Chalice Gold Mines : A$7.5M Exploration Program in Canada and Australia

4 July 2017

• A$7.5 million budget, including >22,000m drilling, planned on five high-potential gold and base metals projects across five projects in Canada and Australia in FY 2018.

• A$5 million allocated to aggressive exploration at the East Cadillac and Kinebik gold projects, hosted in the prolific Abitibi Greenstone Belt, Quebec, Canada:

  • East Cadillac is 35km east of Val-d'Or and covers 16 kilometres of strike of the eastern part of the Larder- Lake Cadillac Fault, which has a gold endowment of +100M ounces.

  • Kinebik covers 30km of strike of the Casa Berardi Fault, which hosts multiple gold deposits.

  • Planned 9,500m drill program in H2 2017 to test multiple targets, including extensions of the existing high-grade gold mineral resource and along the prospective Larder-Lake Cadillac Fault corridor controlled by Chalice plus follow-up geochemical anomalies at Kinebik.

• A$2.5M allocated across multiple high-potential projects in Australia:

  • Warrego North Iron Oxide Copper-Gold ("IOCG") Project, Northern Territory - drill program in H2 2017 to expand the recent Parakeet copper-gold discovery.

  • Latitude Hill Nickel Project, Western Australia - 9,000m drill program in H2 2017 to test multiple Spectrem EM conductors with Voisey's Bay and Nova-Bollinger style nickel-copper discovery potential.

  • West Pilbara Gold and Base Metals Project, Western Australia - 4,000m aircore and RC drill program at three gold and copper targets in H2 2017.

• Chalice can rapidly escalate exploration activities based on success with cash and liquid investments of A$53M.

Chalice Gold Mines Limited ("Chalice" or "the Company") (ASX: CHN) (TSX: CXN) today announced a FY 2018 A$7.5 million exploration initiative to advance its high priority gold and base metals targets in its current property portfolio (Table 1 and Figure 1). Chalice's exploration strategy has focused on acquiring exposure to projects, either through direct ownership or joint venture, hosted in terranes with outstanding metal endowment that also have the key geological features to host Tier 1 deposits. These include the East Cadillac Gold Project in the prolific Abitibi gold district in Quebec, Canada; the Warrego North Iron Oxide Copper Gold project in the Tennant Creek gold ± copper mineral field of the Northern Territory, the Latitude Hill nickel project and the gold and base metals districts of the West Pilbara in Western Australia (Figure 1).

Chalice's exceptional balance sheet of A$53 million in cash and liquid assets means the Company is well positioned to rapidly escalate exploration activities based on success.

Chalice's Managing Director, Mr Tim Goyder stated "Chalice has systematically assembled a global exploration portfolio that offers outstanding potential for new discoveries in some of the best exploration addresses in the world. It is now time to evaluate the potential of this portfolio and we are in the enviable position of having the balance sheet and the in-house technical expertise to support a mid-tier scale exploration effort without diluting our shareholders at the company or project level."

Table 1: Overview and approximate timeline for proposed FY 2018 exploration program

Figure 1: Chalice property portfolio

EXPLORATION PROJECT OVERVIEWS

East Cadillac Gold Project, Quebec, Canada

The East Cadillac Gold Project covers 107km2 and is 35km east of the 20Moz Val-d'Or gold camp (Figures 2 and 3). With a strike length of 16km encompassing the Larder Lake-Cadillac Fault, the most prolifically gold endowed trend in southern Abitibi, the project is a located amongst some of the region's most significant mines and is adjacent to the historic Chimo gold mine (owned by Cartier Resources (TSX: ECR)).

The project includes an initial indicated mineral resources of 225,000t @ 4.17g/t gold for 30,200oz gold and an inferred mineral resource of 1,112,000t @ 4.09g/t gold for 146,300oz gold at the Nordeau gold deposit, which the Company considers to have substantial growth potential.

No modern surface geochemistry, geological mapping or structural analysis has been completed in the district. The Company has analysed historical exploration information and merged this data with results from recent exploration activities undertaken by Chalice. This compilation will provide the basis for an integrated approach to exploration targeting over the Company's consolidated land position.

The project comprises 100% owned Chalice claims and option and farm-in agreements with Globex Mining Enterprises (TSX: GMX) and Richmont Mines (TSX: RIC), refer to Appendix A for details.

Figure 2: East Cadillac and Kinebik Gold Project Locations (A) and detailed East Cadillac Property and Geology Map (B)

Mineral resources that are not mineral reserves do not have demonstrated economic viability. Mineral resource estimates do not account for mineability, selectivity, mining loss and dilution. These mineral resource estimates include inferred mineral resources that are considered too speculative geologically to have economic considerations applied to them that would enable them to be categorised as mineral reserves. There is also no certainty that these inferred mineral resources will be converted to the measured and indicated categories through further drilling, or into mineral reserves, once economic considerations are applied.

Kinebik Gold Project, Quebec, Canada

The 100% owned Kinebik Gold Project covers 187km2, including 30km of strike of the Casa Berardi fault, which hosts Hecla Mining Company's (NYSE:HL) Casa Beradi multi-million ounce gold mine and numerous other gold occurrences (Figure 2). Chalice has identified three strong geochemical anomalies which will be prioritised with an IP survey and diamond drilling.

Figure 3: East Cadillac property boundary and neighbouring landholders in the Val-d'Or region

Warrego North IOCG Project, Northern Territory, Australia

The Warrego North Project is approximately 20km north-west of the historical high-grade Warrego copper-gold mine in the western part of the Tennant Creek Mineral Field in the Northern Territory, Australia (Figure 4). Warrego was the largest deposit mined in the area with historical production of 1.3Moz of gold and 90,000t of copper from 5 million tonnes of ore at 8g/t gold and 2% copper in a classic iron oxide copper gold ("IOCG") geological setting. Chalice can earn up to a 70% interest in the project from Meteoric Resources NL by sole funding $800,000 (refer to Appendix A for details).

The Company's first diamond drill hole at Warrego North, WND17-001, targeted a coincidental magnetic-gravity and IP chargeability anomaly (Figure 4) and intersected chalcopyrite in magnetite ironstones grading 8m @ 1.74% copper and 0.42g/t gold between 249-257m down-hole depth. Pervasive chlorite-sericite alteration indicates the potential for an extensive hydrothermal system, which is a characteristic of IOCG deposits. A follow-up ground Induced Polarisation (IP) survey will systematically test extensions to known copper-gold mineralisation and also assess the broader Parakeet magnetic-gravity anomaly for additional mineralised magnetite ironstone bodies.