Updated mineral resource for Nordeau West deposit provides foundation for expanded exploration program at East Cadillac Gold Project, Quebec

Chalice has filed on SEDAR (www.sedar.com), a National Instrument 43-101 "Technical Report and Mineral Resource Estimate for the East Cadillac Gold Project, Val-d'Or, Quebec" dated February 12, 2017, which includes the updated mineral resource for the Nordeau West deposit. The report can also be viewed at www.chalicegold.com.

The mineral resource estimate is summarised below:

1. Mineral resources are not mineral reserves and do not have demonstrated economic viability. 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.  All figures are rounded to reflect the relative accuracy of the estimate and therefore numbers may not appear to add precisely.
2. The independent mineral resource estimates for the Nordeau West deposit was prepared by MRB & Associates, ("MRB") of Val d'Or, Quebec and is reported and classified in accordance with National Instrument NI 43-101.
3. The mineral resources in this news release were estimated using the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Standards on Mineral Resources and Reserves, Definitions and Guidelines prepared by the CIM Standing Committee on Reserve Definitions and adopted by the CIM Council.

Chalice previously reported a historical mineral resource for the Nordeau West deposit in a news release dated October 11, 2016; the updated mineral resource estimate confirmed that historical estimate.

The Nordeau West deposit occurs on the Nordeau property, where Chalice has the option to earn 100% from Globex Mining Enterprises Inc. ("Globex") under the terms outlined in a previous ASX release dated October 12, 2016.

The Nordeau West deposit is one of a cluster of gold deposits and occurrences that include the historical Chimo gold mine (owned by Cartier Resources Inc. – TSX-V: ECR), located 1.5km to the west, and the Nordeau East deposit, located 2km east – all hosted by discrete structural zones in either mafic volcanics and mafic intrusives (Piche Volcanics) or along the contact of overlying Timiskaming sediments and intercalated Banded Iron Formation (see Figure 1). 

Chalice is currently compiling a 3D interpreted model of the Nordeau West deposit with the aim of evaluating potential extensions to the deposit and identifying other favourable structures or contacts that have not been previously tested.

An early observation from the compilation of historical exploration data is the lack of exploration over the southern contact of the Piche Volcanics against Pontiac sediments. It is expected that this contact will be further explored through a comprehensive surface sampling program scheduled to commence in mid-May 2017.

Chalice's Managing Director, Tim Goyder, said: "The updated resource for the Nordeau West deposit provides our team with an excellent foundation to unlock the value in our newly consolidated land package in the southern Abitibi gold province. A comprehensive field program will commence shortly including high-resolution geophysics, surface geochemistry and diamond drilling, with an initial program of drilling to test immediate strike extensions of the Nordeau West deposit itself.

"Future drilling will be designed to test a combination of targets, including the down-plunge extension of the Nordeau West deposit, where only a few historic holes extend more than 600m below surface. Similar potential is envisioned for the Nordeau East zone, located approximately 1km along strike to the east, and elsewhere along the remaining 16km prospective strike length within the property, where the majority of drilling to date has been within ~250m of surface.

"We are very optimistic about the potential of this relatively underexplored segment of the Larder Lake-Cadillac fault and look forward to commencing the upcoming exploration program."

About the mineral resource

The mineral resource estimate was prepared using a database incorporating 121 surface diamond drill holes (41,278m) drilled between 1981 and 2008, 96 historical drill holes (27,744m) drilled in early campaigns and 25 more recent diamond drill holes (13,352m) drilled between 2006-2008. 

Indicated and inferred mineral resources have been delineated within two domains in the Nordeau West deposit covering an area 775m in  length by 100m in width by 650m deep.

Key assumptions, parameters, and methods used to estimate the mineral resource

Assumptions
A gold price of US$1,250/oz and a corresponding exchange rate of CDN$/US$ of 1.1 was utilized in the Au cut-off grade calculations of 2.75 g/t for a potentially economic underground mining operation.  A mining cost of $115/t and process cost of $30/t was used to constrain the resource estimate.  No considerations were made for mining dilution, process recovery, smelter payable, or gold refining.

Geological Interpretation
The Nordeau West deposit is a structurally-controlled gold deposit located in Larder Lake-Cadillac fault, a first-order structural zone which hosts in excess of 100 million oz Au in the Archaean Abitibi sub-Province of the Superior Craton.  The Nordeau West deposit occurs as a series of two main mineralised domains comprising quartz vein/shear-hosted deposit localized within predominantly mafic volcanic/intrusive rock-types (Piche Volcanics) near the contact with iron formation sediments.  Gold mineralization occurs in association with quartz and quartz-carbonate veins parallel to the schistosity and carbonate-sericite-sulphide alteration in ductile shear zones.

Sampling Techniques
Drill holes are mostly orientated sub-perpendicular to the interpreted strike of the deposit.  Diamond drill core was either cut by core saw or mechanical splitter.  Drill core completed since 2006 was cut by core saw core saw with half submitted for assay and the remaining half core preserved in core trays.  Samples are mostly 1m in length and sampled to contain geologically consistent intervals.

Drill Techniques
Drill holes were collared with mud-rotary to start of bedrock which is usually 10-20m down-hole from surface. Drilling techniques used at Nordeau West were either NQ diameter or smaller diamond drill coring. 

Sample Preparation and Analyses
In the more recent drilling programs, from 2004 onwards, that comprise 25 of 121 drillholes used in the mineral resource estimation gold, was assayed by fire assay/atomic absorption (AAS) and samples with visible gold by metallic screen/fire assay/AAS techniques.  Details of sample preparation and analyses have not been recorded in historic work reports for drilling completed pre-2006.

Validation and Classification
The resultant gold block model was validated by visually comparing the estimated block grades with the capped-composite grades in cross section and plan views. 

Classification for the Nordeau West mineral resource estimate is based on continuity of mineralization and grade using drill hole spacing and quality, variography and estimation statistics.  The mineral resources have been classified as indicated and inferred.

Estimation Methodology
Estimation was carried out using inverse distance squared algorithm into a 3-D Gemcom block model with X-Y-Z (i.e. east-west, north-south, vertical) block dimensions of 5.0m x 2.5m x 5.0m. Variable grade capping by mineralized domain was accomplished at Au values ranging from 2.5 g/t to 187.90 g/t. A bulk density of 2.90 t/m3 was used for all tonnage calculations. Grade interpolation was completed using two passes based on two search ellipse ranges.  The search ellipse dimensions for the Indicated category were 50m x 35m x 15m from a block centroid, with a minimum 2 drill holes and maximum of 24 samples; the area of influence of the Inferred category is 100m x 70m x 20m from a block centroid with a minimum of 1 drill holes and maximum of 24 samples. Indicated Resource grade estimates were calculated by applying Ellipse 1 first, followed by a second interpolation using Ellipse 2 and only updating only previously unestimated blocks.   A second series of grade interpolations were completed for Inferred Resource grade estimates using two search ellipse searches. A total of 17,824 grade blocks are categorized as Indicated Resources (25%) and 52,416 grade blocks are categorized as Inferred Resources (75%) from a total of 70,240 estimated grade blocks.

Cut-off grades
Reporting of the mineral resources uses a gold cut-off grade of 2.75g/t gold to reflect potential underground mining methods and reasonable prospects for economic extraction.

Metallurgy
No metallurgical assumptions have been used in the resource models

TIM GOYDER
Managing Director

Qualifying Persons Statement

The information in this report that relates to mineral resources in relation to the East Cadillac Gold project is based on information compiled by Mr John Langton, P.Geo., Principal, MRB & Associates.  Mr John Langton is a consultant to the company and has sufficient experience in the field of activity being reported to qualify 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 Langton consents to the release of information in the form and context in which it appears here.

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 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.

SOURCE Chalice Gold Mines Limited