Sale to First Mining Finance, page-13

PROJECT SALE DELIVERS CHALICE GOLD A PIECE OF CANADA'S 'MINERAL BANK' FIRST MINING

4 May 2016

Source: Mining Business Media
Toronto, May 4

Australian-based explorer/developer Chalice Gold has parleyed its 2013 acquisition of the Cameron gold project into a significant shareholding in growing Canadian "mineral bank" First Mining Finance.

After building a measured+indicated resource of 569,000oz (7.8Mt @ 2.26g/t) gold at the Ontario project, Chalice has sold its 100%-owned subsidiary Cameron Gold Operations to First Mining in return for 32.3M shares and a 1% net smelter royalty on production from the project's exploration licences that are not already subject to royalties.

Chalice has also consolidated a regional tenement position and identified promising new exploration targets nearby and regionally since buying the project from Coventry Resources in 2014.

Chalice will end up with about 8.1% of First Mining, which has built a portfolio of 25 projects in Canada, the US and Mexico.

They include the Springpole and Pickle Crow projects in Ontario, Duquesne project in Quebec and Hope Brook project in Newfoundland.

First Mining would be better placed to unlock the value of the Cameron project given its domicile in North America and the experience of its board and key management, Chalice MD Tim Goyder said.

"With their unique business model of aggressively acquiring advanced projects in North America and a well-known and proven management team, First Mining is ideally placed to realize the value of this asset in an improving commodity price environment," he said.

"We look forward to being part of that process through our significant shareholding in First Mining, which provides us with continued exposure to the Cameron project and exposure to First Mining’s portfolio of other assets."

Together with its First Mining interest, Chalice maintained a $A37M cash balance to pursue other opportunities.

“The successful completion of this sale would place Chalice in an enviable position in the current market and will give us a tremendous platform from which to grow the Company and take advantage of new opportunities as they arise,” Goyder said.

The sale of Cameron Gold Operations is subject to Chalice shareholder approval.