Renegotiation of option agreement gives Chalice 100% ownership of gold deposit near Cameron Project
Symbol: ASX: CHNTSX: CXN
Shares outstanding: 287 million
Fully diluted: 291 million
PERTH, Western Australia, July 23, 2014 /CNW/ - Chalice Gold Mines ("The Company") ASX:CHNTSX:CXN is pleased to advise that it has acquired the Dubenski Gold Deposit in Ontario Canada for C$700,000 by successfully renegotiating an existing option agreement. The acquisition gives Chalice 100% ownership of the gold deposit located within 10km of the Cameron Gold Project.
The previous option agreement with the vendor included an exercise price of C$3,500,000 (exercisable on or before April 30, 2017) plus a 2.5% Net Smelter Royalty. The Dubenski deposit contains an Indicated Resource of 806,000 tonnes at 2.28 g/t for 59,000 ounces and an Inferred Resource of 392,000 tonnes at 1.44 g/t for 18,200 ounces at a cut-off grade of 1g/t to a depth of 150m below surface.
Dubenski is located on Chalice's West Cedartree Project, less than 10km to the west of the Cameron Gold deposit and provides an important additional potentially open pittable source of material to the existing Resources at the Cameron Project.
Key Acquisition Terms
The key terms and conditions of the Acquisition include:
- A consideration payment of C$700,000; and
- An additional payment on all gold production mined in excess of 70,000 ounces (being US$13 per ounce where the gold price is less than or equal to US$1,500 per ounce and US$16 per ounce where the Gold price is greater than US$1,500 per ounce).
The transaction is conditional upon any approvals and consents that may be necessary under the legal and regulatory regime to which the Dubenski Gold Deposit is subject.
Dubenski Project Background
The Dubenski Project consists of two contiguous mining leases covering 377 ha within the West Cedartree Project.
Gold mineralisation at Dubenski is hosted by a sub-vertical shear zone over a strike of 400m that is up to 20m wide and has been delineated to a vertical depth of more than 150m. The mineralisation consists of fine-grained pyrite and free gold associated with carbonate, sericite, silica and locally, fuchsite alteration within strongly-deformed mafic volcanic rocks. The mineralisation is open in all directions.
Chalice's Managing Director Bill Bent said, "We are very pleased to have renegotiated the acquisition of the Dubenski deposit on favourable terms. Dubenski will make an important contribution to our goal of continuing to grow and enhance the Cameron Gold Project by securing additional high-grade ounces in the region both through exploration success and acquisition."
Competent Persons and Qualified Person Statement
The information relating to the mineral resource estimates reported herein for Dubenski is derived from the sections of the Technical Report dated February 5, 2014 prepared for Coventry Resources Limited by Mr. Peter Ball of Datageo Geological Consultants who is a Chartered Professional and Member of the Australasian Institute of Mining and Metallurgy. Mr. Ball 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. Mr. Ball consents to the inclusion in the announcement of the matters based on his information in the form and context in which it appears.
Forward Looking Statements
This document may contain forward-looking information within the meaning of Canadian securities legislation and forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995 (collectively, "forward-looking statements"). These forward-looking statements are made as of the date of this document and Chalice Gold Mines Limited (the Company) does not intend, and does not assume any obligation, to update these forward-looking statements, except as required by law or regulation.
Forward-looking statements relate to future events or future performance and reflect Company management's expectations or beliefs regarding future events and include, but are not limited to, statements with respect to the estimation of mineral reserves and mineral resources, the realisation of mineral reserve estimates, the likelihood of exploration success, the timing and amount of estimated future production, costs of production, capital expenditures, success of mining operations, environmental risks, unanticipated reclamation expenses, title disputes or claims and limitations on insurance coverage.
In certain cases, forward-looking statements can be identified by the use of words such as plans, expects or does not expect, is expected, budget, scheduled, estimates, forecasts, intends, anticipates or does not anticipate, or believes, or variations of such words and phrases or statements that certain actions, events or results may, could, would, might or will be taken, occur or be achieved or the negative of these terms or comparable terminology. By their very nature forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such factors include, among others, risks related to actual results of exploration activities; changes in project parameters as plans continue to be refined; future prices of mineral resources; possible variations in ore reserves, grade or recovery rates; accidents, labour disputes and other risks of the mining industry, as well as those factors detailed from time to time in the Company's interim and annual financial statements, all of which are filed and available for review on SEDAR at sedar.com. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements.
Accordingly, readers should not place undue reliance on forward-looking statements.
SOURCE: Chalice Gold Mines Limited
For further information: please contact: Bill Bent, Managing Director, Tim Goyder, Executive Chairman, Chalice Gold Mines Limited, Telephone +61 9322 3960; For media inquiries, please contact: Nicholas Read, Read Corporate, Telephone: +618 9388 1474