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From: Berhane Habtemariam (Berhane.Habtemariam@gmx.de)
Date: Tue Sep 14 2010 - 17:37:15 EDT
<http://chalicegold.com/upload/documents/InvestorRelations/releases/20100913
ASXAnnouncement-FirstAssaysfromKonateDrillingFINAL.pdf> New Gold Discovery
at Konate Confirms Zara Exploration Potential
Published Date: September 14, 2010
Chalice Gold Mines Limited is pleased to advise that it has discovered a
significant new zone of gold mineralisation at the Konate prospect, located
5km south of, and along strike from, the 840,000oz Koka Gold Deposit at its
Zara Project in Eritrea.
Konate is the first prospect to be drill tested within a 6km long highly
prospective corridor, extending to the south of Koka. Chalice believes this
corridor has the potential to host additional high-grade gold deposits,
similar to that at Koka, where the Company is proposing to develop a high
grade, low cost open pit gold mine.
As announced on July 13, 2010, Chalice completed a Feasibility Study on the
Koka Gold Deposit in July confirming the potential for a robust and viable
gold development based on open pit probable reserves of 760,000oz grading
5.1g/t gold.
The first results from diamond drilling at Konate reveal significant grades
and widths of gold mineralisation, with best intersections to date of 3m @
12.79g/t gold from 120m (drill hole ZARD 177) and 4m @ 11.65g/t gold from
109m (drill hole ZARD 185) within broader zones of lower grade gold
mineralisation.
ZARD 185 intersected fresh quartz stockwork mineralisation in a microgranite
host over a down-hole width of 30m (close to true width) from 109m depth.
Better grade mineralisation is associated with higher concentrations of
sulphides, predominantly pyrite, including the high grade intersection 4m @
11.65g/t. This is a style of mineralisation similar to that hosting the high
grade mineral resources and mineral reserves in the Koka Gold Deposit.
ZARD 177 was drilled 65 metres north of ZARD 185 on an oblique 40 metre
section and intersected quartz stockwork mineralisation over a 22m width.
Better intersections were again associated with pyrite concentrations and
included the high-grade intersection of 3m @ 12.79g/t.
The Company currently has a diamond rig drilling double-shift at Konate and
is considering adding an additional rig to expedite evaluation of the 600
metre long zone defined by extensive past artisanal workings.
Commenting on the results, Chalice Managing Director Doug Jones said: "While
it's still early days at Konate, these first results are highly encouraging
as they demonstrate significant gold grades and widths. Drilling to date
suggests that the system is open at depth and to the south, so we are
continuing an aggressive drilling program to further delineate the geometry
and characteristics of this very promising new discovery.
The location of this high grade gold discovery just 5 kilometres south of
the planned Koka operation means that it has the potential to positively
impact the already robust economics of our core project by providing
additional feed to the Koka mill.
It also reinforces the broader prospectivity of our tenement holdings at
Zara and in particular the enormous exploration upside within the 6km long
Koka-Konate corridor, where we are currently focusing much of our
exploration attention - with drilling underway at Konate and a major
deeppenetrating IP survey set to commence within weeks."
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