Chalice Gold to acquire Globex’s interest in Nordeau

Oct 13, 2016

CHALICE ENTERS OPTION TO ACQUIRE HIGHLY PROSPECTIVE ABITIBI GOLD PROJECT IN QUEBEC

Chalice Gold Mines Ltd. has entered into a binding option sheet allowing Chalice to acquire all of Toronto Stock Exchange-listed Globex Mining Enterprises Inc.’s interest in the Nordeau gold project. The project consists of claims owned 100 per cent by Globex and certain claims where Globex has a 60-per-cent interest.

Highlights

Chalice Gold has entered into a binding option term sheet with Globex Mining Enterprises to acquire Globex’s interest in the Nordeau gold project located in the highly endowed Abitibi region of Quebec, Canada.
The Nordeau gold project is located about 40 kilometres east of Val d’Or and includes approximately nine km of strike length of the Larder Lake-Cadillac fault, one of the most prolific gold endowment trends in the southern Abitibi that hosts several multimillion-ounce gold deposits.
Chalice may acquire the interest in the Nordeau gold project through total option payments of $590,000 and incurring exploration expenditures of $2.5-million over four years.
Chalice shall grant a 3-per-cent gross metal royalty to Globex upon exercising the option.
The project includes a reported historical National Instrument 43-101 mineral resource estimate.
The project is located about one km east of the former producing Chimo gold mine which operated in three periods from the 1960s to 1997.
This project together with Chalice’s Kinebik gold project (located about 170 km north of the Nordeau gold project) on the Casa Beradi fault is part of Chalice’s strategy of acquiring quality gold projects on proven gold trends, such as the Abitibi region of Canada.

Chalice may acquire the interest in the project by making annual option payments totalling $590,000 over four years to Globex (including an initial payment of $120,000 in the first year) and undertaking exploration expenditures of $2.5-million also over a four-year period as set out in the table. Upon exercising the option Chalice will grant a 3-per-cent gross metal royalty to Globex (there are currently no existing royalties in relation to the project and no government royalties). Chalice has the right to withdraw without earning an interest in the project at any time.

The agreement is subject to satisfactory completion of due diligence primarily in relation to matters of tenure.

The Nordeau gold project

The Nordeau gold project is located about 40 km east of Val d’Or and comprises approximately 1,450 hectares of claims located over about nine km of strike length of the Larder Lake-Cadillac fault. The project is located about one km from the former Chimo gold mine that operated over three periods from the 1960s through to 1997. Underground mining at Chimo was undertaken on multiple gold lodes that extended up to 870 metres below surface demonstrating that gold systems in the area have a significant vertical extent.

Previous exploration of the Nordeau gold project has located gold mineralization along structural trends on, or parallel to, the main lithological contacts between mafic volcanics, mafic intrusives, iron formation and Timiskaming sedimentary rock sequences.

Previous drilling of 121 diamond drill holes on the property has provided the basis for a historical mineral resource which was compliant with the reporting standard of National Instrument 43-101. In 2009, Plato Gold Corp. commissioned an NI 43-101 technical report and mineral resource estimate of Nordeau West following drilling undertaken up to 2006 to 2007.

Gold grades were determined using an inverse-distance-squared algorithm into a 3-D (Gemcom) block model with x-y-z (that is east-west, north-south, vertical) block dimensions of five m by 2.5 m by five m. At a cut-off grade of 2.75 grams per tonne gold, the historical mineral resource contains an indicated mineral resource of 225,342 tonnes at 4.17 g/t Au (30,212 ounces Au) and an inferred mineral resource of 1,112,321 t at 4.09 g/t Au (146,315 ounces Au). A qualified person has not undertaken sufficient work to classify the historical mineral resource as current and therefore cannot be relied upon. Should the company wish to prepare a current mineral resource estimate it will recalculate the mineral resource using current inputs and assumptions.

The NI 43-101 technical report, entitled “Technical Report – Nordeau Gold Mineral Properties,” has an effective date of March 1, 2009. The historical mineral resource estimate was completed by Alex Horvath, PEng, of A.S. Horvath Engineering, a qualified person as defined by NI 43-101. Note in all cases that the historical mineral resource is not a mineral reserve and does not have demonstrated economic viability.

A qualified person has reviewed the technical report and believes that the historical resource estimate was conducted in a professional and competent manner. The company has not solely relied on the historical mineral resource in its decision to acquire an interest in the project. However, the historical mineral resource was prepared by a qualified person in accordance with NI 43-101 and therefore the company considers the historical mineral resource to be reliable.

The historical mineral resource is located on claims which are 100 per cent owned by Globex. The mineralization remains open at depth and Chalice considers the potential as excellent for locating additional gold mineralization.

The Nordeau gold project also contains a separate zone of gold mineralization known as Nordeau East, however the reporting of this mineral resource was undertaken in 1988 prior to NI 43-101 and Chalice has not verified the mineral resource to report it in this news release. However, the mineralization appears open at depth and Chalice intends to undertake a detailed review of the drilling results as a priority.

Exploration undertaken elsewhere on the property has intersected gold mineralization east of Nordeau East which appears poorly tested. Chalice is excited by the potential of the Nordeau gold project and plans to undertake an immediate review of all previous exploration results.

                       NORDEAU GOLD PROJECT OPTION AND FARM-IN COMMITMENTS 
  
Timing                                          Option payments  Annual expenditure commitments

Upon satisfactory completion of due diligence          $120,000                              $-
Year 1                                                  170,000                         350,000
Year 2                                                  140,000                         500,000
Year 3                                                  140,000                         500,000
Year 4                                                        -                       1,150,000
Exercise of option                                       20,000                               -
Total                                                   590,000                       2,500,000

Managing director Tim Goyder said: “Chalice has secured rights to a highly prospective advanced exploration asset showing strong indications of high-grade gold mineralization in a world-class gold district. In combination with the company’s Kinebik project, Chalice has now increased its foothold in the highly endowed Abitibi region. We look forward to commencing exploration activities as soon as possible.”

Competent person and qualified person statement

The information in this news release that relates to the Nordeau gold project is based on information compiled by Dr. Kevin Frost, BSc (honours), 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, mineral 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 on the 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.

http://www.chalicegold.com/investor-relations/asx-announcements/2016.html