Chalice Gold Mines Limited ('Chalice' or 'the Company', ASX: CHN | OTCQB: CGMLF) is pleased to report exciting preliminary results from a recently completed airborne electromagnetic (AEM) survey over granted tenure within the 100%-owned Julimar Project in Western Australia.

Commenting on the results, Chalice's Managing Director, Alex Dorsch, said: 'We have speculated for some time that the area north of our recent Gonneville discovery is highly prospective. We have now supported that claim with major new, laterally extensive geophysical targets from the first airborne EM survey over the Company's granted tenure, which is a very exciting and important development.

'Airborne EM is an effective first-pass screening technique that can detect shallow conductive sources, such as nickel sulphide mineralisation. It is important to emphasise though that our experience at Gonneville to date has shown that some high-grade mineralised zones do not necessarily have a strong EM response using either airborne or ground-based techniques. Therefore, the absence of a strong latetime airborne EM response does not preclude the presence of mineralisation elsewhere within the Julimar Complex.

'We are expecting initial feedback shortly regarding access to the State Forest for the next stage of reconnaissance exploration activities. We are hopeful of being able to assess the compelling new anomalies and aim to expand Julimar into a district-scale, multi-discovery opportunity. 'Meanwhile, our resource drill-out is continuing at Gonneville, with four rigs currently drilling and numerous assay results pending.'

Airborne EM survey

A helicopter-borne low frequency electro-magnetic (EM) survey was recently flown across the entirety of Chalice's granted tenure on 200m line spacing at the Julimar Project (155km2). The survey was designed to test for conductors within and proximal to the Julimar State Forest. Cultural sources (houses, wires, etc) were avoided where possible in the acquisition path flown by the helicopter. By also flying over Gonneville, the survey was able to calibrate against the known high-grade PGE-Ni-CuCo sulphide zones identified from ongoing drilling. The Gonneville G1 Zone hosts some of the highest-grade mineralisation within the Gonneville Intrusion and was successfully detected in the AEM survey.

The survey has outlined three new extensive EM anomalies within the Julimar State Forest - Hartog, Baudin and Jansz. The Hartog EM Anomaly, which extends for 6.5km directly north and along strike from Gonneville, is the highest priority target. The anomaly appears to be offset to the west of the magnetic response of the interpreted Julimar Complex. The most likely explanation for this is that, given its location directly along strike of Gonneville, it is potentially a less magnetic extension of the mafic-ultramafic Gonneville Intrusion.

The lack of outcrop in this region precludes a definitive geological interpretation, however non-magnetic mafic rock-types (gabbro) have been identified in drilling at Gonneville and therefore may occur elsewhere in the district. This suggests that less magnetic areas within the Complex may also be highly prospective - also a positive indication for EM Conductor X, currently being tested by diamond drilling immediately north-west of Gonneville. The peak AEM response of the Hartog anomaly is significantly stronger than the peak AEM response at the high-grade G1 Zone at Gonneville, indicating a potentially shallow, large conductive body that may represent sulphide mineralisation.

The Baudin EM Anomaly is located proximal to a discordant feature in the magnetic signature of the Julimar Complex, approximately 10km north-east of Gonneville within the State Forest. This area was previously sampled, with strongly anomalous Ni-Cu-Pd in soils identified in the area (refer to ASX announcement on 11 May 2020). The Jansz EM Anomaly is located approximately 18km north-east of Gonneville, partly within State Forest and partly on private land. The Baudin and Jansz anomalies are discernible in the early to mid-time channels only, potentially indicating surficial responses, however further modelling and ground EM is required to confirm the prospectivity of these targets.

Final geophysical survey data is yet to be received and it is possible that additional anomalies may be identified. The final modelled anomalies will be followed up with ground-based geophysics in order to define drill targets, upon access being granted to the Julimar State Forest.

Forward plan

The Company has been actively liaising with the Department of Biodiversity, Conservation and Attractions (DBCA) and the Department of Mines, Industry, Resources and Safety (DMIRS) regarding the development of a Conservation Management Plan (CMP) for non-ground disturbing, reconnaissance exploration activities within the Julimar State Forest. Proposed activities include ground-based geophysics as well as wide-spaced geochemical soil sampling over the entire Julimar Complex, including the three new AEM anomalies. These activities are anticipated to have negligible impact on the environment and community. Any targets generated from these activities would be drill tested, subject to a second stage CMP approval. Chalice will continue to work co-operatively with regulatory agencies regarding environmental approvals for future exploration.

Contact:

Alex Dorsch

Tel: +61 8 9322 3960

Email: info@chalicegold.com

About the Julimar Nickel-Copper-PGE Project, Western Australia

The 100%-owned Julimar Nickel-Copper-PGE Project is located 70km north-east of Perth in Western Australia on private land and State Forest. The Project was staked in early 2018 as part of Chalice's global search for high-potential nickel sulphide exploration opportunities. Chalice interpreted the possible presence of a mafic-ultramafic layered intrusive complex at Julimar based on high-resolution regional magnetics. The large complex is interpreted to be 26km long and is confirmed to be highly prospective for nickel, copper and platinum group elements. Prior to Chalice's exploration, the Julimar Complex had never been explored for these metals.

Chalice commenced a systematic, greenfield exploration program in mid-2019 in the southern portion of the Project, on private land, targeting high-grade Ni-Cu-PGEs. An initial RC drill program commenced in Q1 2020 and resulted in the discovery of high-grade nickelcopper-cobalt-PGE mineralisation at the newly named Gonneville Intrusion. Drilling to date has established the 1.6km x 0.8km Intrusion has widespread zones of PGE mineralisation as well as several wide zones of high-grade PGE-Ni-Cu-Co +/- Au. The significant discovery established the new West Yilgarn Ni-Cu-PGE Province.

Four high-grade massive / matrix / heavily disseminated sulphide zones have been intersected to date, which are up to 30m wide and have been defined over a 400m x 350m area. The zones typically have a grade range of 3-15g/t PGEs, 0-1.2g/t Au, 0.5-3.3% Ni, 0.4-4.5% Cu and 0.03-0.27% Co. Broad intervals of PGE mineralisation have been confirmed in all holes drilled to date at the Intrusion and disseminated sulphides (trace to 3% on average) have been identified down to 450m below surface.

Disseminated sulphide zones intersected to date typically have a grade range of 0.5-2.0g/t PGEs, 0.1-0.2% Ni, 0.05-0.15% Cu and 0.01-0.03% Co. In general, metal content appears to show a positive correlation with sulphur content and levels of potentially deleterious elements (arsenic, cadmium, selenium) are all low. Weathering appears to extend down to 30-40m below surface and a well-developed saprolite profile after serpentinite contains elevated PGE grades (typically ranging from 1.2-4.5g/t PGEs) from near surface to a depth of 25m.

About Platinum Group Elements and Palladium

The Platinum Group Elements (PGEs) are a group of six precious metals clustered together on the periodic table: platinum (Pt), palladium (Pd), iridium (Ir), osmium (Os), rhodium (Rh) and ruthenium (Ru). PGEs have many desirable properties and as such have a wide variety of applications. Most notably, they are used as auto-catalysts (pollution control devices for vehicles), but are also used in jewellery, electronics and hydrogen fuel cells.

Palladium is very rare and is currently one of the most valuable precious metals, with an acute supply shortage driving prices to a recent record high of US$2,856/oz in February 2020. The current spot price is approximately US$2,300/oz. Strong demand growth (11.5Moz in 20191) is being driven by regulations requiring increased use of the metal, particularly as an auto-catalyst in gasoline and gasoline-hybrid vehicles. The total palladium market supply from all sources in 2019 was 10.8Moz, and >75% is sourced from mines in Russia and South Africa1.

Forward Looking Statements

This report may contain forward-looking information within the meaning of Canadian securities legislation and forwardlooking 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 report and Chalice Gold Mines Limited (the Company) does not intend, and does not assume any obligation, to update these forwardlooking 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 Company's strategy, the price of O3 Mining securities, the estimation of mineral reserve and mineral resources, the realisation of mineral resource estimates, the likelihood of exploration success at the Company's projects, the prospectivity of the Company's exploration projects, the existence of additional EM anomalies within the project, the timing of future exploration activities on the Company's exploration projects, planned expenditures and budgets and the execution thereof, the timing and availability of drill results, potential sites for additional drilling, 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', 'planning' 'expects' or 'does not expect', 'is expected', 'will', 'may', 'would', 'potential', 'budget', 'scheduled', 'estimates', 'forecasts', 'intends', 'anticipates' or 'does not anticipate', 'believes', 'occur', 'impending', 'likely', 'indicative' or 'be achieved' 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; assay results of visually interpreted mineralised intersections; whether geophysical anomalies are related to economic mineralisation or some other feature; obtaining access to undertake additional exploration work on EM anomalies located in the Julimar State Forrest; the results from testing EM anomalies; results of planned metallurgical testwork; changes in project parameters as plans continue to be refined; changes in exploration programs based upon the results of exploration; 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; movements in the share price of O3 Mining securities and future proceeds and timing of potential sale of O3 Mining securities, the impact of the COVID 19 epidemic 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, ASX at asx.com.au and OTC Markets at otcmarkets.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.

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