Option agreement adds 12km2 to its existing East Cadillac Gold Project covering the highly prospective Larder Lake - Cadillac fault in Quebec .
Highlights:
- Chalice Gold Limited (ASX: CHN; TSX: CXN) has entered into a binding option and farm-in agreement with Khalkos Exploration Inc. (KAS.V) to acquire up to a 70% interest in the Forsan Gold Project in the highly endowed Abitibi region of Quebec, Canada .
- Chalice may acquire the interest through total option payments of C$375,000 and incurring exploration expenditures of C$1.75M within five years and shall grant a 1% Net Smelter Royalty to Khalkos on the claims.
- The project is located adjacent to Chalice's East Cadillac Gold Project and 6km north east of the former producing Chimo gold mine located at the eastern end of the prolific Archaean Abitibi greenstone belt, ~35km east of the >20Moz Val d'Or gold camp.
- The project comprises a total area of 12.4 km² and covers approximately 4.3km of a major parallel east-west trending fault 3.3 km north of the Larder Lake Cadillac fault.
PERTH , Western Australia , Dec. 12, 2017 /CNW/ - Chalice Gold Mines Limited (TSX:CXN; ASX:CHN) is pleased to announce that it has taken a further step towards consolidating a significant ground position in the Abitibi gold province in Quebec, Canada after entering into a binding option and farm-in agreement to acquire up to a 70% interest in the Forsan Gold Project ("the Project") from Khalkos Exploration Inc. ("Khalkos").
The Abitibi region of Canada is a premier gold district hosting multi-million ounce gold deposits that are preferentially sited on well-defined structural breaks, of which the Larder Lake -Cadillac fault hosts approximately 100Moz of gold in past production and current mineral resources.
The acquisition of the Forsan Gold Project adds to the already significant contiguous land position held by Chalice along the Larder Lake -Cadillac fault at its East Cadillac Gold Project (Figure 1).
The Forsan Gold Project
The Forsan property is located 45 km east of the town of Val d'Or, Quebec, Canada and 6 km north east of the former Chimo Mine. The project comprises 27 claims for a total area of 12.4 km² (Figure 2) and covers approximately 4.3km of a major parallel east-west trending fault 3.3 km north of the Larder Lake - Cadillac fault. Many of the gold deposits in the Val d'Or district including the Sigma Lamaque deposit, +9M oz Au, occur on similar second order faults.
Historical exploration between 1937 and 2009 has focused almost entirely on the Forsan Main and East zones resulting in the majority, approximately 3 km, of the east-west fault within the Project area being underexplored. The Company will commence a review of historical exploration results and merge the data with the Company's East Cadillac Gold Project to allow an integrated approach to exploration targeting over the Company's consolidated land position.
Option and Earn In Terms
Chalice can earn a 70% interest in the Project by making total option payments of C$375,000 to Khalkos and funding exploration expenditures of C$1.75 million over a period of five years (Table 1). Upon meeting these requirements and exercising the option, Chalice shall then grant a 1% Net Smelter Royalty ("NSR") to Khalkos on the claims on the basis that all royalties (including pre-existing royalties) do not exceed 3%. Chalice maintains a pre-emptive right over the Khalkos royalty.
Chalice has the right to withdraw without earning an interest in the Project at any time.
| Table 1. Forsan Gold Project option and farm-in commitments |
| Timing | Option Payments | Expenditure Commitment |
| Execution of binding agreement | C$100,000 | - |
| Year 1 | C$100,000 | C$250,000 |
| Year 2 | C$100,000 | C$350,000 |
| Year 3 (Chalice earns 51%) | C$75,000 | C$400,000 |
| Year 5 (Chalice may earn a further 19%) | - | C$750,000 |
|
|
|
| Total | C$375,000 | C$1,750,000 |
Chalice's Managing Director Tim Goyder said the agreement with Khalkos further enhanced and consolidated Chalice's position in a world-class gold district.
"The Abitibi is one of the world's most prolific and well known gold provinces and is host to numerous world-class deposits. Chalice is committed to the district and will continue to add to our strategic position covering the major regional fault system that controls a majority of the known gold mineralization in this region.
"We look forward to commencing an immediate review of the project in anticipation of defining targets for drill testing as soon as possible."
TIM GOYDER
Managing Director
Competent Persons and Qualifying Persons Statement
The information in this news release that relates to Exploration Results in relation to the Forsan Gold Project is based on information compiled by Dr. Kevin Frost BSc (Hons), 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 here.
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.
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, the estimation of mineral reserve and mineral resources, the realisation of mineral reserve estimates, the likelihood of exploration success at the Forsan Project, whether Chalice will elect to continue with the earn-into the Forsan Project, 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, will, may would, 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 may include, among others, risks related to actual results of current or planned exploration activities; changes in project parameters as plans continue to be refined; future prices of mineral resources; possible variations in mineral resources or ore reserves, grade or recovery rates; accidents, labour disputes and other risks of the mining industry; delays in obtaining governmental approvals or financing or in the completion of development or construction activities; 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
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