ABN 47 116 648 956
ASX Announcement 7 November 2011 High Grade Gold Intercepts at Zara Project Additional high?grade mineralisation intersected at Koka South: New zone identified at Debra KonateChalice Gold Mines (ASX: CHN; TSX: CXN) and its 60% owned subsidiary Zara Mining Share Company are pleased to report that further high?grade gold intercepts have been received from diamond drilling at the Koka South and Debre Konate prospects, located immediately south of the flagship Koka Gold Deposit at its Zara Project in northern Eritrea (see Figure 1).
Diamond drilling in the second half of 2011 (see Figure 2) has focused on testing of high priority targets within a 7.5km long corridor encompassing the Koka deposit (Probable Mineral Reserve of 760,000oz @ 5.1g/t gold), where Chalice and its partner ENAMCO are planning to commence development of an open?pit mine in early
2012 (ASX announcement - November 2, 2011).
The new results have confirmed and extended previously intersected high?grade mineralisation at Koka South
and identified a significant new mineralized zone at Debra Konate, ~2.5km south of the Koka Deposit.
Koka South
The Koka South prospect, which adjoins the Koka Main deposit to the south, was drilled in 2010, returning intersections of up to 1m at 92 g/t gold (see ASX announcement - July 21, 2010). A further 17 diamond drill holes were drilled in the current campaign for 3,034 metres (see Figure 3). High?grade gold intervals were encountered in most of the holes that intersected the prospective microgranite/porphyry host, including:
? 1m @ 168.8g/t Au from 144m (ZARD 219)
? 5m @ 86.2g/t Au from 98m including 1m @ 401g/t Au (repeat assay 341g/t) and 1m @ 25.7g/t Au
from 113m (ZARD 221)
? 1m @ 44.4g/t Au from 145m (ZARD 202)*
? 4m @ 29.6g/t Au from 116m including 1m @ 101.6g/t Au (ZARD 215)
? 1m @ 15.9g/t Au from 164m (ZARD 209)*
? 8m @ 7.36g/t Au from 162m including 1m @ 20g/t Au and 2m @ 12.7g/t Au from 178m (ZARD 223)
? 3m @ 4.5g/t Au from 134m (ZARD 210)*
? 2m @ 13.1g/t Au from 53m and 1m @ 8.6g/t Au from 80m (ZARD 222)
? 2m @ 12.8g/t Au from 103m (ZARD 211)*
? 5m @ 5.9g/t Au from 138m including 1m @ 15g/t Au and 1m @ 13.1g/t Au (ZARD 217)
? 1m @ 11.7g/t Au from 148m (ZARD 213)
? 1m @ 16.5g/t Au from 32m and 3m @ 8.7g/t Au from 48m (ZARD 216)
? 2m @ 7.4g/t Au from 117m (ZARD 218)
* Previously reported - see ASX announcement - October 26, 2011
A full tabulation of all significant assays is appended to this Announcement.
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
The latest results from Koka South confirm that previously reported high?grade mineralisation extends to depth and remains open to the south and at depth. Mineralisation is hosted by a mixed microgranite and porphyry intrusive body which shows various degrees of brecciation and quartz stockworking. The mineralisation is invariably accompanied by accessory amounts of galena and sphalerite (lead and zinc sulphides) which are increasingly recognized as critical pathfinder minerals in the Koka gold camp.
The widths and grades of mineralisation encountered have the potential to provide a significant extension to the Koka deposit and will be explored by further drilling in the coming months.
Debre Konate
The previously undrilled Debre Konate prospect, located ~2.5km south of Koka, was initially targeted as an IP resistivity anomaly supported by minor artisanal workings and a significant gold and lead soil geochemical anomaly. ZARD 227 (see Figure 2) was the first hole drilled into this prospect and has intersected an extensive low?grade mineralised system grading 0.93g/t Au (uncut) over 199 metres (83m to 282m downhole).
The mineralisation is hosted by microgranite with numerous zones of narrow, higher grade mineralisation contained within the low?grade envelope. Better intersections (uncut) included:
? 1m @ 38.4g/t Au from 146m
? 1m @ 10.3g/t Au from 180m
? 2m @ 14.7g/t Au from 223m
? 4m @ 21g/t Au from 256m
Assays are pending from two additional holes completed into this zone.
The intersection of significant new gold mineralisation at Debre Konate is particularly encouraging, as this opens up a previously unrecognized zone of mineralisation that appears to have potential for larger, bulk?tonnage styles of mineralisation compared with the smaller?tonnage, high?grade style of deposit at Koka.
Chalice Gold's Managing Director, Dr Doug Jones, said the Company was very encouraged by the new results, which highlighted the prospectivity of the Zara Project and the potential for discovering additional Koka?style orebodies, as well as now a potential new style of bulk tonnage mineralisation such as that found at Debra Konate.
"With project development and production now fast?approaching at Koka, we will increasingly turn our attention to exploration to continue to grow our resource inventory," Dr Jones said. "These results have confirmed two priority targets for follow?up drilling, and there are many more to follow next year and beyond."
Doug Jones
Managing Director
Table 1: Significant Intercepts - Zara Gold Project
Hole ID | Target | Easting | Northing | Azimuth | Dip | From (m) | To (m) | Length (m) | Au g/t |
ZARD202 | KS | 390144 | 1823877 | 070E | ?60 | 145 | 146 | 1 | 44.35 |
ZARD209 | KS | 380134 | 1823844 | 102E | ?55 | 138 164 | 139 165 | 1 1 | 1.24 15.94 |
ZARD210 incl incl | KS | 390144 | 1823877 | 102E | ?60 | 134 134 136 | 137 135 137 | 3 1 1 | 4.54 7.59 1.48 |
ZARD211 incl incl | KS | 390188 | 1823805 | 102E | ?62 | 89 103 103 104 | 90 105 104 105 | 1 2 1 1 | 3.46 12.80 3.45 22.14 |
ZARD 212* | KS | 390154 | 1823774 | 102E | ?60 | 139 | 140 | 1 | 1.80 |
ZARD 213 incl | 390134 | 1823924 | 102E | ?60 | 141 148 | 149 149 | 8 1 | 1.94 11.70 | |
ZARD 214 | 389815 | 1823290 | 100E | ?45 | No Si gn ifican t As s a ys | ||||
ZARD 215 incl incl | 390170 | 1823840 | 102E | ?55 | 80 116 116 119 | 85 120 117 120 | 5 4 1 1 | 1.85 29.59 101.61 19.86 | |
ZARD 216 incl incl | 390190 | 1823826 | 102E | ?45 | 32 48 48 50 | 33 51 49 51 | 1 3 1 1 | 16.46 8.73 11.51 14.65 | |
ZARD 217 incl incl | 390171 | 1823786 | 102E | ?60 | 129 138 138 142 | 130 143 139 143 | 1 5 1 1 | 1.01 5.92 14.97 13.09 | |
ZARD 218 | 390171 | 1823786 | 102E | ?45 | 117 | 119 | 2 | 7.36 | |
ZARD 219 | 390162 | 1823808 | 102E | ?60 | 144 154 | 145 155 | 1 1 | 168.64 3.20 | |
ZARD 220 | KS | 390162 | 1823808 | 102E | ?70 | 103 | 104 | 1 | 4.47 |
ZARD 221 incl incl | KS | 390162 | 1823808 | 102E | ?55 | 98 98 100 113 | 103 99 101 114 | 5 1 1 1 | 86.23 20.73 401.08 25.66 |
ZARD 222 incl incl | KS | 390177 | 1823869 | 102E | ?45 | 53 53 58 80 | 59 55 59 81 | 6 2 1 1 | 5.08 13.08 4.24 8.15 |
ZARD 223 incl incl incl | KS | 390116 | 1823853 | 102E | ?60 | 162 162 165 169 178 | 170 164 166 170 180 | 8 2 1 1 2 | 7.36 20.01 7.48 6.80 12.69 |
ZARD 224 | I P | 390284 | 1823940 | 282E | ?70 | 159 | 160 | 1 | 0.69 |
ZARD 225 | KS | 390284 | 1823940 | 282E | ?45 | No mi n e ra l i za ti o n in te rs e cte d | |||
ZARD 226 | IP ? KO | 390040 | 1822521 | 090E | ?60 | As s a ys Pe ndi ng | |||
ZARD 227 incl incl incl incl incl incl incl incl incl incl incl | KO | 390520 | 1821750 | 070E | ?50 | 83 90 98 146 156 159 161 180 223 256 267 281 | 282 91 99 147 158 160 162 181 225 260 268 282 | 199 1 1 1 2 1 1 1 2 4 1 1 | 0.93 1.98 3.85 38.44 2.34 2.06 2.80 10.25 14.65 21.04 1.85 1.01 |
Chalice Gold Mines Limited is an exploration and development company which owns a 60% beneficial interest in the high grade, open?pittable Koka Gold Deposit and a substantial, largely unexplored, land package in Eritrea. The Koka Gold Deposit consists of an "in?pit" JORC and NI 43?101 compliant Indicated Mineral Resource of 5.0 million tonnes grading 5.3 grams of gold per tonne, containing 840,000 ounces of gold. This Mineral Resource includes a Probable Mineral Reserve of 4.6 million tonnes grading 5.1 grams of gold per tonne, containing 760,000 ounces of gold. The Company is focused on developing the Koka Gold Deposit into a low cost gold mine, which is expected to produce 104,000 ounces of gold per year over a 7 year mine life at an average cash cost of US$338/oz gold (refer to the 43?101 Technical Report on the Koka Gold Deposit, Eritrea dated 27 July 2010). Chalice also
holds a substantial strategic ground position of 1,372 km2 consisting of licenses along strike of the Koka Gold
Deposit, and proximal to Nevsun's Bisha Mine. These exploration concessions host numerous, high potential,
early and advanced stage gold and base metal exploration targets. Chalice is undertaking a systematic exploration effort on these exploration concessions with the aim of discovering significant new deposits.
For further information, please contact:Tim Goyder, Executive Chairman
Dr Doug Jones, Managing Director
Chalice Gold Mines Limited
Telephone +61 9322 3960
For media inquiries, please contact:Nicholas Read
Read Corporate
Telephone: +618 9388 1474
For North American Investors, please contact:Dan Hrushewsky
Senior Vice?President Corporate Development dhrushewsky@chalicegold.com
Telephone: +1 647 864 2735
Joanne Jobin
North American Investor Relations Manager jjobin@chalicegold.com
Telephone: +1 647 964 0292
Competent Persons and Qualified Person Statement
The information in this news release 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 was a Qualified Person under National
Instrument 43?101 - 'Standards of Disclosure for Mineral
Projects' at the date the National Instrument 43?101 was
filed with the Toronto Stock Exchange. 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 was a Qualified Person under National Instrument
43?101 - 'Standards of Disclosure for Mineral Projects' at
the date the National Instrument 43?101 was filed with the
Toronto Stock Exchange. Mr Lee consents to the inclusion of
this information in the form and context in which it appears.
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 likelihood of exploration
success, the future implications of exploration results
reported herein, 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 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.
Cautionary Note
For readers to fully understand the information in this news
release, they should read the Technical Report for the Koka
Gold Deposit dated July 27,
2010 (available at www.chalicegold.com) in its
entirety, including all qualifications, assumptions and
exclusions that relate to the information set out in this
news release which qualifies the Technical Information.
Readers are advised that mineral resources that are not
mineral reserves do not have demonstrated economic viability.
The Technical Report is intended to be read as a whole, and
sections should not be read or relied upon out of context.
The technical information in the report is subject to the
assumptions and qualifications contained in the Technical
Report.
Sampling Procedures and Quality Assurance
Diamond drill core is logged and photographed prior to
splitting with a core saw. One half of the core is retained
on site whilst the other half is bagged and dispatched to the
Africa Horn Preparation facility (a division of
NATA?accredited Intertek?Genalysis Laboratories) in Asmara
for crushing to ?2mm and splitting. 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. The coarse reject
is stored and the split sub?sample is pulverized to a nominal
95% passing ?75 micron using an LM2 pulverizer.
The pulverized pulp is further split into two 100g to 150g
sub?samples; a primary pulp sample is sent for analysis and a
duplicate pulp sample is kept as a reference and the
remaining fine (?75 micron) reject is stored. A quartz wash
is pulverized between samples and is stored for random
testing of preparation contamination.
The sample pulps are transported by air to NATA?accredited
Intertek?Genalysis Laboratories in Perth Western Australia
for assay. For drill core and RC samples used for resource
analysis the majority of gold assaying is completed using a
lead collection of 50g fire assay method with an atomic
absorption spectroscopy (AAS) finish. Additional specified
multi?element assays are carried out by ICP?OES on 25g
sub?sample prepared using aqua regia digest. Bulk density
determinations using water immersion method are carried out
on every metre of core within expected mineralisation and
every 10m within waste zones. QA/QC monitoring is applied to
all drill core assays as per the protocols described above.
Figure 1: Location of Zara and other Chalice Gold Exploration Licences
Figure 2: Koka?Konate Corridor showing location of recent drilling
Figure 3: Koka South Prospect - geology and drillhole locations
Figure 4: Koka South - schematic long section showing drillhole pierce points and main intercepts (see Table 1 for full listing of intersections and gold grades)