Resource World Magazine

O C T O B E R / N O V E M B E R 2 0 1 9 www.resourceworld.com 39 Australian Update by Greg Barns I t's a good time to be a gold explorer with the precious metal soaring courtesy of sub-zero interest rates, the US-China trade war and a possible recession. Chalice Gold Mines Limited [CXN-TSX, ASX; CGMLF-OTCQB] is one cashed up gold explorer worth watch- ing. It has a sizeable land package in Victoria, near the world class Bendigo and Fosterville projects. At the other end of the Australian continent, in the Kimberly region of Western Australia, Chalice Gold is drilling out the promising King Leopold nickel project. Chalice Gold, Perth-based, has around US $22M in working capital and another US $11M in investments. It has not had to raise capital since 2011 which makes it unusual among Australian gold explorers. So the company is well placed to develop its Pyramid Hill gold project which cov- ers 5,140 km 2 located north and west of the Bendigo Zone and the Fosterville Mine owned by Kirkland Lake Gold Ltd. [KL-TSX, NYSE; KLA-ASX]. The ground which is held by Chalice Gold lies in a his- torically rich, and as the Fosterville Project is demonstrating, an underexplored area. Just under 60Moz of gold production has come from outcropping areas in the South Bendigo Zone, at an average grade of around 15 g/t gold. Fosterville has been in production for many years now, and is forecast to produce up to 610,000 ounces of gold this calendar year. Earlier this year, Kirkland Lake announced an impressive 60% increase in Mineral Reserves to 2,720,000 ounces grading 31.0 g/t, up from 1,700,000 ounces at 23.1 g/t. The focus of Chalice Gold is on major regional north-south structures under the thin, highly variable, Murray Basin cover. This is an area that is under-explored. A Victorian state government report has esti- mated an undiscovered gold endowment of 32Moz gold in this northern Bendigo Zone, of which Chalice Gold holds around 60% in what is a 7,000 km 2 prospective area. The focus of Chalice Gold's exploration is focused on its Phase 1 exploration which has successfully defined three large-scale areas (Ironbark, Karri and Beech) of gold and pathfinder anomalism in basement under shallow Murray Basin cover. A 24,500-metre reconnaissance air core (AC) drill program is set to commence in late September. A total of 7,500 metres of the 24,500-metres of drilling is planned at the Ironbark Target. Phase 1 drilling inter- sected up to 1.1 g/t gold in quartz veining within an approximately 380-metre diam- eter diorite intrusion. The company says that petrological studies on the intrusive has confirmed it as a highly prospective mineralized diorite, pointing to a potential high-grade Walhalla-Woods Point style target. The historical Walhalla-Woods Point goldfield in eastern Victoria hosted several high-grade diorite related gold deposits including Cohen's Reef (~1.5Moz at ~32g/t Au), Morning Star (~800koz at ~26g/t Au) and A1 (~620kozat ~32g/t Au). Based on regional aeromagnetics, the company says that the diorite intrusion intersected at Ironbark is interpreted to be much larger than the smaller diorite dykes at Walhalla- Woods Point. At the Karri Target, 10,500 metres of drilling is planned to follow up on Phase 1 drilling which returned several wide- spaced, shallow gold intersections up to 0.66 g/t gold over some 15km of strike. The company will undertake step-out drilling on 1-km spaced lines and 100-200- metre spaced holes to refine the target for infill and deeper drilling. A total of 4,000 metres of drilling is planned at the Beech Target. The company said, in a September 2 announcement, "Phase 1 drilling inter- sected highly anomalous pathfinder elements in basement ~25km north-west of Bendigo (~22Moz at ~15g/t Au) along the Sebastian Fault. Step-out drilling is planned on 1-2km spaced lines and 100- 200-metre spaced holes to refine the target for infill drilling." Chalice Gold will focus the remaining 2,500 metres of drilling in another deposit at Muckleford. The region where Chalice Gold is oper- ating is primarily farming country which means that drilling is restricted in some areas to 3-4 months a year. But Chalice Gold has government approvals and land access arrangements in place. The company has around 1,800 km 2 at the King Leopold nickel sulphide proj- ect. A maiden drilling program began in September focusing on areas identified by a Moving-Loop Electromagnetic (MLEM) survey completed over four previously identified airborne EM targets. n Chalice Gold exploring multiple Australian targets IT'S A GOOD TIME TO BE A GOLD EXPLORER WITH THE PRECIOUS METAL SOARING COURTESY OF SUB-ZERO INTEREST RATES, THE US-CHINA TRADE WAR AND A POSSIBLE RECESSION.

• Cover