South Boulder Eritrea

South Boulder’s sixth year as a publicly listed company has been one of consolidation and acquisition in exploration projects. During the year the company acquired a new, potentially world class potash project at Colluli in Eritrea.

The target is an evaporite hosted potash deposit. There was production from the region by Italian colonialists in early part of last century and extensive drilling was conducted from 1958 – 1968. Since 1968 there has been no work completed on the prospect.

The tenement was awarded to South Boulder in July. With several competing claims this was a testament to the good work that both Lorry and Liam have done establishing South Boulders credentials with the Eritrean Government.

I with Lorry made our first planning visit to the project in September. It was my first visit to Eritrea and I left with the feeling that it was a country that one can do business in. The other fertilizer projects located in Western Australia and the Northern Territory have, either been put on the back burner or traded.

The Duketon Project has not been neglected during the year. Independence have continued exploring the Bulge region with the discovery of definite nickel sulphide in some drill intersections at the Rosie and Bulge C2 Prospects.

Using Independence’s nickel drilling in the Bulge area and assaying the samples for gold, STB has made a new gold discovery, the Terminator Prospect. We are currently undertaking follow up drilling on this project. The coming year promises to be a very active one for the company and I thank my fellow directors and all our staff for their hard work and effort over the past year.

TERRY GRAMMER

Chairman

PDF: South Boulder Annual Report 2009

CHALICE

The Executive Chairman of Chalice Gold Mines Limited addressed shareholders in an opening letter of the Annual Report 2009.

Dear Shareholder

During the 2009 Financial Year your Directors have focused activities towards a transaction that would change the profile of the Company through the acquisition of a major asset. At the time of writing I am pleased to report that we have now completed such a transaction through the merger of your Company with ASX-listed Sub-Sahara Resources NL (“Sub-Sahara”).

This merger together with the acquisition of a direct interest in Sub- Sahara’s main undertaking, being the Zara Gold Project in Eritrea, will give the Company 80% of that project. The project is located in the East African country of Eritrea and contains 944,000 oz at an average grade of 5.8 g/t at the Koka deposit.

This transaction provides shareholders with the opportunity to participate in the development of a potentially highly profitable, high grade gold project with untouched exploration opportunities near the current resource and regionally.

The Company now holds a substantial land package of 615 km2. This area has had little exploration, if any, and this provides a unique opportunity for the discovery of additional gold and base metal deposits. Full details of the project are disclosed in the following Review of Operations.

With the merger now behind us, the Company has commissioned Lycopodium Ltd to undertake a scoping study to be completed by October 2009 and then a detailed feasibility study to be completed by May 2010. In parallel with this work, a 5,000 metre diamond drilling program using two rigs will commence during November 2009 to upgrade the resource from Inferred and Indicated to a Measured category.

In conjunction with the studies being undertaken at the Koka deposit, the Company will also focus its attention towards the potential of further gold discoveries at depth and along strike. A 2,500 metre diamond drilling program has been planned to test these targets. Our preliminary geological assessment of the region suggests that there is considerable opportunity to locate additional ore bodies in similar geological settings along strike from the main Koka deposit.

TSX-listed gold and base metals company Nevsun Resources Ltd has recently secured US$235M of financing to develop the Bisha Project which lies approximately 90km south of our project and will be Eritrea’s first significant mining operation. We look forward to working with the Government and people of Eritrea to become the next mining operation within the country, which, all going well, could be in production in 2011.

I would like to thank my fellow Directors and staff for their efforts during the last 12 months as we continue to grow and develop your Company. I would also like to welcome Mike Griffiths who was formerly Managing Director of Sub-Sahara to the Board of Chalice. Mike brings to the Board considerable experience both in Eritrea and Africa generally and will be a valuable member of our Board and management team.

Last but not least, I would like to thank you for your ongoing support and I welcome the Sub-Sahara Resources shareholders to our register. ANNUAL REPORT 2009.