lower Afar stratified flows
Afar basalts-Quaternary Sediments. Far from satisfactory exploration. Favourable for hosting metallic and non metallic minerals. Portrayed by the discovery of VMS deposits (Bisha, Debarwa, Emba Derho Adi
Nefas), Gold discoveries at Zara and Adi Nefas Gupo and other advanced projects

Airborne Geophysics coveredKnown Mineral Occurrences
The geological setting is prospective for:•

Shear hosted gold deposits•

Volcanogenic Massive Sulphides (VMS)•Base metals in quartz vein settings•

Evaporites•

A variety of construction materials and industrialminerals●

Currently mining activity is at a very early stage andits contribution to the national economy is negligible.

Key Policy Issues
●
●

●

●

●

All mineral resources in Eritrea are state property.
The Government aims to a sustainable development of
the minerals sector.
Adherence to internationally accepted mining industry
practices and application of modern technology andmethods of mitigating negative environmental and social
impacts are cardinal requirements.
The crucial role of foreign investment in mineral
exploration and extraction and transfer of technology andknowhow is recognised and encouraged.
National Mining Company will hold Government interests
in mining operations.

Incentives for Investment
The right to exploit commercial deposits discovered
under a valid exploration licence is guaranteed by
the Mining Law.
● The licensee has the right to sell locally or export
free of duties and taxes, all minerals it produced.
● A simple and fair taxation system is applied.
●Income tax from mining operations - 38%
Nominal import duty (0.5%) on all inputs necessary formining operations– Royalty rates 3.5 for base metals and 5% for precious
metals, with the option of waivers in special conditions– No tax on dividends––

...Incentives for Investment●●

The right to carry forward operational losses
and deduct them from gross incomes isguaranteed.
Equitable foreign exchange regulations
permit:The Licensing System●

Prospecting License – valid for one year and nonrenewable
Size of one license = 100 Km2●

Exploration License – valid for an initial period of
three years, may be renewed twice for additionalterms of one year each
Size of one license = 50 Km2●Mining License – valid for a period of 20 years with
optional 10 year renewals
Size of one license = 10 Km2

License Fee
License Type

License fee inUS$(per license)

Annual Rentals in US$(per KM2)

Prospecting

80

8Exploration

240

32

Mining96096

Mineral Exploration and Mining in EritreaCurrently active mining and exploration companies:
 Bisha Mining Share Company (ENAMCO & Nevsun Resources Inc)
 Bisha,Sunridge Gold Corporation

 Debarwa, Adi Nefas, Embaderho

Sanu Resources Inc Kerkebet,

Mograib

Sub Sahara Resources/Dragon Zara

Beijing Donia Resources

Woki-Defere, Kenatib

Eritrea-China Exploration and Mining sh. Co.
 Augaro

..........Mineral Mining and Exploration in Eritrea

Bisha Mining Licence has been granted.

 Construction for Mining has started already.

Debarwa, Adi Nefas and EmbaDerho are likely tobe developed soon
 EmbaDerho
 Scooping study finishedAugaro, Woki and others

 Exploration works including drilling is underway

2,000,000mR

CURRENT STATUS OF LICENCES

NNN

Sunridge Gold Corporation (Exploration)
Sanu Resources (Exploration)
Bisha Mining Sh.Co. (Mining)E

1,900,000m

DDragon Mining NL./Sub-Sahara (Exploration)
Eritrea-China Exploration & Mining Sh. Co. (Exploration)
Beijing Donia Resources Co.,Ltd

1,800,000m

Area to be retained

Dahlak Archipelago
Area to be reduced

Existing Sanu's Kerkebet
License Area Boundry
BMSC's Mining
Agreement Area

1,700,000m

SE

050

100Km.

A
1,600,000m

1,500,000m

N.B. Coordinates are in UTM - WGS-84,
Northern Hemisphere - Zone 37
1,400,000m

200,000m300,000m

400,000m

500,000m

600,000m

700,000m

800,000m

900,000m

1,000,000m

1,100,000m

1,200,000m

Major Activities of the Companies

Bisha Mining Share Company•Has started civil works on construction and the detailed design
work completed the project is well advanced.
• Construction on of housing and infrastructure for around 450
people has already started. Heavy earthmoving for the mainprocess plant will begin shortly. Much of the machinery andequipment for the Project has already been procured, including
the main grinding mills. Mining will commence mid-2009 and
the Process plant will be delivering gold in the fi rst quarter of2010 after a capital expenditure of around US$250 million.

Bisha Mining sh. Co.
Bisha Project

Production on will be:●●●●

Gold (Years1&2) 400+ thousand ounces peryear
Copper (Years 3 to 5) 78,000 tonnes
Copper (Years 6 to 11) 120,000 tonnes
Copper (Years 6 to 11) 20,000 tonnes

Sub-Sahara Resources• Focused on the Zara Gold Project• Drilling (17,000 m of diamond)• Metallurgical drilling• Structural Drilling• Water search drilling• Petrographic Studies• Environmental Baseline Study• Ground based IP/Resistivity Survey• Regional Geochemical Sampling

–––High Resolution Digital Terrain Model
Resource Estimates by independent consultant company
Coffey Mining, at Koka - +1moz gold deposit grading
6.31g/tPreparation underway towards pre-feasibility study
Road Constructionand Drillingat ZaraSunridgeGold
Asmara project – Debarwa, Adi Nefas andEmbaDerho• Ground Geophysics – Gravity and EM• Geochemical Sampling• Detail Geological Mapping• Diamond Drilling• Environmental Baseline study on the wholeproperty• Scoping Study on EmbaDerho Deposit• Organizing Public Consultation and Workshopsto stakeholders

Resource estimates:- Debarwa: ~2MT (cutoff1.0% Cu)
Adi Nefas: ~2.7 MT (cutoff2.0% Zn)

Total contained Metal in Indicated Mineral Resource at Emba
Derho
ZONE

Cut-off
gradeMillions
TonnesMillions
Pound Cu

Millions
Pounds Zn

Thousand
Ounces Au

Millions
Ounces Ag

Gold Oxide

0.2g/t Au

3.506

5394.40.58

Copper Rich
Primary

0.5%Cu38.425

862

835

228

11.5

Zinc Rich
Primary

1.0%Cu20.545

127

1,064

258

862.476

993

1,902

580

20.1

Sanu Resources• Focused on Kerkebet and Hambok which areclose to Bisha deposit.
• Geophysical Surveys and dimaond drilling(518m) on koken area drilling returned
encouraging results.
• Detail Geological mapping, Geophysical Surveysand Drilling (1070m) at Aderat – Mogoraib• Encouraging results from assays on trenchsamples and in Mogoraib massive sulphide
deposits have been intersected.

Drilling at Hambock (Sanu)

Eritrea-China Sh. Co.
• Exploration works that include tunnel sampling are
underway in Augaro• Drilling is Ongoing
Beijing Donia Co. (Woki, Defere and Adi Kenatib)• Exploration for iron and copper• Geological mapping• Geochemical sampling• Rock chip samplingAugaro Historical Gold Mine (ECEM)

Geothermal Energy There is promising potential for the exploitation ofgeothermal energy (Alid, Nubro, Dubi, etc.)
 Different exploration works have been conducted so far:
 Regional Geology and Hydrogeology of Nubro-Dubi) Detail Geology (lineation and structural maps) andhydrogeology of Alid Area
 Preliminary geophysical survey (Resistivity) in Alid Area
 Chemical analysis of water samples from Dubi, Nubroand Alid areas
 Looking forward for next stage - drilling

DARERE FUMAROLE

ILEGEDI BUBBLING POOL

Investment Climate andOpportunities in the Mineral Sector
Highly prospective geology● Several open areas for licence application● Liberal Mining Law● Strong Government commitment to develop theMinerals sector in partnership with foreign
investors● No “unlicenced miner” problems● Strong anti-corruption Government stance●I welcome you to be our partners in thedevelopment of ourrich but yet untapped Mineral resources.

THANK YOU