BLOCK 9 PROSPECT
above: quartz-sericite-carbonate alteration zone at Unko locality
The first known gold exploration in the Unko area took place in 1903, under a concession granted to the Italian Syndicate for the Over-Mareb by King Menelik II of Ethiopia. During this period at least three adits were driven into outcrops of schist and quartz.
In recent times the Unko area was conceded to a joint venture between Ashanti Goldfields and Ezana Mining Development between 1995 and 1998. The exclusive licence area covered approximately 53 square kilometres and had common boundaries with Sheba's Mereto and Mai Sheket properties, located to north and east. Sheba acquired the mineral rights to 14.4 square kilometres of the JV concession area on February 11th, 2004, and incorporated this area into the Mereto EEL. The acquisition consolidates the best known primary gold occurrences in the upper Wereii River valley under one exclusive licence, the mineral rights to which are owned 100% by Sheba.
In June 2003 Sheba signed a farm-in agreement with Ezana Mining Development plc, holders of the first option rights to the Ashanti Concession. In return for data and access to the area, Sheba will reimburse Ezana its previous exploration costs by means of a 2% royalty on any gold produced from the area and guarantees the latter company a equity share in the project, to be paid from its past or future exploration credits. The first phase of the project was to digitise existing gold in soil data and merge it with data from the Mereto EEL. The second phase, involves checking trench positions by GPS and re-interpreting the hard rock gold data. Preliminary interpretation shows a gold trend grading over 10 metre gramme/tonne which can be traced for three kilometres in a north-south direction. This trend has been followed by artisanal gold workings which follow veins of quartz embedded within graphite-sericite schist. There are three distinct prospects which have been recognised to date:
1. Chaholo (or Ndaba Schekena). This prospect has the best trench intersection on the concession area: if sufficient strike or plunge can be proved, it has the potential to be an important gold target. 1.82 g/t of gold was measured over a trench width of 21.6 metres, using a cut-off of 0.5 g/t. Wall rocks are also mineralised at low grade. Host rocks are sericitic metasediments. Intensive panning occurs in the Chaholo Stream several 100 metres to the north. In June 2005 trenching was initiated at this prospect and results are currently awaited.
2. Adi Gefa. This prospect is marked by many small artisanal gold workings and one fairly deep excavation. It is 1.5 km south of Chaholo. Trench intersections of 0.98 g/t over 10 metres and 1.22 g/t over 10 metres have been recorded (cut-off 0.5 g/t). Host rocks are graphitic phyllites with abundant intrafolial quartz veins.
3. Unko. This prospect was discovered by soil geochemistry; artisanal workings are not in evidence, suggesting fine grained gold. An intersection of 5.48 g/t over 4 metres has been recorded (cut-off 0.4 g/t). The host rocks are graphitic sericite schists with quartz veins. Unko occurs 2km south-east of Adi Gefa.
Soil geochemistry links these three prospects and follow-up trenching is called for; spacing of trenches was previously 400 metres and could be closed to 50 metres at least. It is noteworthy that the Legadembi Mine in South Ethiopia is hosted by graphitic metasediments and quartz veins, and the Sukari Mines in Egypt are similarly associated with graphitic metasediments. Both gold areas are located in the same continental scale gold/tectonic belt as Mereto.
A new track has recently been built, giving access to Adi Gefa by vehicle. The next stage will be to link this to the prospects north and south and define a target zone. It is anticipated that any future drilling campaign will include a number of gold occurrences located within a 6 x 4 km rectangle which includes all the know prospects of the Mereto EEL. The combined resources of these prospects might be extractable as a single resource.
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