Further to Chalice’s ASX Release of 13 July 2010 of the results of the Feasibility Study for its Koka Gold Project in Eritrea, East Africa, the Company is pleased to provide the full Project Summary from the Feasibility Study for reference by investors and shareholders.

The full Koka Gold Project Feasibility Study Summary is appended to this release and is also available on the Company’s website. The key financial outcomes of the Feasibility Study, which was undertaken by Lycopodium Minerals Limited (“Lycopodium”) with inputs from prominent industry consultants AMC Consultants Pty Ltd (“AMC”) and Knight Piésold Pty Ltd (“KP”), are set out in the announcement of 13 July 2010.

The highlights of that announcement were:

• Average life of mine total cash operating costs of US$338 per oz of gold
• After?tax NPV5% of US$196 million, life of mine EBITDA of US$589 million and an after tax IRR of 35% at current gold price of ~US$1,200/oz
• After?tax NPV5% of US$99 million, life of mine EBITDA of US$381 million and an after tax IRR of 22% at base case gold price of US$900/oz
• Average annual gold production of approximately 104,000oz per year with gold production totalling 731,000oz
• Forecast mine life of seven years at a mill throughput of 600,000 tonnes per annum, rising to 700,000 tonnes per annum from year 5
• Open pit Ore Reserves of 4.63Mt grading 5.1g/t for 760,000oz contained gold with a waste to ore ratio of ~10:1
• Estimated start up capital cost of US$122M

As advised in the previous announcement, the Company will now proceed to apply to the Eritrean Government for a Mining Licence in respect of the Koka Deposit. In parallel with this application, the Compan will assess its various funding options for development of the Koka Project.

The full Feasibility Study was recently presented to the Eritrean Ministry of Energy & Mines as the first step in the Company’s application for a Mining Licence for the Koka Gold Deposit. Lycopodium Minerals Limited, AMC Consultants Pty Ltd and Knight Piésold Pty Ltd have consented to the release of the Summary of the Feasibility Study.

Tim Goyder

Executive Chairman

See full report here: Summary Report

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