Chalice Gold Mines - Updated 652,000oz measured and indicated mineral resource and 917,000oz inferred mineral resource for Cameron Gold Project

Key Points:

• The updated total mineral resource for the Cameron Gold Project ("the Project") in Ontario, Canada (including the Cameron deposit and the satellite Dubenski and Dogpaw deposits) is:
  • Measured and indicated – 8.88Mt grading 2.29 g/t gold for 652,000 ounces
  • Inferred – approximately 14.92Mt at 1.91 g/t gold for 917,000 ounces
    
    
• The updated mineral resource estimate for the Cameron deposit (within the Project, and excluding the satellite Dubenski and Dogpaw deposits) comprises:
  • Measured and indicated – 7.82Mt grading 2.26g/t gold for 569,000 ounces
  • Inferred – approximately 14.46Mt grading 1.92g/t gold for 894,000 ounces
    
    
• The updated mineral resource follows the re-logging of 771 diamond drill-holes (~102,000m of drilling), assaying of an additional ~30,000 new samples and the construction of a new comprehensive geological model for the Cameron deposit.
  
  
• This re-logging and sampling program has successfully achieved its core objective of updating the mineral resource for the Cameron deposit, supporting construction of a modern 3D geological model and further clarifying the controls on mineralisation at the Cameron deposit.
  
  
• The updated mineral resource estimate for the Cameron deposit has resulted in a 39% increase in ounces of gold and 13% increase in gold grade within the measured category.

PERTH, Western Australia, Nov. 16, 2015 /CNW/ - Chalice Gold Mines Ltd. (TSX:CXN; ASX:CHN) is pleased to announce an updated mineral resource estimate for its 100%-owned Cameron Gold Project in Ontario, Canada. Independent specialist resource and mining consulting group, Optiro Pty Ltd, has completed an updated mineral resource for Cameron, the main deposit included within the larger Cameron Gold Project. The mineral resource is based on an extensive re-logging program of the existing 771 diamond drill-holes completed earlier this year, assay results from approximately 30,000 new samples collected from existing core, and the construction of a new geological model.

The updated total measured, indicated and inferred mineral resource for the Cameron Gold Project, including the main Cameron deposit and the satellite Dubenski and Dogpaw deposits (which remain unchanged from those previously announced), is summarised below in Table 1:

Table 1: Consolidated Cameron Gold Project mineral resource estimate

The updated mineral resource represents an important milestone in advancing the Project. As part of the Company's preparation and timing of a new Preliminary Economic Assessment ("PEA"), Chalice will now focus on exploration to add additional potentially economic open-pit ounces in close proximity to the Cameron deposit. Results from an extensive summer exploration program recently completed are currently being compiled and interpreted. 

1.       Cameron Gold Project Overview

The Cameron Gold Project is an advanced resource project located in the highly mineralised southern part of western Ontario in Canada, approximately 80km south-east of the town of Kenora (Figure 1). The Project has a number of attractive attributes, including high grades, low political risk in a mature mining jurisdiction with low costs, high gold recoveries by conventional metallurgy, and a large-sized gold project that is well within Chalice's funding and development capability.

2.       Mineral Resources for the Cameron Deposit (excluding Dubenski and Dogpaw)

The Company has successfully achieved its immediate core objective of updating the mineral resource estimate, constructing an updated 3D geological model and further clarifying the controls on mineralisation at the Cameron deposit.  As a result of this increased understanding, the geological risks associated with the mineral resource model have been reduced, resulting in a more robust mineral resource estimate.

The updated mineral resource estimate follows the re-logging of approximately 102,000m of historical surface and underground diamond drill core (771 holes) for the Cameron deposit. Approximately 30,000 new samples were also collected from existing core within or immediately adjacent to the known mineralisation, assays for which have been added to the mineral resource model.

The methodology used in constructing the 2015 geological model and resource was to lay out complete diamond drill holes on a section by section basis. Holes were then logged by geologists for alteration, lithology, structure and quartz veining. The geological logs were captured electronically then transferred to A0 paper section for daily interpretation by the logging geologists. Interpretation involved creating geological shapes for each of the above criteria, including mineralization shapes, digitizing those shapes with SURPAC 6.6.2 and checking both in section and in plan that the shapes honoured the geology. While logging the core, the geologists selected additional samples for assay which were assayed at Actlabs in Canada, an independent and accredited laboratory using fire assay techniques. This process was repeated progressively through the mineralized envelope to build a well constrained geological model. Regular standards, blanks and duplicates were added to ensure appropriate QA/QC.

The geological and mineralization models were validated on site and then transferred to Optiro, a respected independent Australian resource modelling and evaluation consultancy. Optiro independently built geological and mineralization models from the data, conducted independent QA/QC and finally compared the two models. Variations between the two models were discussed, resolved and a final geological and resource model built. 

In building the new mineral resource, Optiro used Leapfrog Geo 3D and SURPAC 6.6.2 software.  Mineralized envelopes defined by Leapfrog were then manually reviewed and adjusted where appropriate to align with the geological and mineralization models.  The block estimates are validated against the composites both globally and spatially. The block estimates are classified according to geological confidence, grade continuity, data density, kriging variance and location. Exploration drill density from holes completed by prior operators varies from 20m x 20m pattern to 40m x 20m pattern through the mineral resource, while true thickness of mineralised zones varies from five to more than 30m true thickness. Diamond drilling from the underground development was carried out by prior operators on section spacing ranging from 4m to 15m along strike.  A composite length of 1m was used for modelling the mineral resource, with a minimum composite length of 0.45m, while all boundaries are treated as hard boundaries.

Grade estimation parameters are optimised for each resource block. On the basis of the overall low coefficient of variation and low nugget observed in the variography of the better sampled lodes, grade estimation by ordinary kriging of the capped composites was undertaken.  Block modelling and grade estimation was undertaken in SURPAC 6.6.2 software. Blocks on the margins of the mineral resource that were not estimated after the third pass have an assigned grade based on the nearest estimated block. Density is assigned using lithology and mineralisation coded average values derived from 14,868 measurements. For interpretation, no grade cut-off has been applied. For the reporting of the mineral resource a cut-off grade of 0.5g/t Au was applied.

Key risks identified were survey methods for historical holes and incorrectly labelled standards in the QA/QC. Where Optiro felt the risk was not acceptable the holes were excluded from the mineral resource estimate. As a result, the remaining holes on which the mineral resource is calculated are considered of a quality acceptable to meet JORC 2012 and CIM 2014 standards.

The updated Cameron geological model has defined eight zones of continuous mineralisation. The distribution of these zones are shown in Figures 2 and 3 below:

The distribution of measured, indicated and inferred mineral resources within the Cameron deposit is shown in Figures 4 and 5 below. Of particular importance is the fact that the bulk of the measured and indicated mineralisation lies within 250m of surface, and there is little to no overburden.

The Cameron deposit grade-tonnage curve is shown in Figure 6.

3.       Material Changes from Previous Mineral Resource Estimate

The updated mineral resource estimate for the Cameron deposit represents a significant improvement compared with the previous mineral resource released in 2014, including a 39% increase in the measured category gold ounces from 227,000oz to 316,000oz, a 31% decrease in the indicated category from 365,000oz to 253,000oz and a 57% increase in the inferred category from 569,000oz to 894,000oz. This has been accompanied by a 13% increase in the grade within the measured category from 2.33g/t Au to 2.64g/t Au, a 1% increase in the grade within the indicated category from 1.90g/t Au to 1.92g/t Au and a 29% decrease in the grade within the inferred category from 2.69 g/t Au to 1.92 g/t Au.

The changes in global figures are mainly due to the use of a 0.5g/t Au cut-off grade in comparison to the 0.5g/t Au and 1.75g/t Au cut-off grades used in 2014.  There is also a change in the level of selectivity applied to the mineralisation interpretations that models variable grade sub-domains within the mineralisation wireframes.  This technique was applied to represent and optimize the metal distribution within the shear zone system.  These changes are shown in Table 2 below (note: the July 2014 mineral resource figures are "pre-mining" and the November 2015 mineral resource totals have been depleted for material mined in the underground workings).

The improvement in conversion of mineral resources from the Indicated category to the measured category is a result of the re-logging and additional sampling exercise which has significantly improved the geological understanding of the controls on mineralisation, as well as the increased number of assay data points in the new model.  It also represents the confidence in the geological and grade continuity within the measured mineral resource domain derived from closely spaced drilling, exposure of the deposit by underground development of ore drives, bulk sampling of the mined material, detailed mapping, and robust geological interpretations underpinning the mineralisation model.

The change in the inferred mineral resource category is due to the 0.5 g/t Au cut-off grade applied to the reporting of the November 2015 mineral resource.  The increase in reported tonnage and reduction in grade reflects the updated interpretations and the inclusion of material below the 1.75 g/t Au cut-off grade applied in the 2014 mineral resource estimate.  The use of a higher grade cut-off grade for mineralisation at depth will be determined by studies. 

Table 2: Change in measured, indicated and inferred mineral resource between 2014 and 2015 resources


The 2014 resource statement was separated into "open cut and underground" resources based on the results of the 2013 PEA previously prepared by Coventry Resources Inc. Until a revised PEA is undertaken, it is not possible to separate these mineral resources into potential open pit versus underground Mineral Resources.

4.       Dubenski and Dogpaw Deposits

The mineral resources for the Dubenski and Dogpaw deposits have not changed since announced by the Company on 29 July 2014 in a news release titled "Chalice Files Updated 43-101 Technical Report".


5.       JORC 2012

Further details on sampling techniques, reporting of exploration results and estimation and reporting of mineral resources can be found within the JORC 2012 tables by clicking here.

(signed)
TIM GOYDER, Managing Director
16 November 2015



Competent Person and Qualifying Person Statements

Cameron Deposit

The information relating to the mineral resource estimates reported herein for the Cameron deposit is based on information compiled by Mr Mark Drabble who is a Member of the Australasian Institute of Mining and Metallurgy and a Member of the Australian Institute of Geoscientists. Mr Mark Drabble is an employee of Optiro Pty Ltd who are independent consultants to the Company. Mr Drabble has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 edition of the Australasian Code for Reporting of Exploration Results, Mineral 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. Mr Drabble consents to the inclusion in the announcement of the matters based on his information in the form and context in which it appears.

The information in this report that relates to Exploration Results in relation to the Cameron deposit is based on information compiled by Mr Gary Snow, who is a Fellow of the Australasian Institute of Mining and Metallurgy and is a Fellow of the Australian Institute of Geoscientists. Mr Snow 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 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.  Mr Snow consents to the release of information in the form and context in which it appears here.


Dubenski and Dogpaw Deposits

The information relating to the Dubenski and Dogpaw deposits are extracted from the ASX Announcement entitled "Chalice Files Updated 43-101 Technical Report" released on 29 July 2014 and is available to view at www.chalicegold.com.  The company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcement and, in the case of estimates of mineral resources, that all material assumptions and technical parameters underpinning the estimates in relation to these deposits in the relevant market announcement continue to apply and have not materially changed.  The Company confirms that the form and context in which the Competent Person's findings are presented have not materially modified from the original market announcement.


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 Ltd. (the Company) does not intend, and does not assume any obligation, to update these forward-looking statements except as required by law.

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, preparation of a future PEA at the Cameron Gold Project, the results of business development activities which may result in a corporate transaction or investment, the estimation of mineral reserve and mineral resources, the realisation of mineral reserve estimates, 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; the impact of additional logging and sampling at the Cameron Project on currently disclosed mineral resources; 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 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.

Note to US Investors

This news release has been prepared in accordance with the requirements of the securities laws in effect in Australia and Canada, which differ from the requirements of United States securities laws.  The terms "mineral resource", "indicated mineral resource" and "inferred mineral resource" are defined in and required to be disclosed by JORC 2012 standards and NI 43?101; however, these terms are not defined terms under SEC Industry Guide 7 and are normally not permitted to be used in reports and registration statements filed with the SEC. Investors are cautioned not to assume that all or any part of an "indicated mineral resource" or "inferred mineral resource" will ever be upgraded to a higher category or converted into mineral reserves in accordance with Guide 7.  "Inferred mineral resources" have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility.  It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category.  Under Australian and Canadian rules, estimates of inferred mineral resources may not form the basis of feasibility or pre?feasibility studies, except in rare cases.  Investors are cautioned not to assume that all or any part of an inferred mineral resource exists or is economically or legally mineable.  Disclosure of "contained ounces" in a mineral resource is permitted disclosure under Australian and Canadian regulations; however, the SEC normally only permits issuers to report mineralisation that does not constitute "reserves" by SEC Industry Guide 7 standards as in place tonnage and grade without reference to unit measures.  Accordingly, information contained in this News Release contain descriptions of the Company's mineral deposits that may not be comparable to similar information made public by U.S. companies subject to the reporting and disclosure requirements under the United States federal securities laws and the rules and regulations thereunder.

Shares outstanding: 283 million
Fully diluted: 292 million



Contact

Tim Goyder, Managing Director
Chalice Gold Mines Ltd.
Telephone +61 9322 3960

For media inquiries, please contact:
Nicholas Read, Read Corporate
Telephone: +618 9388 1474