Mr. Alex Dorsch reports

CHALICE FURTHER EXPANDS ITS STRATEGIC POSITION IN THE WORLD-CLASS ABITIBI GREENSTONE BELT IN CANADA THROUGH NEW FARM-IN DEAL

Chalice Gold Mines Ltd. has further expanded its strategic footprint in the world-class Abitibi gold belt in Quebec, Canada, after securing an option and farm-in agreement over a prospective package of ground immediately adjacent to its East Cadillac gold project.

The company has entered into a binding option agreement to acquire up to an 80-per-cent interest in the Denain-Pershing project from Renforth Resources Inc.

The acquisition of the project adds to the already regionally significant contiguous land position held by Chalice along the prolific Larder Lake-Cadillac fault, with the total strike coverage now exceeding 27 kilometres, over a total area of about 245 square kilometres.

The Denain-Pershing project

The Denain-Pershing project is located about 55 km east of the town of Val d'Or in Quebec, and comprises 184 contiguous claims for a total area of about 100 square kilometres. The claims include about 11 kilometres of Larder Lake-Cadillac fault.

The Val d'Or district, which includes Chalice's East Cadillac gold project, is one of the more prolific gold producing areas in Canada, having contributed more than 20 million ounces of gold production to the approximately 84 million ounces of gold produced along the Larder Lake-Cadillac structure.

The project is largely unexplored, with limited historical drilling defining several gold showings on the western and northeastern parts of the claims. Renforth completed an airborne magnetic survey over the entire property in late 2017 that will allow Chalice to better define the continuation of the Larder Lake-Cadillac fault as it extends through the western portion of the project.

Planned work program

The company will begin merging all historical Renforth exploration data, including existing drill data, into the East Cadillac project database. This will facilitate an integrated approach to exploration targeting over the consolidated land position.

Initially, a coarse grid surface soil and rock sampling program will be conducted over the summer season (June, 2018, through October, 2018). Once results are processed, it is expected that a surface geophysics program will be conducted to define drill targets.

Option agreement terms

Chalice may earn an 80-per-cent interest in the project by making total option payments of $200,000 to Renforth and financing exploration expenditures of $1.25-million over a period of three years. Chalice has the right to withdraw without earning an interest in the project at any time.

   
   DENAIN-PERSHING PROJECT OPTION AGREEMENT KEY COMMERCIAL TERMS
   
Timing                          Option payments   Expenditure commitment

Execution of binding agreement          $50,000                        -                     
Year 1                                  $50,000                 $200,000             
Year 2                                  $50,000                 $400,000             
Year 3 (Chalice earns 80 per cent)      $50,000                 $650,000             
Total                                  $200,000               $1,250,000           

Upon completing all obligations under the agreement and forming a joint venture, the agreement is subject to usual joint venture dilution terms including reverting to a 2-per-cent net smelter return upon either party diluting its project interest to less than 10 per cent, unless the aggregate royalties payable to any party in respect of a particular claim would exceed 3 per cent, in which case the royalty rate will be reduced such that the maximum aggregate royalty is 3 per cent. The Denain-Pershing claims have pre-existing NSR royalties of up to 2 per cent.

As part of the transaction, Chalice will also subscribe to $250,000 worth of ordinary shares in Renforth, subject to price and terms to be agreed. Should the share placement not be completed by May 31, 2018, or if the terms are not agreed, the remaining terms of the option agreement shall continue to apply. Shares taken up pursuant to the placement will be subject to a four-month statutory escrow period. The option agreement is subject to satisfactory completion of due diligence primarily in relation to matters of tenure.

Chalice's chief executive officer, Alex Dorsch, said: "The agreement with Renforth further enhances and consolidates our already significant position in the world-renowned Abitibi, extending our exploration footprint along the key gold-hosting structure in the region, the Larder Lake-Cadillac fault. We are looking forward to kicking off our exploration programs in the near future, applying modern exploration techniques and methodologies for the first time in this region to advance this exciting project as quickly as possible."

Background on 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 kilometres 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. Chalice has completed a regional-scale geochemistry, geophysics and about 27,000 metres of diamond drilling program on the project since acquiring the project in 2016. The project is a consolidation of several earn-in option agreements (Chalice earning 70 per cent to 100 per cent) and Chalice's 100-per-cent-owned claims.

Competent persons and qualifying persons statement

The information in this report that relates to exploration results in relation to the Denain-Pershing project is based on information compiled by Dr. Kevin Frost, BSc (honours), PhD, who is a member of the Australian Institute of Geoscientists. Dr. Frost is a full-time employee of the company and has sufficient experience in the field of activity being reported 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 release of information in the form and context in which it appears in this news release.

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