Chalice Gold Mines Limited
TSX : CXN
ASX : CHN

Chalice Gold Mines Limited

April 12, 2011 07:00 ET

Chalice Gold Mines Limited Quarterly Activity and Cashflow Reports

PERTH, WESTERN AUSTRALIA--(Marketwire - April 12, 2011) - Chalice Gold Mines ("The Company") (TSX:CXN)(ASX:CHN) advises that its Activity and Cash Flow Reports for the quarter ended March 31, 2011 have been issued today. The full texts of the Reports are available at the Company's website www.chalicegold.com and under the Company's profile at www.sedar.com.

Highlights:

  • New drilling programs to commence in April at the Zara Gold Project in Eritrea targeting additions to the current 840,000oz Indicated Mineral Resource after completion of near mine and regional exploration activities during the March Quarter.

  • Drilling will initially test several attractive new targets revealed by a recently completed Induced Polarisation (IP) survey undertaken over the Koka-Konate corridor.

  • Significant new soil anomaly (>50ppb) identified at Hamid Keir (Zara North) which extends over a strike length of 1,400m and is up to ~ 120m wide, with soil gold values ranging up to 23,000ppb and 29,500ppb.

  • Two new Exploration Licences granted in Eritrea:

    • Mogoraib North EL (555km2), 10km north of Nevsun Resources' world-class Bisha gold and base metal deposit.

    • Hurum EL (275km2) which adjoins Zara South and straddles the same major regional structure hosting the Koka Deposit.

  • Initial exploration program involving geological mapping, geochemical sampling and an airborne magnetic, radiometric and electro-magnetic (EM) survey using the VTEM system set to commence at Mogoraib North.

  • Airborne magnetic and radiometric survey completed over Zara and Hurum Exploration Licences.

  • Commercial discussions progressed with ENAMCO to agree the terms and purchase price for the acquisition of their 30% paid participating interest in the Zara Project.

About Chalice Gold Mines Limited:

Chalice Gold Mines Limited, based in Western Australia, owns 100% of the strategically positioned 615 square kilometres Zara Project in Eritrea, East Africa. Chalice has completed a Feasibility Study, with development targeted to commence in 2011. The Government of Eritrea has the right to acquire, at fair value, a 30% interest in the Project in addition to a 10% carried interest.

In addition to the Zara project, Chalice has recently been granted a number of major exploration licences totalling more than 1,000 square kilometres. All of the new licences are in the proximity of the Zara Deposit and the world-class Bisha Deposit and share the same geology.

Chalice's exploration tenure remains virtually untouched by modern exploration, with numerous artisanal gold mining sites, gold geochemical anomalies presenting numerous targets for immediate follow-up. Based on these targets and others being generated by an active exploration program, Chalice expects to quickly build on its existing Koka gold resource to maximise the project's economic potential.

Chalice has a Board of Directors and management with a wealth of expertise in the mining and exploration sectors both in Africa and Australian. The robust gold resource at the Koka Deposit and the potential for further gold and base metals discoveries within the Company's tenure places Chalice in an excellent position for rapid future growth.

All material information on Chalice can be found on the Company's website at www.chalicegold.com or at SEDAR at www.sedar.com.

DR DOUG JONES, Managing Director

Competent Persons and Qualified Person Statement

The Mineral Resource estimate was prepared by Mr. John Tyrrell who is a Member of the Australasian Institute of Mining and Metallurgy. Mr. Tyrrell is a full time employee of AMC and has sufficient experience in gold resource estimation to act as Competent Person as defined in the 2004 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code)' and is a Qualified Person under National Instrument 43-101 – 'Standards of Disclosure for Mineral Projects'. Mr Tyrrell consents to the inclusion of this information in the form and context in which it appears.

Sampling Procedures and Quality Assurance

Soil samples are collected from sites located using GPS. Soil material is collected from a depth of 5-20cm with a plastic trowel and sieved to 180µm mesh using stainless steel sieves. Approximately 120 grams of material is placed into two small Kraft paper sample bags, sealed and tagged with a unique number, with both bags being numbered identically. One of these samples is sent to NATA-accredited Intertek-Genalysis Laboratories in Perth Western Australia for assay whilst the other sample is retained as a duplicate in the Chalice Eritrea sample storage.

Samples are analysed for multi-element suites using ICP-OES after aqua regia digest on a 25g sub-sample and vacuum filtering prior to voluming to preclude errors resulting from insoluble residues. Au is analysed as an additional element utilizing Graphite Furnace AAS. Chalice Gold Mines inserts field blanks, field duplicates, repeats and certified reference materials (CRMs) into its sample sequences sent to the routine and umpire laboratories to control the accuracy and reliability of the analytical results.

Blank samples are introduced at the rate of 1 per 20 to 25 routine samples to test contamination during sample preparation. Certified reference materials (CRMs) are submitted with all sample batches at the rate of 1 per 20-25 routine samples. The CRM's inserted have values ranging from very low to high grade. 5% of the returned coarse reject samples are routinely submitted to an umpire laboratory (Ultra-trace Laboratories, Perth, Western Australia) to test the analytical precision of the principal laboratory. Standard samples are included at a rate of 1 per 20 routine samples and there is at least one standard per submission. The Company monitors the QA/QC information to ensure there are no systematic biases or overall analytical quality issues.

Rock-chip samples are collected and assayed in essentially the same manner except that the sieving step is omitted and 1-2 kg of sample is collected and bagged in a heavy-duty plastic bag before dispatch to Intertek-Genalysis Laboratories.

Diamond drill core is logged and photographed prior to splitting with a core saw. One half of the core is retained on site whilst the other half is bagged and dispatched to Africa Horn Preparation facility (a division of NATA-accredited Intertek-Genalysis Laboratories) in Asmara for crushing to -2mm and splitting. As per the above, certified reference materials (CRMs) are submitted with all sample batches at the rate of 1 per 20-25 routine samples. The coarse reject is stored and the split sub-sample is pulverised to a nominal 95% passing -75 micron using an LM2 pulveriser.

The pulverised pulp is further spilt into two 100g to 150g sub-samples; a primary pulp sample is sent for analysis and a duplicate pulp sample is kept as a reference and the remaining fine (75 micron) reject is stored. A quartz wash is pulverized between samples and is stored for random testing of preparation contamination.

The sample pulps are transported by air to NATA-accredited Intertek-Genalysis Laboratories in Perth Western Australia for assay. For drill core and RC samples used for resource analysis the majority of gold assaying is completed using a lead collection of 50g fire assay method with an atomic absorption spectroscopy (AAS) finish. Additional specified multi-element assays are carried out by ICP-OES on 25g sub-sample prepared using aqua regia digest. Bulk density determinations using water immersion method are carried out on every metre of core within expected mineralisation and every 10m within waste zones. QA/QC monitoring is applied to all drill core assays as per the protocols described above.

Forward Looking Statements

This document may contain forward-looking information within the meaning of Canadian securities legislation and forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995 (collectively, forward-looking statements). These forward-looking statements are made as of the date of this document and Chalice Gold Mines Limited (the Company) does not intend, and does not assume any obligation, to update these forward-looking statements.

Forward-looking statements relate to future events or future performance and reflect Company management's expectations or beliefs regarding future events and include, but are not limited to, statements with respect to the estimation of mineral reserves and mineral resources, the realization of mineral reserve estimates, the timing and amount of estimated future production, costs of production, capital expenditures, success of mining operations, environmental risks, unanticipated reclamation expenses, title disputes or claims and limitations on insurance coverage. In certain cases, forward-looking statements can be identified by the use of words such as plans, expects or does not expect, is expected, budget, scheduled, estimates, forecasts, intends, anticipates or does not anticipate, or believes, or variations of such words and phrases or statements that certain actions, events or results may, could, would, might or will be taken, occur or be achieved or the negative of these terms or comparable terminology. By their very nature forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such factors include, among others, risks related to actual results of current exploration activities; changes in project parameters as plans continue to be refined; future prices of mineral resources; possible variations in ore reserves, grade or recovery rates; accidents, labour disputes and other risks of the mining industry; delays in obtaining governmental approvals or financing or in the completion of development or construction activities; as well as those factors detailed from time to time in the Company's interim and annual financial statements and management's discussion and analysis of those statements, all of which are filed and available for review on SEDAR at sedar.com. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements.

Accordingly, readers should not place undue reliance on forward-looking statements.

Shares outstanding:218 million
Fully diluted:225 million

Contact Information

  • Chalice Gold Mines Limited
    Mr Tim Goyder
    Executive Chairman
    (+618) 9322 3960

    Chalice Gold Mines Limited
    Dr Doug Jones
    Managing Director
    (+618) 9322 3960
    +618 9322 5800
    info@chalicegold.com
    www.chalicegold.com

    For media inquiries, please contact:
    Read Corporate
    Nicholas Read
    (+618) 9388 1474

    For North American Investors, please contact:
    Joanne Jobin
    647 964 0292
    jjobin@chalicegold.com