CHALICE MINING LIMITED — Interim / Quarterly Report 2008

Jan 21, 2008

Appendix 5B Mining exploration entity quarterly report

Rule 5.3

Appendix 5B

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

==> picture [451 x 477] intentionally omitted <==

----- Start of picture text -----

CHALICE GOLD MINES LIMITED
ABN Quarter ended (“current quarter”)
47 116 648 956 31 DECEMBER 2007
Consolidated statement of cash flows
Current quarter Year to date
Cash flows related to operating activities $A (6 months)
$A
1.1 Receipts from product sales and related debtors 64,500 146,180
1.2 Payments for (a) exploration and evaluation (47,278) (187,826)
(b) development - -
(c) production - -
(d) administration (265,423) (556,148)
1.3 Dividends received - -
1.4 Interest and other items of a similar nature received 115,890 151,106
1.5 Interest and other costs of finance paid (64) (64)
1.6 Income taxes paid - -
1.7 Other - -
Net Operating Cash Flows (132,375) (446,752)
Cash flows related to investing activities
1.8 Payment for purchases of: (a)prospects - -
(b)equity investments - -
(c)other fixed assets (10,122) (51,409)
1.9 Proceeds from sale of: (a)prospects - -
(b)equity investments - 6,894,518
(c)other fixed assets 2,600 2,600
1.10 Loans to other entities -
-
1.11 Loans repaid by other entities -
-
1.12 Other (provide details if material) -
-
Net investing cash flows (7,522) 6,845,709
1.13 Total operating and investing cash flows (carried
forward) (139,897) 6,398,957
----- End of picture text -----

• See chapter 19 for defined terms.

Appendix 5B Page 1

31/12/2007

Appendix 5B Mining exploration entity quarterly report

Cash flows related to financing activities 1.14 Proceeds from issues of shares, options, etc. (net) 1.15 Proceeds from sale of forfeited shares 1.16 Proceeds from borrowings 1.17 Repayment of borrowings 1.18 Dividends paid 1.19 Other Net financing cash flows	- - - - - -	- - - - - -
	-	-
Net increase (decrease) in cash held 1.20 Cash at beginning of quarter/year to date 1.21 Exchange rate adjustments to item 1.20 1.22 Cash at end of quarter	(139,897) 8,862,803 -	6,398,957 2,323,949 -
	8,722,906	8,722,906

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

1.23 Aggregate amount of payments to the parties included in item 1.2 1.24 Aggregate amount of loans to the parties included in item 1.10	Current quarter $A
	57,347
	-

• 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.

Amounts received in 1.9 (b) are a result of the Company selling 3.5 million Avoca Resources Ltd shares.

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.

Financing facilities available

Add notes as necessary for an understanding of the position.

3.1 Loan facilities 3.2 Credit standby arrangements	Amount available $A	Amount used $A
	Nil	Nil
	Nil	Nil

• See chapter 19 for defined terms.

Appendix 5B Page 2

31/12/2007

Appendix 5B Mining exploration entity quarterly report

Estimated cash outflows for next quarter

4.1 4.2	Exploration and evaluation Development	$A
		175,000
		Nil
	Total	175,000

• 4.1 Exploration and evaluation

4.2 Development Total

Reconciliation of cash

Total Reconciliation of cash		175,000
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 $A	Previous quarter $A
5.1 Cash on hand and at bank 5.2 Deposits at call 5.3 Bank overdraft 5.4 Other (Bank Guarantee)	1,536,516	7,681,155
	7,186,390	1,181,648
	-	-
	-	-
Total: cash at end of quarter(item 1.22)	8,722,906	8,862,803

Changes in interests in mining tenements

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

Note: During the quarter the Company entered into a joint venture agreement with De Grey Mining Limited and an option agreement with Atlas Iron Limited at the Yandeerarra Gold Project in the West Pilbara. For further details refer to the Company’s 31 December 2007 Quarterly Report.

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
	P47/1223	Yandeearra-granted	0%	100%
	P47/1224	Yandeearra-granted	0%	100%
	P47/1225	Yandeearra-granted	0%	100%
	P47/1226	Yandeearra-granted	0%	100%
	P47/1227	Yandeearra-granted	0%	100%
	P39/4890	Wilga - application	0%	0%

• See chapter 19 for defined terms.

Appendix 5B Page 3

31/12/2007

Appendix 5B Mining exploration entity quarterly report

(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	Issue price per security (see note3) (cents)	Amount paid up per security (see note3) (cents)
7.1 Preference+securities (description) 7.2 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy- backs.	Nil	Nil	Nil	Nil
	N/A	N/A	N/A	N/A
7.3 +Ordinary securities 7.4 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital.	72,800,000	64,252,737	N/A	N/A
	Nil Nil	Nil Nil	N/A N/A	N/A N/A
7.5 +Convertible debt securities(description) 7.6 Changes during quarter (a) Increases through issues (b) Decreases through securities matured.	Nil	Nil	N/A	N/A
	Nil	Nil	N/A	N/A
7.7 Options (description and conversion factor) 7.8 Issued during quarter 7.9 Exercised during quarter 7.10 Expired during quarter	5,825,000 250,000	Nil Nil	Exercise price $0.25 $0.20	Expiry date 21 March 2011 11 December 2012
	250,000	Nil	$0.20	11 December 2012
	Nil	Nil	N/A	N/A
	Nil	Nil	Exercise price N/A	Expiry date N/A
7.11 Debentures (totals only)	Nil	Nil
7.12 Unsecured notes (totals only)	Nil	Nil

• See chapter 19 for defined terms.

Appendix 5B Page 4

31/12/2007

Appendix 5B Mining exploration entity quarterly report

Compliance statement

• 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).

• 2 This statement does give a true and fair view of the matters disclosed.

==> picture [71 x 9] intentionally omitted <==

==> picture [71 x 9] intentionally omitted <==

==> picture [71 x 9] intentionally omitted <==

==> picture [71 x 9] intentionally omitted <==

Sign here: Executive Chairman

Date: 22 January 2008

Print name: Andrew Bantock

• See chapter 19 for defined terms.

Appendix 5B Page 5

31/12/2007

Appendix 5B Mining exploration entity quarterly report

Notes

• 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.

• 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.

• 3 Issued and quoted securities The issue price and amount paid up is not 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.

• 5 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.

Appendix 5B Page 6

31/12/2007