Sheba Exploration (UK) plc
LSE : SHE

March 30, 2010 02:00 ET

Una Deriam Exclusive Exploration License

                                                                             GB00B02WHQ80/GBP/PLUS-exn
                                                                                           30/03/2010
                                                   
                                      Sheba Exploration (UK) Plc
                                      ("Sheba" or the "Company")
                                                   
The Directors of Sheba Exploration (UK) Plc ("Sheba"), a PLUS-quoted Gold and Base metal explorer, are
delighted  to  announce  that the Company has been awarded an exclusive exploration  licence  for  Una
Deriam in Ethiopia, effective from 19 March 2010 for a period of three years.

The  Una Deriam Exclusive Exploration License covers 95 square kilometres and is located approximately
55  kilometres north-northwest of Mekelle, the regional capital of Tigray State in northern  Ethiopia.
Una  Deriam consists of parts of the former Mereto EEL, the Una Deriam EPL, the Mai Sheket EPL and the
Dongwar  EPL.  The  collective area of this new license incorporates all the  significant  geochemical
anomalies  and  gold mineralized occurrences of the earlier license areas, and forms an exciting  gold
target over a length exceeding 10km.


Geology and Gold Occurrences

The  Una  Deriam Property is underlain by greenschist grade metamorphic rocks of volcanic  to  clastic
origin.  Sheba has defined a 5 kilometre long arcuate gold soil anomaly in the northern  part  of  the
license,  which has been intersected in 6 percussion drill holes and numerous trenches. Mineralization
occurs  in  the  wallrock to quartz vein swarms. Further south, the company has  defined  a  new  soil
anomaly, which is 1.3 kilometres long and open to the south. The two anomalies appear to form part  of
a common regional scale mineralizing event and the style of mineralization is the same.

At  least  ten  primary  gold  occurrences, most of which host  active  artisanal  miners,  have  been
identified on the Property. The distance between the northernmost occurrence (Adi Gonche) and Dashetan
in  the  south,  is about 10km. Only the northern part of the license has been covered by  geochemical
sampling,  and  in places in only limited detail. Soil sample results from a survey in the  south  are
pending arrival.

Adi Gonche
The Adi Gonche occurrence is underlain by a one kilometre long by 500 metre wide soil anomaly and sits
along  a  prominent north-south shear zone which follows the Werei River. Trenching has been completed
with  narrow intersections reaching 2.0 metres grading 5.7 grams of gold per tonne (including 1  metre
grading 9.8 grams of gold per tonne).

Tsasarat
At  Tsasarat  there is a marked gold soil anomaly covering about 20 hectares overlying a  granodiorite
stock.  A  granite-hosted, intrusion-related gold setting is being modelled,  similar  to  the  multi-
million ounce gold deposit at Sukari in Egypt and the Tulu Kapi gold deposit in western Ethiopia.  The
Amora  Hill occurrence is one of two main targets that make up the Tsasarat Prospect, situated in  the
north-east  corner  of  the Property. At Amora Hill, exploration has focused on  narrow  discontinuous
quartz  veins that carry high grades locally and display ancient mining activity from observations  of
fire setting in gulleys and stopes, which clearly follow structural (vein) directions. Drill hole MKP1
intersected  3  metres  grading  1.2 grams of gold per tonne from  5m  below  surface.  Drilling  also
intersected  underground  workings,  causing  one of the  holes  to  be  abandoned.  The  best  trench
intersections include 3.9m metres grading 3.92 grams of gold per tonne and 4 metres grading 2.24 grams
of  gold  per  tonne - the highest grade channel rock samples reached up to 25 g/t. Important  channel
intersections include the following:

    Trench number         Gold intersection
         MK1               0.9m at 9.74 g/t
         MK1               0.9m at 6.41 g/t
         MK6               3.9m at 3.92 g/t
         MK8               2.0m at 3.13 g/t
         MK9               2.0m at 2.65 g/t
        MK10               4.0m at 2.24 g/t

Ndaba Shekena
This  is  the  most important prospect, where the discovery trench, ML3, gave an assay  of  40  metres
grading  1.3 grams of gold per tonne at surface. There are a number of other similar trench intercepts
as shown below:

    Trench number        Gold intersection
         ML2               6m at 1.04 g/t
         ML3               34m at 1.51 g/t
         ML4               6m at 2.22 g/t
         ML4               8m at 2.25 g/t
         ML4               2m at 3.01 g/t
         ML5               28m at 1.8 g/t
         ML5               8m at 3.5 g/t
         ML6               4m at 1.5 g/t
         ML6               2m at 3.4 g/t
         ML6               4m at 1.5 g/t
         ML6               10m at 1.0 g/t
         ML6               2m at 3.48 g/t

Gold  mineralization  appears  to be associated with thin quartz veins sub-parallel  to  the  regional
foliation  as well as along the selvedges of larger cross-cutting quartz vein sets. Folding along  the
Ndaba  Shekena  prospect  indicates  a  potential  for  hinge  zone  and  fold  limb  controlled  gold
mineralization. In 2006/07, Sheba completed a 6 hole (300 metre) RAB percussion drill program  at  the
Ndaba Shekena target.  Percussion drill hole MLP1 intersected 21 metres grading 1.5 grams of gold  per
tonne  from  6 to 26 metres below surface (including 1m @ 8.5 g/t) while drill hole MLP3,  located  20
metres  up  dip,  intersected 7 metres grading 2.63 grams of gold per tonne from 1 to 8  metres  below
surface (including 1m @ 11.3 g/t). These intercepts are shown below.

 Hole number     From depth        intercept       Gold assay         Higher grade
                                                                     intercept (m)
    MLP1             5m               21m           1.50 g/t         3m at 3.75 g/t
    MLP1             41m              7m            0.72 g/t                
    MLP3             1m               7m            2.63 g/t         5m at 3.45 g/t
    MLP4             22m              7m            1.29 g/t                
    MLP5             14m              4m            2.02 g/t                
    MLP6             4m               4m            0.87 g/t                
                                                   
Adi Gefa
Results  from  a detailed rock geochemical survey carried out at the Adi Gefa occurrence  showed  that
gold intersected in trenches results from a stockwork style of mineralization, with gold occurring  in
multi-aged, quartz vein sets and associated silicified metavolcanics. Results include 8 metres grading
2.3  grams  of gold per tonne and 6 metres grading 3.7 grams of gold per tonne from trenches  at  this
locality.  The average grade of all the rock samples using a 1 g/t cut-off was 3.9 grams of  gold  per
tonne.

Teska
Three  trenches  were dug to the north of Teska River over a strong section of the gold  soil  anomaly
(see  summary below of best intersections). Trench intercepts of 22 metres grading 0.7 grams  of  gold
per  tonne,  4 metres grading 1.0 grams of gold per tonne and 8 metres grading 1.4 grams of  gold  per
tonne  revealed  underlying bedrock mineralization associated with quartz  and  phyllite.  Across  the
river  is Teska South where the gold soil anomaly continues for at least 500 metres towards the south,
with peak values of 340 ppb and 350 ppb and two artisanal gold diggings.

     Trench number             Gold intercept
          MX2                  6m at 3.7 g/t
          MX3                  8m at 2.3 g/t
          MY2                  22m at 0.7 g/t
          MY2                  4m at 1.0 g/t
          MY3                  8m at 1.4 g/t

Eastern
This  area  crosses the main road and trends for about 1 kilometre in a NNW direction, with peak  soil
anomaly  of  660 ppb at the north end. A small E-W quartz vein grab sample returned over 13  grams  of
gold per tonne on the road cut. Further north, along strike of the soil anomaly is trench 1N where  an
intercept of approximately 10 grams of gold per tonne over 2m was reported in 1998.

Datalian
A  detailed  soil  geochemical survey at Datalian, still not complete, shows  a  strong  gold  anomaly
trending for over 1 kilometre associated with a number of small artisanal workings and old prospecting
works  of  an  early 20th century Italian mining syndicate. The peak soil value of  over  7300ppb  and
several others over 1000ppb point to significant bedrock gold mineralization at the south end  of  the
anomaly.  The  locality has not been trenched yet by Sheba, but the average of  all  seven  rock  grab
samples taken in the area is 1.9 grams of gold per tonne (no cut-off), with a maximum of 6.1 g/t.  The
Italian  Syndicate dug an adit, now collapsed, into a ridge of phyllite and quartz,  and  cut  several
trenches across the ridge. About two hundred metres to the south is the west flowing Bereh River,  one
of the major gold panning tributaries of the Werei River Goldfield.

Igni Imba
South of the Bereh River is the locality called Igni Imba, close by the locality of Datalian - a  rock
sample  from Igni Imba Hill, which appears to be a lamprophyre intrusion, returned 0.5 grams  of  gold
per  tonne  and  another close by in quartzite returned 0.23 grams of gold per tonne.  NNW  from  this
locality is a soil anomaly anomaly peaking at 350ppb.

Adi Heza
The Italian syndicate dug a narrow adit into the side of a hill at this locality, located 2km SSW from
Datalian. Sporadic artisanal gold digging is said to take place on or around some of these hillocks.

Dashetan
A soil survey has recently been carried out at this locality and results are pending. Here there is an
artisanal  mining site superimposed on what appears to be an ancient mining site. A rock  grab  sample
returned 5.3 grams of gold per tonne confirming the presence of gold in quartz veins at this locality,
while  many other grab samples returned traces of anomalous gold. For almost 2km northwards from  here
runs a ridge hosted a number of small artisanal gold workings, including Da'arbata Ankiss, Tonkul  and
Mai  Reha.  The ridge is a zone of possible primary gold mineralisation, judging by the  gold  panning
going on in streams that flow from its flanks.

Other gold occurrences in the area: Mai Sheket, Dongwar.
Further  to  the south of Dashetan, on the old Dongwar EPL, and further to the east, on  the  old  Mai
Sheket  EPL,  Sheba  has  identified several small primary gold digging  occurrences,  artisanal  gold
panning  sites  in streams and anomalous gold content in stream sediment, soil and rock samples.  Only
reconnaissance mapping has taken place in these areas to date and soil sampling of likely gold targets
is planned in future.

Copper, Lead and Zinc occurrences
There  are several occurrences of malachite in schist on the licence area which indicate the  presence
of  accessory copper. Minor galena and sphalerite, minerals of lead and zinc have been encountered  in
quartz. These base metals frequently occur together with gold.


Historical work at Una Deriam by Sheba during period 1999 - 2009

Approximately 150 rock and stream sediment samples were taken from the Adi Seraw, Mereto, Dongwar  and
Maisheket  EPLs  forming the far north, northern, southern and eastern extents of  the  licence  area,
respectively, in 1999-2001. On the basis of all these sample results the Werei Goldfield  was  roughly
defined  and  the  boundaries of the current licence now include its most significant  parts.  In  the
period  1999-2008,  Sheba  collected over 1,200 soil samples, drilled 460  metres  of  percussion  and
trenched approximately 2,500 metres, nearly all of them from the area forming the northern part of the
licence area (Mereto). In 2008-2009, Sheba collected 142 sediment samples and 204 soil samples in  the
central part of the Una Deriam EEL. In addition, 39 rock samples were collected.


Potential of the Una Deriam EEL
As  a  result  of  the  Una Deriam license being a composite of previous exploration  and  prospecting
licenses,  the entire 95 sq km property is highly prospective. Much of the area is underlain  by  gold
geochemical  anomalies,  hydrothermal alteration, small sites of artisanal digging  and  many  of  the
rivers  and  streams  are panned for gold. Gold prospects are strung out along  a  trend  line  of  10
kilometres,  generally down the centre of the licence area. The northern part - which  has  been  soil
sampled  in  more detail - shows strong gold anomalism over a wide area. 1611 soil samples  have  been
taken  by  Sheba and of these, 695, or almost 43% of the samples, equal or exceed 30ppb and 5%  exceed
300ppb.  The  soil anomaly has been tested at numerous localities with thousands of rock samples  from
trenches,  outcrop and boreholes. The grade and thickness of mineralization encountered together  with
the  high  incidence of artisanal workings confirm that Una Deriam is one of the most  important  gold
prospects in Tigray.

The infrastructure and power supply in this region of Tigray is excellent and continues to improve.  A
new  hydro-electric power dam was recently completed on the Tekeze River, a tributary of the Nile. The
electricity  grid now extends onto the Property in the south-east corner. In addition a  second  power
line  extends  to within 1km from the north-east corner of the Property, while a third line  is  under
construction to the village of Nebelet, located 6km to the west side of the Property.

In the forthcoming year, Sheba will continue to add value to Una Deriam by carrying out more extensive
soil  sampling and also detailed investigation by means of rock sampling, trenching and  RAB  drilling
over many of the gold prospects on the licence area.


The  Directors  of  Sheba look forward to updating shareholders with further developments  during  the
year.

The Directors of Sheba Exploration are responsible for the contents of this announcement.

Enquiries:

Contact Details:
Sheba Exploration (UK) Plc
Richard Brooker                                                  Tel: 00 353 87699 8401

St Helens Capital Partners LLP                                   Tel: 0044 020 7368 6959
Mark Anwyl or Duncan Vasey









                                                   

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