CHALICE MINING LIMITED — Capital/Financing Update 2006

Jun 28, 2006

Rule 2.7, 3.10.3, 3.10.4, 3.10.5

Appendix 3B

New issue announcement. application for quotation of additional securities and agreement

Information or documents not available now must be given to ASX as soon as available. Information and documents given to ASX become ASX's property and may be made public.

Introduced 177/96. Origin: Appendix 5. Amended 177/98, 1/9/99, 177/2000, 30/9/2001, 11/3/2002, 1/1/2003, 24/10/2005.

Name of entity

Chalice Gold Mines Limited

ABN

47 116 648 956

We (the entity) give ASX the following information.

conversion price and dates for

Part 1 - All issues

You must complete the relevant sections (attach sheets if there is not enough space).

$\mathbf{1}$ ⁺Class of ⁺securities issued or to be Unlisted options to acquire un-issued fully paid issued ordinary shares. $\overline{2}$ Number of *securities issued or to 500,000 be issued (if known) or maximum number which may be issued 3 Principal terms of the *securities Exercise price: \$0.25 (eg. if options, exercise price and Vesting date: 250,000 on 1 May 2007 and expiry date; if partly paid 250,000 on 1 May 2008 *securities, the amount outstanding Expiry date: 1 May 2011 and due dates for payment; if *convertible securities, the

conversion)

⁺ See chapter 19 for defined terms.

$\overline{4}$ Do the *securities rank equally in all respects from the date of allotment with an existing "class of quoted *securities?

If the additional securities do not rank equally, please state:

• the date from which they do
• the extent to which they
  participate for the next dividend, (in the case of a trust, distribution) or interest payment
• the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment

$\overline{5}$ Issue price or consideration Nil consideration.

Purpose of the issue 6 (If issued as consideration for the acquisition of assets, clearly identify those assets)

Options issued to new employee pursuant to the Employee Share Option Plan.

$+$ See chapter 19 for defined terms.

• $\boldsymbol{7}$ Dates of entering ⁺securities into uncertificated holdings or despatch of certificates
• $\mathbf{g}$ Number $^+$ class and $of$ all *securities quoted on ASX (including the securities in clause 2 if applicable)
• $\overline{Q}$ Number and *class of all *securities not quoted on ASX (including the securities in clause 2 if applicable)

28 June 2006
Number	+ Class
72,800,000	Ordinary Fully Paid Shares
Number	+ Class
6,075,000 500,000	Unlisted Options: \$0.25 Exp: 21/3/2011 \$0.25 Exp: 1/5/2011

$10$ Dividend policy (in the case of a $N/A$ trust, distribution policy) on the increased capital (interests)

Part 2 - Bonus issue or pro rata issue

$11$ Is. security holder approval required?

$N/A$

• 12 Is the issue renounceable or non- $N/A$ renounceable?
• 13 Ratio in which the $*$ securities will $\blacksquare$ $N/A$ be offered
• ⁺Class of ⁺securities to which the $N/A$ $14$ offer relates
• 15 ⁺Record date determine | $N/A$ $\mathbf{f}$ entitlements
• 16 Will holdings on different registers (or subregisters) be aggregated for calculating entitlements?
• 17 Policy for deciding entitlements in $N/A$ relation to fractions

N/A

⁺ See chapter 19 for defined terms.

18	Names of countries in which the entity has *security holders who will not be sent new issue documents Note: Security holders must be told how their	N/A
	entitlements are to be dealt with. Cross reference: rule 7.7.
19	Closing οf date for receipt acceptances or renunciations	N/A
20	Names of any underwriters	N/A
21	Amount of any underwriting fee or commission	N/A
22.	Names of any brokers to the issue	N/A
23	Fee or commission payable to the broker to the issue	N/A
24	of any handling Amount fee payable to brokers who lodge acceptances or renunciations on behalf of *security holders	N/A
25	If the issue is contingent on *security holders' approval, the date of the meeting	N/A
26	Date entitlement and acceptance N/A form and prospectus or Product Disclosure Statement will be sent to persons entitled
27.	If the entity has issued options, and the terms entitle option holders to participate on exercise, the date on which notices will be sent to option holders	N/A
28.	Date rights trading will begin (if applicable)	N/A
29.	Date rights trading will end (if applicable)	N/A
30	How do $*$ security holders sell their $N/A$

⁺ See chapter 19 for defined terms.

entitlements in full through a broker?

• $31$ How do ⁺security holders sell part $\overline{N/A}$ of their entitlements through a broker and accept for the balance?
• 32 How do *security holders dispose of their entitlements (except by sale through a broker)?

33 ⁺Despatch date

$N/A$

Part 3 - Quotation of securities

You need only complete this section if you are applying for quotation of securities

• 34 Type of securities (tick one)
• $(a)$ Securities described in Part 1

All other securities

Example: restricted securities at the end of the escrowed period, partly paid securities that become fully paid, employee incentive share securities when restriction ends, securities issued on expiry or conversion of convertible securities

Entities that have ticked box 34(a)

Additional securities forming a new class of securities

				Tick to indicate you are providing the information or
documents

35

37

$(b)$

If the *securities are *equity securities, the names of the 20 largest holders of the additional *securities, and the number and percentage of additional *securities held by those holders

-36	If the "securities are "equity securities, a distribution schedule of the additional *securities setting out the number of holders in the categories $1 - 1.000$ $1.001 - 5.000$ $5,001 - 10,000$ $10,001 - 100,000$ $100.001$ and over

A copy of any trust deed for the additional *securities

$N/A$

⁺ See chapter 19 for defined terms.

Entities that have ticked box 34(b)

38	Number of securities for which + quotation is sought	N/A
39.	Class of *securities for which quotation is sought	N/A
40.	Do the securities rank equally in all respects from the date of allotment with an existing class of quoted + securities?	N/A
	If the additional securities do not rank equally, please state: the date from which they do ۰ which extent to. the. they participate for the next dividend, the case (in- of a. trust. distribution) or interest payment the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment
41	Reason for request for quotation now Example: In the case of restricted securities, end of	N/A
	restriction period (if issued upon conversion – of another security, clearly identify that other security)
42	Number and + class of all + securities quoted on ASX (including the securities in clause 38)	Number 72,800,000	*Class Ordinary Fully Paid Shares

⁺ See chapter 19 for defined terms.

Ouotation agreement

• $\mathbf{I}$ *Quotation of our additional *securities is in ASX's absolute discretion. ASX may quote the *securities on any conditions it decides.
• $\overline{2}$ We warrant the following to ASX.
• The issue of the *securities to be quoted complies with the law and is not for an illegal purpose.
• There is no reason why those *securities should not be granted *quotation.
• An offer of the "securities for sale within 12 months after their issue will not require disclosure under section $707(3)$ or section $1012C(6)$ of the Corporations Act.

Note: An entity may need to obtain appropriate warranties from subscribers for the securities in order to be able to give this warranty

• Section 724 or section 1016E of the Corporations Act does not apply to any applications received by us in relation to any "securities to be quoted and that no-one has any right to return any "securities to be quoted under sections 737, 738 or 1016F of the Corporations Act at the time that we request that the *securities be quoted.
• If we are a trust, we warrant that no person has the right to return the *securities to be quoted under section 1019B of the Corporations Act at the time that we request that the *securities be quoted.
• 3 We will indemnify ASX to the fullest extent permitted by law in respect of any claim, action or expense arising from or connected with any breach of the warranties in this agreement.
• $\overline{4}$ We give ASX the information and documents required by this form. If any information or document not available now, will give it to ASX before *quotation of the *securities begins. We acknowledge that $\angle$ ASX is relying on the information and documents. We warrant that they are (will be) true and complete.

Wacker

Sign here:

...................................... Company Secretary

---

Print name:

Richard Hacker

⁺ See chapter 19 for defined terms.