Chalice Gold Mines : 21/10/2016 - Additional Information - Option to acquire Abitibi project

ABN 47 116 648 956

Additional Information - Chalice enters option to acquire highly prospective Abitibi gold project

Chalice Gold Mines Limited (ASX: CHN) (TSX: CXN) ("Chalice" or "the Company") refers to the ASX announcement entitled "Chalice enters option to acquire highly prospective Abitibi gold project in Quebec" ("the Announcement") dated 12 October 2016. In relation to the Announcement, the Company provides the following additional information in accordance with ASX listing rule 5.12 regarding the reported historical and foreign mineral resource for the Nordeau West gold deposit.

1. LR 5.12.4 - As noted in the Announcement, the historical and foreign mineral resource is considered to be reliable. Chalice has assessed the reliability of the historical and foreign mineral estimate (Canadian NI 43-101) including by reference to the categories in Table 1 of Appendix A of the ASX Listing Rules which are relevant to understanding the reliability of the estimates (see Annexure 1).

2. LR 5.12.5 - The Company provides further information of work programs on which the historical and foreign mineral resource is based and key assumptions in Annexure 1.

3. LR 5.12.6 - The Company advises that it is not aware of any more recent estimates or data relevant to the reported historical and foreign mineral resource.

4. LR 5.12.7 and 5.12.8 - Dependent on future exploration programs and results, the Company may validate and recalculate the reported historical and foreign mineral resource and issue a revised JORC 2012 and NI-43-101 compliant mineral resource. The Company intends to undertake exploration and evaluation activities over the next 12 months and will fund this work through existing cash reserves.

Tim Goyder Managing Director

For further information, please contact: Tim Goyder, Managing Director

Chalice Gold Mines Limited

Telephone +618 9322 3960

Competent Persons and Qualified Persons Statement

The information in this report that relates to the Nordeau West historical and foreign mineral resource estimate is an accurate representation of the available data and studies for the project. The information in the report is compiled by Dr Kevin Frost BSc (Hons), PhD, who is a Member of the Australian Institute of Geoscientists. Dr Frost is a full-time employee of the Company and 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 NI 43-101. Dr Frost has verified the data disclosed in this release and has reviewed the Technical Report - Nordeau Gold Mineral Properties on behalf of the Company. Dr Frost consents to the release of information in the form and context in which it appears here.

Chalice Gold Mines Limited, Level 2, 1292 Hay Street, West Perth, Western Australia T: +618 9322 3960 F: +618 9322 5800 E: info@chalicegold.com www.chalicegold.com

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Criteria Explanation Commentary

Include reference to measures taken to ensure sample representivity and the appropriate calibration of any measurement tools or systems used

Aspects of the determination of mineralisation that are Material to the Public Report. In cases where 'industry standard' work has been done this would be relatively simple (e.g. 'reverse circulation drilling was used to obtain 1 m samples from which 3 kg was pulverised to produce a 30 g charge for fire assay'). In other cases more explanation may be required, such as where there is coarse gold that has inherent sampling problems. Unusual commodities or mineralisation types (e.g. submarine nodules) may warrant disclosure of detailed information

Information concerning field and laboratory techniques adopted in historic drilling is typically unknown. However, the majority of the drilling is sufficiently well documented to be considered representative. Drilling that is the subject of this report is diamond core and has been selectively sampled based on mineral content and halved either using manual techniques or a masonry saw. The samples were presented to commercial laboratories and assayed for gold content and periodically for silver and arsenic.

Plato Gold's exploration drilling programs were managed by MRB & Associates which includes documentation of field data collection, logging and sampling methods. Core was collected, geologically‐logged, sample intervals marked then halved using core saws. QA/QC samples and ¼ core duplicates were included in the sample stream and analysis of the samples with screen/AA and fire assay/AA analysis.

Standard industry practice has been used by Plato Gold to ensure sample representivity and these include the use of standards, blanks and duplicate samples.

Sampling procedures are variable due to the duration of historical exploration and numerous companies involved. Sampling procedures range from being undocumented, to industry standard. All samples are diamond core that have been selected based on mineral content and lithology, and halved either using manual techniques or a masonry saw. The samples were presented to laboratories for preparation and analysis of gold content using fire assay techniques.

Drilling

techniques

Drill type (e.g. core, reverse circulation,

open-hole hammer, rotary air blast,

auger, Bangka, sonic, etc) and details All drilling has been diamond core drilling. All drill core relating to Plato Gold drilling

(e.g. core diameter, triple or standard programs is NQ sized.

tube, depth of diamond tails, face- sampling bit or other type, whether core is oriented and if so, by what method, etc).

Drill sample

recovery Method of recording and assessing core

and chip sample recoveries and results

assessed

Measures taken to maximise sample recovery and ensure representative nature of the samples

Whether a relationship exists between sample recovery and grade and whether sample bias may have occurred due to preferential loss/gain of fine/coarse material.

No historic drill core was located from the historic drilling programs prior to 2006. All drill core from the Plato Gold drill programs has been logged under supervision of MRB & Associates. Core recoveries are not reported however there is no indication that core recoveries were unsatisfactory.

Not yet verified

Not yet verified

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Criteria Explanation Commentary

Sub-sampling techniques and sample preparation

If core, whether cut or sawn and whether quarter, half or all core taken.

If non-core, whether riffled, tube sampled, rotary split, etc and whether sampled wet or dry.

For all sample types, the nature, quality and appropriateness of the sample preparation technique.

Quality control procedures adopted for all sub-sampling stages to maximise representivity of samples.

Measures taken to ensure that the sampling is representative of the in situ material collected, including for instance results for field duplicate/second-half sampling.

Whether sample sizes are appropriate to the grain size of the material being sampled.

Core was cut longitudinally with a masonry saw (or often manually in older holes) and a half core sampled for analysis, the residual half core being retained in the core box for reference. In cases where duplicates were required, the remaining half core was sawn in half and sampled.

Not applicable

Due to the duration of historical exploration, and work being conducted by numerous companies, sample preparation procedures are either not known or not verified.

For the Plato Gold drilling program all core has been split on site using a masonry saw. Preparation of samples has then typically been completed in commercial laboratories along with assaying by fire assay techniques, in line with industry standard practice.

Based on information relating to the previous companies' approach of using commercial laboratory facilities the preparation is assumed to be industry standard practise.

The documentation of historic field procedures applied by previous explorers including details regarding sample collection, preparation, transportation and security, and analytical techniques, is poorly documented or unknown.

All previous sampling was selective on the basis of the visually interpreted presence of mineralisation.

Drilling by Plato Gold has well documented sampling protocols and quality control procedures that are aligned with standard industry practice.

Sampling representivity has not been verified for historic sampling completed before Plato Gold.

Plato Gold instigated QA/QC practices aligned with industry standard practice, including the insertion of blanks, field duplicates and standards at a rate of ~1/15 to 1/40 each. Field duplicates are identified within the database. Whilst variation exists on a sample by sample comparison, the overall results are acceptable/comparable.

Sample sizes are typically 1.5m but ranges from less than 0.2m to 8m, although 99% of samples are less than 1.5m which is appropriate for the style of mineralisation being sampled.

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