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Last updated on April 19, 2014 at 12:41 EDT

Chalice Gains Exposure to Two Prospective Exploration Projects in Australia

September 25, 2013

Symbol:  ASX: CHN TSX:  CXN

Shares outstanding:    251 million

Fully diluted: 259 million

PERTH, Western Australia, Sept. 25, 2013 /CNW/ – Chalice Gold Mines Limited (“Chalice”) (ASX:CHN; TSX:CHN) is pleased to announce two transactions as part of the execution of a
second leg of its corporate strategy, targeting high quality, “drill
ready” targets in prospective low risk mineral provinces.

Chalice’s primary focus remains on securing a cornerstone asset,
leveraging off its cash position of approximately $57 million following
the sale of the Zara Gold Project in Eritrea late last year. Chalice’s
experienced technical team is targeting high quality mining projects
globally with strong cash flow generation potential, and has made good
progress in reviewing and prioritising robust, lower risk projects for
further evaluation.

“Whilst our search for a cornerstone asset is progressing well, where we
have definitely seen the quality of opportunities available improving
significantly over the last 6 months, the Board has approved a second
leg to Chalice’s strategy in order to take advantage of the ongoing
tightness in the equity markets and the decline in drilling costs, by
targeting a limited number of high quality, “drill ready” exploration
opportunities on a deal by deal basis”, said Managing Director Bill
Bent.

“There is a unique opportunity in the market at the moment to gain
exposure to some of the best and most prolific mineral provinces in
Australia and other low risk jurisdictions, with a clear pathway to a
controlling position, without significantly impacting our cash position
or limiting our ability to execute on our primary strategy of acquiring
a cornerstone asset.”

“The transactions we are announcing today provide Chalice shareholders
exposure to two high quality exploration plays, both with potential to
host significant deposits, for an initial funding commitment of
$500,000 via a placement in GeoCrystal Limited to explore the Webb
Diamond Project, and a non-binding commitment of $800,000 with Uranium
Equities Limited (“Uranium Equities”) to undertake the first phase of
exploration on the Oodnadatta and Marla IOCGU Projects.”

Webb Diamond Project – 10 per cent Placement in GeoCrystal Limited

Chalice has agreed to subscribe for 3,333,333 shares and 3,333,333 free
attaching options in unlisted public company GeoCrystal Limited
(“GeoCrystal”) at an issue price of $0.15 ($500,000). Following the
placement, Chalice will own 10.1 per cent of the issued and outstanding
shares of GeoCrystal. The options are exercisable at $0.20 each and
expire on 30 September 2015. In addition, GeoCrystal has granted
Chalice an option to acquire a further 2.1 million shares at $0.20 per
share on or before 29 March 2014, which if exercised would increase
Chalice’s stake to 19.9 per cent on a fully diluted basis. Chalice has
been granted a conditional first right of refusal on future financings
until its stake has reached 51 per cent of GeoCrystal.

GeoCrystal is earning into 70 per cent of Meteoric Resources’ interest
in the 400km2 Webb Diamond Project in Western Australia, which has the
potential to be a large kimberlite field. More than 80 discrete
aeromagnetic anomalies with the potential to be kimberlite pipes have
been identified within the project area (see Figure 1). Seven of these anomalies have been tested by single vertical drill
holes. Five of these holes terminated in altered kimberlites, with the
remaining two holes failing to reach bedrock.  Detailed analysis of
diamond indicator minerals obtained from the drilling suggests that a
small proportion of the mineral grains tested were sourced from the
upper mantle under conditions considered to be favourable for diamond
formation (the diamond stability field).

The funds being contributed by Chalice will enable GeoCrystal to
undertake a further 1,500m to 3,000m of air-core drilling to test up to
20 additional magnetic anomalies and undertake detailed analysis of the
mineral chemistry from each pipe for diamond indicator minerals.  In
addition, larger 50kg loam samples will be collected on a broad sample
grid over the entire field and analysed for indicator minerals and
microdiamonds. Drilling is expected to commence shortly, with this
phase of exploration work expected to be completed by the end of
December.

Refer to Meteoric Resources’ (MEI) ASX releases for further details on
the Webb Diamond Project.

Oodnadatta and Marla IOCG Projects, SA – Farm-in Joint Venture with
Uranium Equities

Chalice has entered into a farm-in joint venture agreement with
ASX-listed Uranium Equities Limited (ASX: UEQ) over its Oodnadatta and
Marla Projects in South Australia (the “O&M Projects”) (see Figure 2). The farm-in agreement gives Chalice the right to earn up to 70 per
cent of both projects by sole funding a total of $5.5 million in
exploration expenditure.  Chalice may earn an initial 51 per cent by
sole funding $2.5 million, but there is no minimum spend required
before withdrawal.

The O&M Projects comprise 16 granted Exploration Licences totalling
7,746km2 in the under-explored northern margin of the Gawler Craton (see Figure 3).   Both projects are in a province with high iron
oxide-copper-gold-uranium (IOCGU) endowment that hosts deposits such as
Olympic Dam, Prominent Hill and Carrapateena.

The Marla Project straddles a major suture zone between the Gawler
Craton and Musgrave Block.  Significant coincident magnetic and gravity
features have been identified within a west-northwest trending
structural corridor.  A detailed ground gravity survey was completed in
2011 comprising 2,000 stations over an area of 1,612km2 at between 500m
and 1km spacings.  The gravity survey identified several high priority
target areas where gravity and magnetic anomalism coincide in areas of
complex structural interactions. Preliminary depth modelling at Marla
estimates these magnetic anomalies at less than 400m, making the
targets very compelling when compared to other parts of the Olympic Dam
Province. 

The Oodnadatta Project tenements lie along and adjacent to the Peake -
Denison Ranges, which include the Peake Metamorphics and the
Wirriecurrie Granite. A review of existing geophysical data over the
Oodnadatta Project has identified a number of significant coincident
magnetic and gravity features with only limited gravity coverage over
the highest intensity magnetic anomalies.   An initial ground gravity
program covering the most prospective targets is planned to provide
depth and targeting information for a drilling program.

The total spend for the first stage of exploration to be conducted over
the next 12 months is $800,000 and will include at least 2,000m of
combined rotary mud and diamond drilling on the Marla Project designed
to test coincident gravity and magnetic targets potentially indicative
of IOCGU mineralisation, and a ground gravity survey over the
Oodnadatta Project.  Drilling is expected to commence in the October
quarter, 2013.

Tony Kiernan and Tim Goyder are Directors of both Chalice Gold Mines
Limited and Uranium Equities Limited. As such they have been excluded
from all negotiations, decisions and approvals in relation to this
transaction.

Competent Persons and Qualified Person Statement

The information in this news release that relates to exploration results
is based on information compiled by Dr Doug Jones, a full-time employee
and Director of Chalice Gold Mines Limited, who is a Member of the
Australasian Institute of Mining and Metallurgy and is a Chartered
Professional Geologist. Dr Jones has sufficient experience in the field
of activity being reported to qualify as a Competent Person as defined
in the 2012 edition of the Australasian Code for Reporting of
Exploration Results, Minerals Resources and Ore Reserves, and is a
Qualified Person under National Instrument 43-101 – ‘Standards of
Disclosure for Mineral Projects’. The Qualified Person has verified the
data disclosed in this release, including sampling, analytical and test
data underlying the information contained in this release. Dr Jones
consents to the release of information in the form and context in which
it appears here.

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,
except as required by law or regulation.

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 realisation of mineral reserve estimates, the likelihood of
exploration success, 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, as well as those factors detailed from time to time in the
Company’s interim and annual financial 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.

Appendix 1 – Oodnadatta & Marla Project JORC Tables

According to Clauses 18 & 19 of the 2012 JORC Code, the criteria listed
in the following tables need to be addressed when first reporting
exploration results.

Section 1: Sampling Techniques and Data

     _____________________________________________________________________
    |JORC Criteria           |Explanation                                 |
    |________________________|____________________________________________|
    |Sampling techniques     |No sampling has been conducted to date.     |
    |________________________|____________________________________________|
    |Drilling techniques     |No drilling has been conducted to date.  It |
    |                        |is planned to undertake                     |
    |                        |rotary mud drilling with diamond tails.     |
    |________________________|____________________________________________|
    |Drill sample recovery   |Due to no previous drilling, no samples have|
    |                        |been recovered.                             |
    |________________________|____________________________________________|
    |Logging                 |Due to no previous drilling, no drill       |
    |                        |samples have been logged.                   |
    |________________________|____________________________________________|
    |Sub-sampling            |As per above.                               |
    |techniques and          |                                            |
    |sample preparation      |                                            |
    |________________________|____________________________________________|
    |Quality of assay data   |Due to no previous drilling, no samples have|
    |and laboratory tests    |been assayed.                               |
    |________________________|____________________________________________|
    |Verification of sampling|Due to no previous drilling, no samples have|
    |and assaying            |been verified.                              |
    |________________________|____________________________________________|
    |Location of data points |It is intended that future drillhole collars|
    |                        |will be located using a hand                |
    |                        |held Garmin GPS MAP62s with an accuracy of  |
    |                        |<3m. Down-hole surveys                      |
    |                        |using Reflex downhole camera or similar is  |
    |                        |planned for future holes.                   |
    |________________________|____________________________________________|
    |Data spacing and        |Planning of drill hole collar positions     |
    |distribution            |relative to the geophysical targets to      |
    |                        |be tested is still in the planning stage.   |
    |________________________|____________________________________________|
    |Orientation of data in  |No drill data has been oriented relative to |
    |relation to geological  |structure.  Orientation of                  |
    |structure               |diamond core tails is planned for future    |
    |                        |drill holes.                                |
    |________________________|____________________________________________|
    |Sample security         |Due to no previous drilling, no samples have|
    |                        |been collected.                             |
    |________________________|____________________________________________|
    |Audits or reviews       |Due to no previous drilling, no audits have |
    |                        |been conducted.                             |
    |________________________|____________________________________________|

Section 2:  Reporting of Exploration Results

     _____________________________________________________________________
    |JORC Criteria         |Explanation                                   |
    |______________________|______________________________________________|
    |Mineral tenement      |The Marla Project includes a total of 7       |
    |and land tenure       |granted exploration licences totaling 2,886 sq|
    |status                |km. Licences                                  |
    |                      |are held by GE Resources Pty Ltd, a wholly    |
    |                      |owned subsidiary of Uranium Equities Limited. |
    |                      |Exploration                                   |
    |                      |licences were granted on 25th January 2011 for|
    |                      |an initial period of 4 years.                 |
    |                      |                                              |
    |                      |The Oodnadatta Project includes a total of 9  |
    |                      |granted exploration licences totalling 4,860  |
    |                      |sq km.                                        |
    |                      |Licences are held by GE Resources Pty Ltd, a  |
    |                      |wholly owned subsidiary of Uranium Equities   |
    |                      |Limited.                                      |
    |                      |Exploration licences EL4679 to EL4688 were    |
    |                      |granted on 22/02/2011, EL4959 was granted     |
    |                      |on 09/07/2012 and EL5144 was granted on       |
    |                      |10/01/2013. Each exploration lease was granted|
    |                      |for an                                        |
    |                      |initial period of 2 years with EL4679 to      |
    |                      |EL4688 currently under renewal.   All of the  |
    |                      |EL's are in                                   |
    |                      |good-standing as of the date of this          |
    |                      |announcement.                                 |
    |______________________|______________________________________________|
    |Exploration done by   |Oodnadatta area - limited historical drilling |
    |other parties         |was conducted in areas of cover and numerous  |
    |                      |small                                         |
    |                      |iron-oxide, copper, gold and uranium mineral  |
    |                      |occurrences were identified by prospectors    |
    |                      |(c1800's                                      |
    |                      |to early 1900's) in the adjacent outcropping  |
    |                      |Peake and Denison Ranges.  No significant     |
    |                      |deposits                                      |
    |                      |have been identified to date.                 |
    |                      |                                              |
    |                      |Marla area - previous exploration in the Marla|
    |                      |Project region is extremely sparse to         |
    |                      |non-existent.                                 |
    |                      |Large areas of unexplored ground exist which  |
    |                      |are prospective for uranium mineralisation in |
    |                      |Mesozoic                                      |
    |                      |and Tertiary stratigraphy. Previous           |
    |                      |exploration has predominantly been for        |
    |                      |diamonds, with lesser                         |
    |                      |uranium, coal, and base metal focus. No       |
    |                      |significant deposits have been identified to  |
    |                      |date.                                         |
    |______________________|______________________________________________|
    |Geology               |The Oodnadatta Project tenements are situated |
    |                      |at the north-eastern margin of the Archaean to|
    |                      |Palaeoproterozoic Gawler Craton, and cover    |
    |                      |both outcropping basement within the Peake and|
    |                      |Denison Ranges, and buried basement flanking  |
    |                      |the Ranges. Proterozoic basement blocks are   |
    |                      |largely covered by five superimposed          |
    |                      |Phanerozoic intra-cratonic basins, separated  |
    |                      |by unconformities                             |
    |                      |(Figure 5). The basal "cover" sequence        |
    |                      |comprises Neo-Proterozoic sediments associated|
    |                      |with                                          |
    |                      |the Adelaide Geosyncline, and is in turn      |
    |                      |overlain by the Cambro-Ordovician Officer     |
    |                      |Basin,                                        |
    |                      |comprising a thick sequence of marine and     |
    |                      |non-marine sediments.                         |
    |                      |                                              |
    |                      |The Marla Project is located in the North east|
    |                      |corner of the Gawler Craton and is bounded by |
    |                      |two craton bounding structures- a major       |
    |                      |ENE-trending suture zone separating the       |
    |                      |Meso-Proterozoic                              |
    |                      |basement of the Musgrave Province to the north|
    |                      |west from the Archaean to Palaeo-Proterozoic  |
    |                      |basement of the Gawler Craton's Nawa Domain to|
    |                      |the south east, and the Torrens Hinge Zone to |
    |                      |the north east, a north west trending         |
    |                      |structural zone separating the Gawler Craton  |
    |                      |from rocks of                                 |
    |                      |the Curnamona Craton.                         |
    |                      |                                              |
    |                      |The Marla & Oodnadatta projects are           |
    |                      |prospective for the discovery of economic Iron|
    |                      |- Oxide                                       |
    |                      |Copper - Gold ± Uranium (IOCGU) deposits.     |
    |                      |                                              |
    |                      |The Gawler Craton hosts a number of           |
    |                      |significant IOCGU deposits including deposits |
    |                      |including                                     |
    |                      |Olympic Dam, Prominent Hill and Carrapateena. |
    |______________________|______________________________________________|
    |Drill hole Information|No drilling has been undertaken.              |
    |______________________|______________________________________________|
    |Data aggregation      |Due to no previous drilling, no sample data   |
    |methods               |has been aggregated.                          |
    |______________________|______________________________________________|
    |Relationship between  |Due to no previous drilling, no mineralization|
    |mineralisation widths |identified to date.                           |
    |and intercept lengths |                                              |
    |______________________|______________________________________________|
    |Diagrams              |See Figures 2 & 3                             |
    |______________________|______________________________________________|
    |Balanced reporting    |Results reported reference all available data.|
    |______________________|______________________________________________|
    |Other substantive     |Regional geological mapping has been conducted|
    |exploration data      |by the SA Geol Survey. Geophysical surveys    |
    |                      |(aeromagnetics & gravity) come from public    |
    |                      |domain data sets. An infill gravity survey has|
    |                      |been                                          |
    |                      |completed over parts of the Marla property. No|
    |                      |other material results are available.         |
    |______________________|______________________________________________|
    |Further work          |RC/DD drilling is proposed to follow up the   |
    |                      |targets identified from geophysics. Further   |
    |                      |ground                                        |
    |                      |geophysics (gravity) may be undertaken to     |
    |                      |confirm and refine targets for drilling.      |
    |______________________|______________________________________________|

 

 

 

SOURCE Chalice Gold Mines Limited


Source: PR Newswire