Chalice Gold Mines : Announcement of buy-back and Appendix 3C

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ABN 47 116 648 956

ASX Announcement 16 June 2016 Chalice Announces On-Market Share Buy-Back

Chalice Gold Mines Limited (ASX: CHN) (TSX: CXN) ("Chalice" or "the Company") advises that it intends to undertake a discretionary on-market share buy-back of up to 28,271,080* ordinary shares as part of a capital management plan over the next 12 months.

Following the sale of the Cameron Gold Project to First Mining Finance Corp. on 10 June 2016, Chalice currently has net financial assets (cash plus investments less current liabilities) of approximately A$61 million (or 21.5 cents per share).

The Board of Chalice is committed to actively managing the Company's capital requirements and believes that an on- market buy-back provides the opportunity to repurchase shares at attractive valuations and deliver value to shareholders at this time given the Company's 20 day Volume Weighted Average Price on the ASX prior to today was 16 cents.

The Board will continue to assess the merits of this capital management initiative as market conditions evolve and will keep the market informed of the buy-back's progress in accordance with ASX listing rules. The buyback is therefore dependent upon market conditions, volumes and other relevant factors.

The earliest date the buyback will commence is Monday, 4 July 2016. Chalice will appoint Bell Potter Securities Limited to act on behalf of the Company in relation to the share buy-back process.

An Appendix 3C in relation to the buy-back is attached.

The on-market buy-back is not being offered or executed through the facilities of the Toronto Stock Exchange. Residents of Canada who wish to participate should contact Mrs Leanne Stevens, Company Secretary by email at lstevens@chalicegold.com. The on-the-market buy-back is proceeding pursuant to the foreign issuer bid exemption found in applicable Canadian securities laws.

*There is no guarantee Chalice will repurchase the full 28,271,080 shares and the Company reserves the right to suspend or terminate the share buyback program at any time and to buyback less than 28,271,080 shares.

TIM GOYDER

Managing Director

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

Richard Hacker, Chief Financial Officer Chalice Gold Mines Limited Telephone +618 9322 3960

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

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, the estimation of mineral reserve and mineral resources, the realisation of mineral reserve estimates, the actual number of shares and price which may be purchased pursuant to the proposed share buy-back plan, the likelihood of exploration success, 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, will, may would, 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 may 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 mineral resources or 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, all of which are filed and available for review on SEDAR at 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.

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Appendix 3C Announcement of buy-back (except minimum holding buy-back)

Information and documents given to ASX become ASX's property and may be made public.

Introduced 1/9/99. Origin: Appendix 7B. Amended 13/3/2000, 30/9/2001, 11/01/10

Rule 3.8A

Name of entity	ABN/ARSN
Chalice Gold Mines Limited	47 116 648 956

We (the entity) give ASX the following information.

Information about buy-back

1	Type of buy-back	On-market buy-back
2	+Class of shares/units which is the subject of the buy-back (eg, ordinary/preference)	Ordinary shares
3	Voting rights (eg, one for one)	One for one
4	Fully paid/partly paid (and if partly paid, details of how much has been paid and how much is outstanding)	Fully paid
5	Number of shares/units in the +class on issue	282,710,802
6	Whether shareholder/unitholder approval is required for buy-back	No shareholder approval required.
7	Reason for buy-back	Ongoing capital management

+ See chapter 19 for defined terms.

11/01/2010 Appendix 3C Page 1

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Any other information material to a shareholder's/unitholder's decision whether to accept the offer (eg, details of any proposed takeover bid)

No

On-market buy-back

9	Name of broker who will act on the company's behalf	Bell Potter Securities Limited
10	Deleted 30/9/2001.
11	If the company/trust intends to buy back a maximum number of shares - that number Note: This requires a figure to be included, not a percentage.	Up to 28,271,080 ordinary shares
12	If the company/trust intends to buy back shares/units within a period of time - that period of time; if the company/trust intends that the buy-back be of unlimited duration - that intention	12 months from date of commencement.
13	If the company/trust intends to buy back shares/units if conditions are met - those conditions	Not applicable

Employee share scheme buy-back

14	Number of shares proposed to be bought back	Not applicable
15	Price to be offered for shares	Not applicable