CHALICE MINING LIMITED — Interim / Quarterly Report 2008

Jul 30, 2008

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Quarterly Report for the period ended 30 June 2008

Chalice Gold Mines Limited (Chalice Gold Mines or the Company) reports on activity for the quarter ended 30 June 2008:

Gnaweeda Gold Project

• Teck Cominco (Teck) has previously advised that it intends to continue exploration at the Gnaweeda Gold Project under the second stage earn-in provisions of its joint venture agreement. Teck Cominco has the right to earn a further 19% interest in the project, to an overall 70% interest, by increasing its total project spend to $1.5 million. Teck advises that it has spent approximately $1.0M to 30 June 2008, and has recently funded the exercise of an option to acquire tenements within the Gnaweeda Project area, from a third party, for $100,000.

• Teck has advised that it will undertake further RC and diamond drilling at the Turnberry and St Anne’s Prospects commencing in the next quarter to:

  • test the extent of known mineralisation following high-grade results achieved in the previous RC drilling program; and

  • provide important structural information about the system to aid understanding of controls on mineralisation for future targeting of thicker high-grade zones.

• The proposed program will include:

  • 5 holes comprising RC pre-collars with diamond tails at Turnberry, for an estimated total of 1500 metres; and

  • 1 diamond tail on a pre-existing RC hole (GNRC010) at St Anne’s to properly test the target zone (below 150 metres).

Yandeearra Gold Project

• De Grey Mining Limited (De Grey) is spending up to $1.67 million over 3 years to earn 80% of rights to all minerals other than iron ore and uranium, over a number of tenements in the east of Chalice Gold Mines’ Yandeearra Gold Project.

• De Grey has reported that new gold and base metal targets were generated during the quarter at Yandeearra from geological reconnaissance programs. Follow-up reconnaissance is now underway, aimed at defining targets for drilling late this year.

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Quarterly Report – 30 June 2008

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Figure1: Location of gold and base metal soil anomalies, extent of soil survey and De Grey rock sampling results in the Yandeearra Joint Venture. Note the area within the ‘Friendly Creek Option Boundary’ is not part of the Yandeearra Joint Venture and Chalice Gold Mines has no interest in these tenements.

Soil Sampling Survey

An initial multi-element soil sampling program was completed at Yandeearra during the quarter.

Table 1: Gold and base metals targets defined by soil geochemistry, Yandeearra Project, June 2008

Anomaly	Anomalous**Metal **	Highest Value	BackgroundValue	Comments
PilbaraWell	Gold	200ppb gold	40ppb gold	Gold anomalism on outcropping leachedsaprolitecoincidentwithbasemetalanomalism
				Previously reported rock sampling returned
WesternPride	Gold	269ppb gold	40ppb gold	upto108g/tgold.Additionalquartz-sulphide vein located this quarter – new rock
				sampleresultof 11.6g/tgold.
				Anomaly covers an 800m x 200m area at
Hardey	Gold	859ppb gold	40ppb gold	>100ppbgold.43newrocksamples
				returned upto 0.41g/tgold.
				Single line gold anomaly of 3 samples
Central	Gold	416ppb gold	40ppb gold	>120ppb gold. Rock samples of pyritic veinquartzinultramaficcollected,results
				awaited.
		180ppm Pb,	25ppm Pb,	Multi-element anomalism on 3 consecutive
Pilbara	Lead, zinc,	206ppm Zn,	90ppm Zn,	400m spaced sample traverses. Siliceous
Well	copper, silver	253ppm Cu,	90ppm Cu,	gossan returned 1.48g/t silver and 26g/t
		0.5g/t Ag	0.1g/t Ag	silver.
LeadAnomaly1*	Lead, silver,antimony,barium &mercury	375ppm Pb,37ppm Sb,1,260ppm Ba	25ppm Pb,2ppm Sb,300ppm Ba	‘VMS’ geochemical signature in an area offelsic volcanics and ultramafic rocks.
LeadAnomaly 2	Lead, zinc,copper	595ppm Pb,368ppm Zn,124ppmCu	25ppm Pb,90ppm Zn,90ppmCu	Sample of pyritic felsic volcanic returned835ppmleadand794ppmzinc.Soilanomalismopenalong striketo east.

• Reported previously by De Grey

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Quarterly Report – 30 June 2008

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In-fill soil sampling is now in progress to better define the extent of these soil anomalies.

Follow-up field inspection of these anomalies is also underway with some rock chip sample results received (Table 2). Drilling programs will be designed to test high priority targets once all results have been received.

Table 2: Reconnaissance Rock Sampling Results – Yandeearra Gold Project >1.00g/t gold or 1% copper

Project	SampleID	East	North	Goldg/t	Copper%	Silverg/t	Prospect
Yandeearra	550301	624,528	7,648,575	11.6	0.04	3	Pride NNE Extended
	550094	637,604	7,657,544	1.24	0	0	Arizona
	550406	636,891	7,656,453	1.21	0	0
	550359	635,612	7,653,662	4.20	0.01	1	John Bull South
**Note:**Samples are surface in situ rocks. Coordinates are MGA zone 50. Analyses are by Ultra Trace Laboratories Perthusing an Aqua Regia digest and Inductively Coupled Plasma (ICP) Mass or Optical Emission Spectrometry finish.

Stream Sediment Sampling

A substantial stream sediment sampling program has commenced over a 13km strike length of complex folded and faulted Cleaverville Chert in the north east of the Yandeearra Project area. This area has not previously been systematically explored and is regarded by De Grey as prospective for hydrothermal gold mineralisation.

During the quarter, 117 samples were collected over a 5km x 3km area with all assays awaited. The program is continuing and will be completed in the next quarter.

Corporate

As at 30 June 2008 the Company had $10 million of cash at bank following the exercise of 2 million options held in Avoca Resources Limited, with subsequent on-market disposal of the shares received.

The information in this report that relates to Exploration Results is based on information compiled by Mr Roger Thompson, a full-time employee of Chalice Gold Mines Limited, who is a Member of the Australian Institute of Geoscientists. Mr Thompson has sufficient experience in the field of activity being reported to qualify as a Competent Person as defined in the 2004 edition of the Australasian Code for Reporting of Exploration Results, Minerals Resources and Ore Reserves, and consents to the release of information in the form and context in which it appears here.

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Andrew Bantock Executive Chairman

31 July 2008

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