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From: Berhane Habtemariam (Berhane.Habtemariam@gmx.de)
Date: Tue Dec 21 2010 - 18:00:43 EST
Chalice Gold: Regional Exploration Program Ramps Up at Zara
Tue, Dec 21, 2010, 5:59pm
Further Encouraging Results From Zara North; New Soil Anomaly Identified at
Fah Prospect
Highlights:
- Further results from Zara North confirm strong stream sediment anomalism
over 10km strike length
- Follow-up and infill sampling over this target well advanced with new
areas of artisanal workings identified
- Soil sampling at Fah prospect defines extensive gold anomaly
- Large heliborne magnetic and radiometric survey underway
Press Release Source: Chalice Gold Mines Limited On Monday December 20,
2010, 7:00 am EST
PERTH, WESTERN AUSTRALIA--(Marketwire - Dec. 20, 2010) - Chalice Gold Mines
Limited (TSX: <http://finance.yahoo.com/q?s=cxn.to&d=t> CXN -
<http://finance.yahoo.com/q/h?s=cxn.to> News; ASX:
<http://finance.yahoo.com/q?s=chn.ax&d=t> CHN -
<http://finance.yahoo.com/q/h?s=chn.ax> News) today announced it is ramping
up regional exploration at its Zara Gold Project in Eritrea, East Africa,
with a focus on identifying new prospects to increase resources in the
vicinity of its flagship Koka Gold Deposit, which hosts an indicated Mineral
Resource of 840,000oz at a grade of 5.3g/t gold.
Follow-up geochemical sampling and geological mapping on the Zara North
licence continues to confirm previously reported gold anomalism (see
announcement to the ASX dated 22 July, 2010). Identifying the source of this
anomalism will be a focus for intensive exploration over the coming months
but work currently underway has identified several zones of previously
unknown artisanal workings within the source area for the anomalies.
In addition, results from a soil sampling program at the Fah prospect,
located 5 kilometres southeast of Koka, have revealed extensive high order
gold anomalism.
Further, in order to better assess the exploration potential of the broader
Zara licences, which encompass 615 sq km, a large heliborne magnetic and
radiometric survey has commenced over the Zara licences with the objective
of identifying alteration zones typically associated with Koka-style gold
systems.
The Company is steadily increasing its exploration capability through the
addition of resources and personnel and plans to use helicopter support to
expand and accelerate these programs.
1. Koka North Stream Sediment Geochemistry
As reported the ASX on 22 July 2010, results from a reconnaissance Bulk
Leach Extractable Gold (BLEG) drainage sampling program completed over the
Zara North and Zara South Prospecting Licenses outlined an extensive zone of
gold anomalism in the western half of the Zara North tenement.
Follow-up infill sampling using conventional stream sediment sampling has
confirmed that this gold anomalism extends over a strike length of approx.10
km (see Figure 1) with values of up to 876ppb gold recorded. Field checking
has revealed artisanal workings in several of the anomalous drainages, often
associated with a semi-continuous high-strain zone with intense
carbonate-sericite alteration and quartz veining over a 30-50m wide zone
that extends the length of the anomalous zone (see Figure 2). Such shearing
and alteration is often related to gold systems such as Koka. Reconnaissance
rock chip sampling along this zone has returned assays of up to 11 g/t gold
in a grab sample.
Chalice has recently commenced a program of detailed geological mapping and
soil sampling to identify both the source and extent of the anomalism in the
Zara North tenements. This program will be a major focus over the coming
months and the Company has assigned additional technical staff to expedite
its progress.
To view Figure 1: Anomalous BLEG and -80 mesh gold values - northern Zara
Project and Figure 2: Zara North prospect - carbonate-sericite alteration
associated with veining in source area of BLEG and conventional -80 mesh
drainage geochemistry gold anomalism, please visit the following link:
<http://us.lrd.yahoo.com/SIG=1296f2gud/**http%3A/media3.marketwire.com/docs/
chalice_gold_dec20_fig01_fig02.pdf>
http://media3.marketwire.com/docs/chalice_gold_dec20_fig01_fig02.pdf
2. Aeromagnetic and Radiometric Survey
An extensive airborne magnetic and radiometric survey covering the Zara
North, South and Central properties has commenced and is progressing well.
This 12,750 line kilometre survey will help define the regional geological
structure, alteration patterns and granitoid suites/phases that may be
associated with gold (and possibly other) mineralisation.
3. Fah Soil Sampling
Results from a recent geochemical survey over the Fah prospect, located 5km
southeast of Koka (see Figure 1), have been received. They reveal a robust
gold-in-soil anomaly extending over a strike length exceeding 1 kilometre
and exceeding 100ppb gold (see Figure 3). It encompasses the main historical
artisanal workings at Fah and overlies an intensely altered and finely
quartz stockworked microgranite suggestive of a strong mineralising system.
Two scout holes drilled beneath the main artisanal workings intersected
disseminated sulphides associated with multiple narrow quartz stringers as
well as several larger metre-scale quartz-sulphide veins. Assays from these
holes are currently pending.
To view Figure 3: Fah Prospect - gold anomalies in -80 mesh soil samples,
please visit the following link:
<http://us.lrd.yahoo.com/SIG=123mbc2so/**http%3A/media3.marketwire.com/docs/
chalice_gold_dec20_fig03.pdf>
http://media3.marketwire.com/docs/chalice_gold_dec20_fig03.pdf
About the Zara Gold Project
The Zara Project comprises four Exploration Licenses and two Prospecting
Licenses (currently being converted to exploration licences) covering an
area of 615km2 situated in northern Eritrea, approximately 160km northwest
of Asmara city. Chalice currently holds a 100% interest in the project
subject to the Eritrean Government's right to acquire a further 30%
interest, at fair value, in any mining project in addition to a 10% carried
interest.
The Zara Project encompasses a portion of the Arabian-Nubian Shield, which
straddles the Red Sea. This area is highly prospective for gold and offers
similar potential to some of the better-known parts of West Africa, such as
Ghana and Burkina Faso, but is still very much in its infancy in terms of
exploration. Mines and projects within the Arabian Nubian Shield include
Sukari gold mine and the Bisha gold-copper-zinc VMS mine currently under
construction. Most of Chalice's 615 square kilometre tenement package at
Zara remains virtually untouched by modern exploration.
The Koka Gold Deposit, within the Zara Project, contains a Probable Mineral
Reserve of 4.6 million tonnes grading 5.1 grams of gold per tonne and
containing 760,000 oz of gold. This is contained within an Indicated Mineral
Resource of 5.0 million tonnes grading 5.3 grams of gold per tonne
containing 840,000 oz of gold.
As Chalice announced to the Australian Securities Exchange ("ASX") on 13
July 2010, key parameters of the project obtained from a Feasibility Study
for the Koka Gold Deposit prepared by Lycopodium Minerals Limited and
completed in July 2010 are as follows:
-- Average life-of-mine total cash operating costs(i) of US$338 per oz of
gold;
-- After-tax net present value at a 5% discount rate of US$196 million,
life-of-mine earnings before income taxes, depreciation and
amortisation(i) of US$589 million and an after-tax internal rate of
return of 35% at a gold price of US$1,200/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;
-- Estimated start-up capital cost of US$122 million.
This announcement sets out a summary of information contained in the
Technical Report released on 8 October 2010. For investors to fully
understand the information in this announcement, they should read the
Technical Report in its entirety, including all qualifications, assumptions
and exclusions that relate to the information set out in this announcement.
Competent Persons and Qualified Person 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 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.
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.
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 and
is a Qualified Person under National Instrument 43-101 - 'Standards of
Disclosure for Mineral Projects'. Mr Lee 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 180
micron 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.
Non GAAP Measures
Information in this news release marked with a "(i)" above represent
non-IFRS (International Financial Reporting Standards) measures.
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
<http://us.lrd.yahoo.com/SIG=10q41mvbm/**http%3A/www.sedar.com/>
www.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.
Contact:
Mr Tim Goyder
Chalice Gold Mines Limited
Executive Chairman
(+618) 9322 3960
Dr Doug Jones
Chalice Gold Mines Limited
Managing Director
(+618) 9322 3960
Read Corporate
For media inquiries, please contact:
Nicholas Read
(+618) 9388 1474
Chalice Gold Mines Limited
Investor Relations (North America):
Dr Toni Davies
+1 416 5664378
<mailto:info@chalicegold.com> info@chalicegold.com
<http://us.lrd.yahoo.com/SIG=110ttr9pe/**http%3A/www.chalicegold.com/>
www.chalicegold.com
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