Syrah Resources (ASX: SYR) has signed a term sheet with Aramis Resources Limited to acquire an 80% interest in three large strategically located Ethiopian gold exploration projects. Syrah will acquire the stake via the payment of US$1.5 million over 3 payments spread across 2 years, the issuing of 25 million shares and up to 5 million options, and the expenditure of $2.5 million on the projects within 3 years. The prime exploration ground covers an area of 2,000 square kilometres and gives Syrah access to a great diversity of assets with mineral exposure in an exciting geological terrain in Africa. New mining laws, political stability and significant resource potential with little modern exploration, make Ethiopia an attractive place to explore. Shareholder approval for the deal will be sought at a general meeting to be held shortly. The ground consists of three project areas at Nejo, Dawa and Moyale. The project areas are all located in areas of significant gold mineralisation in the west and south of the country in East Africa. The areas are underlain by the Arabian / Nubian Shield which is host to major gold deposits in Saudi Arabia, Egypt, Sudan and Eritrea, as well as Ethiopia. Significantly, active artisanal workings have been noted on all of the project areas with some occurring at a significant scale. The Nejo Project contains four granted tenements covering 771 square kilometres in western Ethiopia, located immediately north of Nyota Minerals Limited’s (ASX:NYO) Tulu Kapi Project (currently 1.2 million ounces in resources). The Nejo project area has never been subject to modern exploration. The Dawa Project contains two granted tenements covering 1,000 square kilometres along strike and to the south of the privately owned Lega Dembi Mine in southern Ethiopia. Lega Dembi is reported to have produced 3 million ounces of gold over the past 20 years and is still producing at a rate of greater than 100,000 ounces per year. The Dawa tenements are located on the major regional fault structure that is associated with the Lega Dembi deposit. The Dawa area has also never been subject to modern exploration. Moyale contains one granted tenement covering 440 square kilometres in the extreme south of the country. Small zones of high grade mineralisation associated with quartz veins in intrusives have been mined at a small scale on the licence at the Chamuk Prospect. Drilling has shown that there is good potential for resources to be outlined. Ethiopia is considered a dynamic emerging economy welcoming to foreign investment and is among the top five countries in GDP growth. The country revised its mining laws in 2010 to promote the development of natural resources. There is exemption from duties and taxes on equipment, carrying forward of losses and corporate tax holidays. Also, the company said abundant green energy production is expected over the next five years. Syrah Resources shares rose 31.25% to $0.105 in intraday trading today.

Source