great drillresults chalice, page-2

Monday, February 22, 2010

Chalice Gold Mines delivers more high gold grades latest drilling at Koka Gold Deposit.

East African-focused company Chalice Gold Mines (ASX: CHN) have received assays from 15 holes of the 31-hole, ~5,000 metre infill diamond drilling program at the Koka Gold Deposit in Eritrea.

Results received to date are consistent with previous drilling that indicated a decline in quartz stockwork development and gold grades at around 150 metres depth.

All 31 holes have now been completed with the last five holes currently being logged prior to processing through the sample preparation facility in Asmara and transport to Genalysis Laboratories in Perth, Western Australia for analysis.

The results, which will form part of the final resource estimate for the Koka feasibility study, include 6 metres grading 12.37 grams of gold per tonne in ZARD 135; 5 metres grading 21.90 grams of gold per tonne in ZARD 135; 10 metres grading 9.97 grams of gold per tonne in ZARD 136 and 4 metres grading 32.76 grams of gold per tonne in ZARD 137.

Further assay results will be released to the market as they become available.

Following completion of the infill drilling program, one of the drill rigs has moved to the Koka East Zone, which lies 80-100 metres into the hangingwall of Koka Main Zone. Planning for drilling of the Koka South Zone is in progress.

In the meantime one of the rigs will be employed on tailings dam foundation testing.

Four geotechnical holes have also been completed which will provide data on ground conditions in the pit highwall that will potentially allow a redesign of the pit to a lower strip ratio.

Koka, which is the flagship deposit at Chalices 80 per cent-owned Zara Project, has JORC compliant Indicated and Inferred resources of 944,000 ounces.

The Zara Joint Venture comprises four Exploration Licenses and two Prospecting Licenses covering an area of 615 km2 situated in northern Eritrea, approximately 160 km northwest of Asmara city.

Chalice holds an 80% interest in the project with the remaining 20% held by Dragon Mining (ASX: DRA). The Koka Gold Deposit within the project contains an estimated resource of 5 million tonnes of ore containing 944,000ozs gold, grading 5.8grams of gold per tonne. Metallurgical test work indicates +95% recovery with ~60% recovered by gravity.

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