Chalice Gold to sell remaining 60% of gold project in Eritrea for $80m

This follows the agreement in July 2011 to which Chalice agreed to sell a 30% interest in the Zara Project to the Eritrean National Mining Corporation.

In addition a 10% carried interest in the project already held by ENAMCO.

SFECO will pay Chalice a further sum not to exceed $20m for the balance of the area falling within the Zara Project.

The Agreement with SFECO is subject to SFECO being satisfied with its due diligence which must be completed by 12March of this year.

SFECO procuring a letter indicating suitable financing by completion of due diligence and
completion of the sale of the 30% interest by Chalice to ENAMCO for $32m plus approximately $2m for the reimbursement of certain costs.

Assuming completion of the Transaction Chalice would be liable to pay tax to the Eritrean Government on the SFECO and ENAMCO proceeds at a rate of 38%.

This will be calculated after deducting the Company’s share of project to date costs of at least $30m.

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