CHALICE MINING LIMITED — Interim / Quarterly Report 2006

Jan 30, 2007

Appendix 5B

$Rule 5.3$

Mining exploration entity quarterly report

Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98, 30/9/2001.

Name of entity

CHALICE GOLD MINES LIMITED

ABN

47 116 648 956

Ouarter ended ("current quarter")
31 DECEMBER 2006

Consolidated statement of cash flows

	Cash flows related to operating activities	Current quarter \$A	Year to date (6 months) \$A
1.1	Receipts from product sales and related debtors	28,850	73,850
1.2	Payments for (a) exploration and evaluation (b) development (c) production	(998, 366)	(2,178,936)
1.3	(d) administration Dividends received	(288, 858)	(537, 671)
1.4 1.5	Interest and other items of a similar nature received Interest and other costs of finance paid	100,285 (1, 341)	135,829 (1,750)
1.6 1.7	Income taxes paid Other
	Net Operating Cash Flows	(1,159,430)	(2,508,678)
1.8	Cash flows related to investing activities Payment for purchases of: (a)prospects (b)equity investments (c) other fixed assets	(29, 465)	(46,943)
1.9	Proceeds from sale of: (a)prospects (b) equity investments (c) other fixed assets
1.10	Loans to other entities
1.11	Loans repaid by other entities
1.12	Other (provide details if material)
	Net investing cash flows	(26, 465)	(46, 943)
1.13	Total operating and investing cash flows (carried forward)	(1.188.895)	(2.555.621)

$+$ See chapter 19 for defined terms.

	Cash flows related to financing activities
1.14	Proceeds from issues of shares, options, etc. (net)	w
1.15	Proceeds from sale of forfeited shares
1.16	Proceeds from borrowings
1.17	Repayment of borrowings	(1,559)	(5,276)
1.18	Dividends paid
1.19	Other		(20,000)
	Net financing cash flows	(1,559)	(25, 276)
	Net increase (decrease) in cash held	(1,190,454)	(2,580,897)
1.20 1.21	Cash at beginning of quarter/year to date Exchange rate adjustments to item 1.20	4,036,807	5,427,250
1.22	Cash at end of quarter	2,846,353	2,846,353

Payments to directors of the entity and associates of the directors Payments to related entities of the entity and associates of the related entities

		Current quarter SА
1.23	Aggregate amount of payments to the parties included in item 1.2	63,954
1.24	Aggregate amount of loans to the parties included in item 1.10

1.25 Explanation necessary for an understanding of the transactions

Amount payable to related parties in 1.23 include payment of salaries, fees and reimbursements of expenses to directors.

Non-cash financing and investing activities

$2.1$ Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows

$N/A$

$2.2$ Details of outlays made by other entities to establish or increase their share in projects in which the reporting entity has an interest

$N/A$

⁺ See chapter 19 for defined terms.

Financing facilities available

Add notes as necessary for an understanding of the position.

		Amount available \$Α	Amount used SА
3.1	Loan facilities	Nil	Nil
3.2	Credit standby arrangements	Nil	Nil

Estimated cash outflows for next quarter

	Total	160,000
4.2	Development	Nil
4.1	Exploration and evaluation	SΑ 160,000
	---- ------- ------- ---- ---- --- ----- ---

Reconciliation of cash

	Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows.	Current quarter SΑ	Previous quarter \$Α
5.1	Cash on hand and at bank	2,846,352	4.036,807
5.2	Deposits at call
5.3	Bank overdraft
5.4	Other (Bank Guarantee)
	Total: cash at end of quarter (item 1.22)	2,846,352	4,036,807

Changes in interests in mining tenements

6.1	Interests in mining tenements relinquished, reduced or lapsed	Fenement reference	Nature of interest note(2)	Interest at beginning of quarter	Interest at end of quarter
	Nil

⁺ See chapter 19 for defined terms.

6.2	Interests in mining tenements acquired or increased	Tenement reference	Nature of interest (note(2))	Interest at beginning of quarter	Interest at end of quarter
		E15/0945	Madoonia Downs - Application	$0\%$	$100\%$
		E15/0952	Cowan Hill - Application	$0\%$	$100\%$
		E15/0953	Cowan Hill - Application	$0\%$	$100\%$
		E15/0954	Cowan Hill - Application	$0\%$	$100\%$
		E15/0955	Cowan Hill - Application	$0\%$	100%
		E63/1071	Chalice - Application	0%	100%

(1) Issued and quoted securities at end of current quarter
Description includes rate of interest and any redemption or conversion rights together with prices and dates.

		Total number	Number quoted	price Issue per	Amount paid up per
				security (see note	security (see note 3)
				$3)$ (cents)	(cents)
$\overline{7.1}$	Preference	Nil	Nil	Nil	Nil
	+ securities
	(description)
7.2	Changes during	N/A	N/A	N/A	N/A
	quarter
	(a) Increases
	through issues
	(b) Decreases
	through returns
	of capital, buy-
	backs.
7.3	+Ordinary	72,800,000	72,800,000	N/A	N/A
	securities
7.4	Changes during
	quarter	Nil	Nil	N/A	N/A
	(a) Increases
	through issues	Nil	Nil	N/A	N/A
	(b) Decreases through returns
	of capital.
$\overline{7.5}$	+Convertible	Nil	Nil	N/A	N/A
	debt securities
	(description)
7.6	Changes during	Nil	Nil	N/A	$\mathbf{N}/\mathbf{A}$
	quarter
	(a) Increases
	through issues
	(b) Decreases
	through
	securities
	matured.
7.7	Options (description and			Exercise price	Expiry date
	conversion	5,825,000	Nil	\$0.25	21 March 2011
	factor)
7.8	Issued during	Nil	Nil	N/A	${\bf N/A}$
	quarter

⁺ See chapter 19 for defined terms.

7.9	Exercised during quarter	Nil	Nil	N/A	N/A
7.10	Expired during quarter			Exercise price	Expiry date
		250,000	Nil	\$0.25	21 March 2011
		500,000	Nil	\$0.25	1 May 2011
7.11	Debentures (totals only)	Nil	Nil
7.12	Unsecured notes (totals only)	Nil	Nil

⁺ See chapter 19 for defined terms.

Compliance statement

• $\mathbf{1}$ This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act or other standards acceptable to ASX (see note 4).
• $\overline{2}$ This statement does give a true and fair view of the matters disclosed.

Date: 31 January 2007 Executive Chairman

Sign here:

Print name: Andrew Bantock

$+$ See chapter 19 for defined terms.

Notes

• $\mathbf{1}$ The quarterly report provides a basis for informing the market how the entity's activities have been financed for the past quarter and the effect on its cash position. An entity wanting to disclose additional information is encouraged to do so, in a note or notes attached to this report.
• $\overline{2}$ The "Nature of interest" (items 6.1 and 6.2) includes options in respect of interests in mining tenements acquired, exercised or lapsed during the reporting period. If the entity is involved in a joint venture agreement and there are conditions precedent which will change its percentage interest in a mining tenement, it should disclose the change of percentage interest and conditions precedent in the list required for items 6.1 and 6.2.
• Issued and quoted securities The issue price and amount paid up is not 3 required in items 7.1 and 7.3 for fully paid securities.
• 4 The definitions in, and provisions of, AASB 1022: Accounting for Extractive Industries and AASB 1026: Statement of Cash Flows apply to this report.
• $\varsigma$ Accounting Standards ASX will accept, for example, the use of International Accounting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with.

$=$ $=$ $=$ $=$ $=$ $=$

⁺ See chapter 19 for defined terms.