Eritrea

Chalice Gold Mines Limited (ASX: CHN) advises that it has taken a major step towards production at its Zara Gold Project in Eritrea with the completion of the Social & Environmental Impact Assessment (SEIA) and Social & Environmental Management Plan (SEMP) for the 840,000oz Koka Deposit at Zara.

The SEIA and SEMP have been lodged with the Eritrean Ministry of Energy & Mines. These reports form a key component of the documentation required to secure a mining licence for the Koka deposit. They represent the culmination of two and half years of environmental, socio-economic and community studies.

The studies were conducted by independent consultants Knight Piésold and Global Resources Development and Management Consultants (GREDMCO) in line with internationally accepted standards.

Chalice will press ahead with planning for the development of the Koka mine, with first production scheduled for early 2013. Koka is forecast to produce at an average annual rate of 104,000 ounces at a cash cost of US$338/oz.

DR DOUG JONES

Managing Director

About the Zara Gold Project

The Zara Project comprises four Exploration Licences and two Prospecting Licences (the latter currently undergoing conversion to EL’s) covering an area of 615km2 situated in northern Eritrea, approximately 160km northwest of Asmara city. Chalice holds a 100% interest in the project subject to government participation rights.

The Koka Gold Deposit within the project contains a Probable Reserve of 4.6 million tonnes of ore grading 5.1 grams of gold per tonne and containing 760,000 oz of gold. This is contained within an Indicated Resource of 5.0 million tonnes grading 5.3 grams of gold per tonne containing 840,000 oz of gold.

Competent Persons’ Statement

The information in this report 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 2004 edition of the Australasian Code for Reporting of Exploration Results, Minerals Resources and Ore Reserves, and consents to the release of information in the form and context in which it appears here.

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)’. Mr. Tyrrell consents to the inclusion of this information in the form and context in which it appears.

The information in this statement of Ore Reserves is based on information compiled by Mr David Lee who is a Member of the Australasian Institute of Mining and Metallurgy and a full time employee of AMC. Mr Lee has sufficient relevant experience to be a Competent Person as defined in the JORC Code. Mr Lee consents to the inclusion of this information in the form and context in which it appears.

Related posts:

1. Chalice Declares Maiden Gold Reserve for Eritrea’s Koka Deposit
2. Chalice Gold Presentation ‘Poised for Production in East Africa’
3. Koka Resource Upgrade Imminent After More High-Grade Results in Eritrea
4. Chalice Gold Mines: Drilling Results Confirm High Grade Koka Gold Deposit in Eritrea
5. Eritrea: Strong Results Move Chalice Closer to Production at Zara Project