CHALICE MINING LIMITED — Capital/Financing Update 2009

Jan 7, 2009

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TRANSACTION SETTLEMENTS

Chalice Gold Mines Limited (Chalice) advises that it has received $250,000 from Atlas Iron Limited (Atlas Iron) and 2 million De Grey Mining Limited (De Grey) shares and options following initial completion under certain option and joint venture agreements.

Chalice now has cash at bank of approximately $9.6M. A further $0.8M of Avoca Resources Limited shares is due to be received in February 2009 upon completion of tranche 2 of the sale of the Company’s Chalice and Higginsville Gold Project to Avoca.

Option Agreement with Atlas Iron Limited

Pursuant to an option agreement under which Atlas Iron can acquire the iron ore rights at Chalice’s Yandeerra Project, Chalice has received an initial payment of $250,000 following completion of a formal agreement between the parties.

Atlas Iron must then make a further payment of $1,000,000 in cash or Atlas Iron shares (valued at a 5 day VWAP) should it exercise its option to purchase the iron ore rights. The option expires no later than 12 months after the date of the formal agreement.

Joint Venture Agreement with De Grey Mining Limited

Under a joint venture agreement to explore for gold and base metals at the Yandeearra Project with De Grey, Chalice has received an initial payment comprising the issue of 2 million shares and 2 million unlisted, 3 year, 20 cent options, following the execution of the formal joint venture agreement between the two parties.

Under the joint venture, De Grey must spend $1,670,000 over 5 years to earn an interest of 80%.

Tim Goyder Executive Chairman

8 January 2008

Chalice Gold Mines Limited Level 2/1292 Hay Street, West Perth, WA 6005 GPO Box 2890, Perth, WA 6001

T: +618 9322 3960

F: +618 9322 5800

W: www.chalicegold.com

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