afr - report, page-7

Hello Bill

http://www.bloomberg.com/article/2012-05-04/adf34EcrrqHk.html

http://www.asx.com.au/asxpdf/20121130/pdf/42bmcq0rrg7mnn.pdf

Chalice has already entered into a 60:40 joint venture arrangement with the Eritrean National Mining Company (ENAMCO) on this project. Funding is on a two thirds Chalice and one third ENAMCO basis, taking into account the Eritrean Government’s 10 per cent free carried interest.

http://www.asx.com.au/asxpdf/20120504/pdf/4262ksmb97fk82.pdf

In consideration for ENAMCO acquiring its 30 per cent paid participating interest in the MHJV, subject to audit, ENAMCO will sole fund an estimated US$750,000 of exploration expenditures from 1 March 2012 This represents one third of historical project to date expenditures incurred at Mogoraib North and Hurum.

Assuming the Eritreans do not change the rules.

Costs will be less though as Hurum has been let go.

http://chalicegold.com/?id=231

http://chalicegold.com/upload/documents/InvestorRelations/releases/20130306ASXAnnouncement2012halfYear.pdf page 3

Chalice are very enthusiastic about Mogoraib north however and i would expect them to push on with it to get some idea what its long term potential is even if they end up flogging it to the Chinese for fifty million when it is worth twice that, it would still worth the cost expended on it.

Would expect all the board at Gip to think the same way over “non core” assets including Eritrea where the best returns are going to be from playing the long game.

Certainly nothing suggests to me that either Chalice or Gip do not understand the geological mineral potential of their areas.

Politically it is a lot more uncertain

http://www.asmarino.com/news/1686-exit-eritrea-how-could-it-all-end-for-isaias-afewerki2

http://www.asmarino.com/articles/1656-the-coup-fiasco-in-eritrea-and-its-scanty-support-

I would expect the present regime to lose out to the military as it has shown its weakness now and Isaias Afewerki is not being the force he was.

Any new military dictatorship will likely have to promise reforms and maybe elections if it wants to survive for any length of time though, or it would probably crumble away in turn.

Do not think you are looking at a popular uprising in the short term but i may be wrong.