Mr. Nick Appleyard reports

CHAPARRAL GOLD ANNOUNCES FILING AND MAILING OF NOTICE OF CHANGE TO DIRECTORS' CIRCULAR

Chaparral Gold Corp. has filed with the Canadian regulators, and has mailed to its shareholders, an updating notice of change to the company's directors' circular in response to the revised hostile takeover bid made by Waterton Precious Metals Fund II Cayman LP on July 17, 2014, to acquire 100 per cent of the common shares of the company at 55 cents per share in cash.

The notice of change contains the unanimous recommendation of the company's board of directors that the Chaparral shareholders reject the revised offer by waterton and not tender their common shares.

The board's recommendation to shareholders to reject the revised offer is based on numerous factors, including the recommendation of the special committee of independent directors and an opinion provided by the company's financial adviser, Maxit Capital LP, with respect to the financial inadequacy of the revised offer by Waterton. The full text of the opinion is attached as schedule A to the notice of change.

The board urges the company's shareholders to read the notice of change in its entirety. A copy of the notice of change will be available on SEDAR under the company's profile.

The following is a summary of the principal reasons listed in the notice of change for the board's recommendation that shareholders reject the revised offer by Waterton and not tender their common shares:

• The revised offer implies insufficient value for the company's mineral properties:
  • The revised offer is not credible as it implies that the company's two open-pit, heap-leach gold projects in Nevada are immaterial at March 31, 2014, to the company's value. The revised offer, net of the company's estimated working capital, implies a value of only approximately $4.8-million (U.S.) for Chaparral's mineral properties. Comparatively, the book value of Chaparral's mineral properties is approximately $50-million (U.S.) (at March 31, 2014). Effectively, Waterton is using Chaparral's cash and receivables to finance Waterton's proposed acquisition of Chaparral.
• The timing of the revised offer is opportunistic:
  • Waterton is attempting to acquire Chaparral when Chaparral is negotiating for an acceptable "limited ability to pay" settlement with the U.S. Environmental Protection Agency (EPA) for the Eureka smelter issue. By minimizing the potential liability associated with this issue by way of such a settlement, it is expected that alternative higher-value proposals for the company will emerge.
• The revised offer is highly coercive:
  • After eight extensions and never having had more than 1.1 per cent of the common shares tendered to its original offer, Waterton is dropping its minimum tender condition, which is highly coercive to shareholders and a clear attempt to secure a minority blocking position to thwart Chaparral's strategic alternative process before Chaparral can reach a settlement with the EPA.
• The revised offer fails to recognize the strategic value of the company's asset base in mining-friendly Nevada;
• The revised offer is significantly below precedent multiples for similar-scale gold developers;
• The revised offer represents an inadequate premium to the share price;
• The revised offer is financially inadequate;
• Rejection of the revised offer by the company's directors and officers;
• The revised offer is highly conditional.

For these reasons, the board unanimously recommends that shareholders reject the revised offer and not tender their common shares to the revised offer. Shareholders that have already tendered their common shares to the revised offer and wish to withdraw them may do so by following the withdrawal procedures provided in Section 7 of the Waterton offering circular.

We seek Safe Harbor.