China Eximbank provides $107 million loan for Koka Gold Mine Project

Project narrative

In July 2013, China Eximbank and Zara Mining Share Company (ZMSC) signed a $107 million loan agreement for the Koka Gold Mine Project. The borrowing terms of the loan are unknown. The proceeds of the loan were used to partially finance a $145 million EPC contract with Shanghai Corporation for Foreign Economic & Technical Cooperation (SFECO). ZMSC is a joint venture that is owned by SFECO (60% equity) and the state-owned Eritrean National Mining Corporation (ENAMCO) (40% equity). The purpose of this project was to develop the Zara gold mine, which is located in the Elababu shear zone between the Nakfa terrane and the Adobha Abiy terrane in northwest Eritrea. It involved the construction of a processing plant, a mine village, and service stations for fuel, water and electric power. With a mine life of seven years, the 44 million ton gold deposit contains a JORC-compliant indicated resource of 5 million tonnes of ore at 5.3g/t Au and is expected to produce up to 850,000 oz of gold with 93% recoveries. SFECO was the contractor responsible for implementation. A formal groundbreaking ceremony was held on September 25, 2013 and the project was officially completed on January 22, 2016.