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Chalice Gold Mines Ltd
Symbol CXN
Shares Issued 266,568,134
Close 2018-10-25 C$ 0.15
Market Cap C$ 39,985,220
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Chalice Gold defines gold anomalies at East Cadillac

2018-10-25 12:09 ET - News Release

Mr. Alex Dorsch reports

CHALICE GOLD MINES LIMITED - NEWLY DEFINED LARGE-SCALE GOLD ANOMALIES PRIORITISED FOR DRILL TESTING AT EAST CADILLAC GOLD PROJECT, QUEBEC

Chalice Gold Mines Ltd. has defined several new, high-priority, large-scale, gold-in-soil anomalies at its East Cadillac gold project in Quebec, Canada, based on extensive surface geochemistry programs completed during the 2018 summer field season. The newly defined anomalies represent priority drill targets.

The recent soil, rock chip and geophysical programs were designed to expand regional data coverage and define new regional drill targets for the upcoming winter drilling season. The program builds on previous regional work, completed by Chalice in 2017, which included reconnaissance soil, rock chip and bark geochemistry, as well as light detection and ranging (LiDAR), aeromagnetic, and 3-D IP geophysical surveys.

The results of the previous phase of work were used to design and execute the approximate 28,700-metre reconnaissance diamond drilling program completed in the second quarter of 2018. This drill program identified two significant new zones of mineralization at the Lac Rapides and North Contact prospects, and confirmed the potential for large-scale gold systems on the district-scale East Cadillac project.

Chalice's chief executive officer, Alex Dorsch, said: "The latest results confirm that East Cadillac is highly prospective for large-scale gold systems, and that the exploration toolkit we are applying gives us the best chance of vectoring towards a substantial discovery. This potential is further underlined by the prospective geological setting of the project in the prolific Val d'Or district, and its location along strike from several multimillion-ounce gold deposits and mines.

"Since acquiring and consolidating the project, we have systematically explored the area and made substantial progress in a relatively short period of time. We are very excited about the upcoming drilling program and we look forward to receiving results as our exploration activities ramp-up."

Surface geochemistry and geological mapping program

The surface geochemical and geological mapping programs were completed during June and September, 2018. A total of 1,504 mobile metal ion (MMI) soil samples were collected from both newly optioned/acquired claims, and infill samples were collected over target areas defined from the wide-spaced 2017 soil sampling program.

The MMI soil sampling results have identified four new significant gold and pathfinder soil anomalies in areas subject to limited or no previous drilling.

                                MMI SOIL ANOMALY PROPERTIES
  
Anomaly name    Approx. length at   Approx. width at   Peak MMI gold value   Associated pathfinder
                  4RR contour (km)   4RR contour (km)      (response ratio)               elements

Legrand                       3.4          Up to 1.3                    22               As, Bi, W
Anderson                      2.3          Up to 0.5                    22            Minor Ag, Bi
Marquise                      1.4          Up to 0.7                    20              As, Sb, Ag
Makwa                   Up to 1.5          Up to 0.3                    10               W, Ag, Cu

The Legrand gold-in-soil anomaly is coherent and covers a large surface area within a five-kilometre-by-four-kilometre area of anomalous arsenic and tungsten with minor bismuth. No bedrock geology outcrops were recognized in this area although aeromagnetic interpretation suggests that the Legrand anomaly overlies Pontiac sediments, which also host significant gold deposits elsewhere in the region including the Canadian Malartic gold deposit, located approximately 70 km to the west-northwest.

The Legrand anomaly overlies a zone of interpreted complex structure in an area of folded sedimentary rocks transected by thrust faults and intruded by felsic dikes, all of which suggests a favourable setting for orogenic gold mineralization. In addition, the distribution of anomalous pathfinder metals in soils has a similar pattern of the metal zonation documented for the Canadian Malartic gold deposit which displays a zonation from proximal Au-W to distal caesium-lithium-thallium. The Legrand anomaly has not been previously drill tested and is to be prioritized for drilling in the upcoming winter program.

The Anderson anomaly is a strong coherent gold-in-soil anomaly defined over a strike length of 2.3 kilometres and located about 2.5 km north of the Larder Lake-Cadillac fault zone (LLCFZ). The east-west orientation is similar to other subparallel structures that host the Forsan gold deposit and other gold occurrences in the northern mafic succession. The anomaly is also to be prioritized for drill testing.

Rock chip sampling conducted during the 2018 field season has identified a 1.2 km long zone of anomalous gold mineralization, with assays up to 39 grams per tonne Au, located between one to 2.5 km east of the recent Lac Rapides gold discovery. Gold mineralization is associated with pyrite and/or arsenopyrite alteration in and around quartz veins in banded-iron formation. Limited historic drilling in this area has not intersected significant gold mineralization however, given the strong association of gold with sulphide mineralization, it is likely that the planned 3-D IP survey will allow a better definition of potential targets for testing.

Sampling techniques

Mobile metal ion soil and quality assurance/quality control samples

Chalice sampling consists of 1,504 mobile metal ion (MMI) soil and QA/QC samples. Soil samples were collected from between 10 to 30 centimetres below surface. For every 20 samples collected, a sand blank and field duplicate are inserted with all batches dispatched to the laboratory. Results are reported for all 1,504 MMI soil samples.

MMI soil samples are processed as received. MMI soil samples are analysed by SGS Laboratories in Burnaby, B.C., Canada, using laboratory technique GE_MMI_M which is a proprietary partial leach analysis.

Rock chip and QA/QC samples

Sampling includes 157 rock chip and QA/QC samples. Samples collected from available outcrops, which occur sporadically in the areas traversed. For every 20 samples collected, a certified standard and blank are inserted with all batches sent to the laboratory.

Rock chip samples are dried and crushed to 70 per cent passing two millimetres, then riffle split to 250 grams, which is pulverized to better than 85 per cent passing 75 microns. Samples are analyzed by ALS Laboratories in Val d'Or, Que., Canada, using laboratory techniques ME-MS61, Au-AA23 and Au-GRA21.

Geophysical surveys

New aeromagnetic and LiDAR geophysical surveys were completed in June to August, 2018, on newly acquired tenure to expand existing LiDAR and helicopter-based aeromagnetic coverage to the north and west of the main Larder Lake-Cadillac fault. In conjunction with field geological mapping, these surveys have improved the company's geological understanding of the known gold occurrences throughout the project area.

Proposed future work

A 3-D IP OreVision survey commenced in early October to extend existing coverage along the Larder Lake-Cadillac fault for an additional approximate seven km east of the 2017 survey area (which covered about 16 km of strike). The grid is also being extended to the south to cover the new Legrand anomaly to the southeast of Lac Rapides. Survey results are expected by the end of December.

The recently received results are being incorporated with the previously acquired data to design a diamond drill program planned for the upcoming winter drill season, to commence in January, 2019. The program will be designed to test the new surface anomalies as well as testing several zones along strike from existing mineralization. Existing targets will be refined and additional drill targets may be added to the program once the 3-D IP survey results are finalized in late December.

About the East Cadillac gold project

The East Cadillac gold project covers an area of 245 square kilometres and is located about 35 km east of the greater than 20-million-ounce Val d'Or gold camp in Quebec, Canada. With landholdings encompassing a strike length of 27 km of the Larder Lake-Cadillac fault, the most prolifically endowed gold trend in the southern Abitibi, the project is situated amongst some of the region's most significant mines and surrounds the historical Chimo gold mine, owned by Cartier Resources.

Qualifying persons statement

The information in this report that relates to exploration results in relation to the East Cadillac project is based on information compiled by Dr. Kevin Frost, BSc, PhD, a competent person and qualifying person, who is a member of the Australian Institute of Geoscientists. Dr. Frost is a full-time employee of the company and has sufficient experience that is relevant to the activity being undertaken to qualify as a competent person as defined in the 2012 edition of the Australasian Code for Reporting of Exploration Results, Minerals Resources and Ore Reserves, and is 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. Dr. Frost consents to the inclusion in the announcement of the matters based on his information in the form and context in which it appears.

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