Chalice Intersects massive sulphides at Mogoraib North

New massive VMS zone similar to Bisha mine discovered at Mogoraib North Project

By Equities.com,

Chalice Gold Mines Limited (ASX: CHN; TSX: CXN) is pleased to advise that it has intersected a zone of massive pyritic sulphides with significant copper and zinc values in drilling at its Mogoraib North Project in Eritrea, East Africa (Chalice – 60%; Eritrean National Mining Corporation (ENAMCO) – 40%).

Diamond drill hole MOGD-00021, part of a regional drilling program targeting potential Volcanic Hosted Massive Sulphide (“VHMS”) systems similar to the world-class Bisha Mine (Nevsun 60%: ENAMCO 40%) located 15km to the south, has intersected a 10 metre interval of massive pyritic sulphides within a broader 41 metre wide zone of stringer and disseminated sulphides.

The massive sulphides are hosted by a sequence of altered mafic rhyolitic and andesitic volcanics and contain visually identified chalcopyrite (copper iron sulphide) and sphalerite (zinc sulphide).

Systematic Niton-XRF readings on 10 cm centres along the section 145.3m to 155.5m (10.2m interval) averaged 1.07% copper and 2.25% zinc (see cautionary note below).

Chalice’s current drilling program is targeting Volcanic Hosted Massive Sulphide (“VHMS”) systems similar to the Bisha, Harena and Hambok deposits to the south of Mogoraib North and is based on the commonly developed clustering of such deposits.

The new prospect lies along the interpreted Bisha geological trend, 15km north of the Bisha operation. The characteristics of the sulphide mineralisation encountered in the Company’s discovery hole (MOGD-00021) indicate a VHMS affinity.

The prospect currently being targeted is one of numerous bedrock conductor targets generated by a 3,825km Versatile Time-domain EM (“VTEM”) survey flown by Chalice in 2011. In May 2012, following modelling and further refining and ranking of these targets, the Company embarked on a 5,000m diamond drilling program to systematically test these targets.

The VTEM anomaly tested by MOGD-00021, T209, is one conductor anomaly along a 4km strike length which hosts three other similar conductor anomalies. Several of these, including T209, are associated with coincident or adjacent gravity anomalies.

The Company is currently re-modeling the identified conductor targets within this zone based on the results from MOGD-00021 and will commence follow-up drilling immediately along strike. Sulphide-rich sections of the core from MOGD-00021 have been cut and assaying for a full multi-element suite will be expedited.

In addition, the Company will conduct a detailed ground gravity survey over the prospective 4km strike of the T209 cluster and is planning ground EM surveys as soon as appropriate equipment can be sourced.

Executive Chairman, Tim Goyder, said:

“This is an exciting moment for the Company. We applied for the Mogoraib North tenement on the basis of strong geological rational that alluvium covered areas to the north of Bisha should be prospective for VHMS mineralisation. The intersection in MOGD-00021 validates this belief and we look forward to undertaking further drilling to determine the extent of mineralisation and economic potential of this newly discovered zone.”