non-binding letter

Chalice Signs Non-Binding Letter of Intent for Zara Gold Project, Eritrea

Symbol: ASX: CHN TSX: CXN
Shares outstanding: 250 million
Fully diluted: 258 million

PERTH, Western Australia, Dec. 12, 2011 /CNW/ - Chalice Gold Mines (ASX: CHN; TSX: CXN) advises that it has signed a Letter of Intent with an entity setting out a proposal for terms upon which that entity may acquire Chalice's interest in the Zara Gold Project.

The proposal is non-binding and incomplete and the directors advise that no assurance can be given that any binding transaction will result.

The directors expect to be able to advise of any further developments within the next 14 days.