CHALICE MINING LIMITED — Interim / Quarterly Report 2019

Oct 22, 2019

23 October 2019

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September 2019 Quarterly Activities Report
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Exciting new phase of drilling underway across large-scale gold targets in Victoria and nickel exploration advances in the Kimberley

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Highlights

Pyramid Hill Gold Project – Victoria (100%-owned)

• ~24,500m Phase 2 air-core (AC) drill program in progress, with 54 holes for 5,274m completed at the Ironbark Target to date.

• Drilling follows the successful Phase 1 program, which defined three large-scale areas of gold and pathfinder anomalism (Ironbark, Karri and Beech) in basement under shallow Murray Basin cover.

• 7,500m of drilling planned at the Ironbark Target , where up to 1.1g/t Au in quartz veining was intersected within a mineralised diorite intrusion in Phase 1.

• Step-out drilling on the intrusion and several other nearby magnetic features aims to refine targets for deeper RC/diamond drilling.

• 10,500m of drilling planned at the Karri Target , where multiple anomalous gold zones were intersected over ~15km of strike.

• 4,000m of drilling planned at the Beech Target , where highly anomalous pathfinder elements were intersected ~25km north-west of Bendigo (~22Moz @ ~15g/t Au) along the Sebastian Fault.

• Chalice now holds a commanding ~5,190km[2] land position in the exciting, under-explored covered areas of the northern Bendigo Zone.

King Leopold Nickel Project – Western Australia (85-100% owned)

• Ground-based and airborne EM surveys identify multiple strong, discrete, late-time EM conductors, including two shallow ~5,000 Siemens conductors at the Ephesus Target.

• Field reconnaissance and geochemical sampling partially completed.

• Further ground-based EM and drilling activities have been deferred until the 2020 field season due to access constraints.

O3 Mining Transaction – Quebec, Canada

• East Cadillac and Kinebik Gold Projects in Quebec sold to O3 Mining Inc. (TSX-V: OIII) for 3.1M shares (~7% interest), a partial 1.0% NSR royalty and ~C$1.3M in deferred cash consideration.

Corporate

• Strong working capital and investments balance of ~$30.4M (or ~$0.11 per share ), including $14.6M in cash at Quarter-end.

• 97.1M shares (~7% interest) acquired in Spectrum Metals Limited (ASX: SPX).

• Chalice commenced trading on the OTCQB Venture Market in the United States.

• Mr Bruce Kendall appointed General Manager – Corporate Development.

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1. OVERVIEW

Commenting on the September Quarter activities, Chalice’s Managing Director, Alex Dorsch, said: “This was another busy and successful period for Chalice, with the Company continuing to refine and strengthen its portfolio with the successful divestment of our Canadian gold projects and the acquisition of a highpotential nickel sulphide project in the Kimberley region of WA.”

“Exploration activities also ramped up significantly during the quarter, with our maiden nickel sulphide exploration program underway in the Kimberley and the resumption of drilling in Victoria at our exciting Pyramid Hill Project.”

“Our dual gold-nickel focus has proven to be well-timed, with both commodities seeing significant price appreciation and substantial growth in exploration expenditure over the last quarter. Our exploration activities currently underway are attracting significant market attention and our strong balance sheet means we can progress exploration at pace and quickly scale-up drilling activities in the event of a discovery.”

“The targets we are currently drilling at Pyramid Hill have the potential to deliver a significant new gold discovery under shallow cover. Considering the favourable jurisdiction and proximity to infrastructure and operating mines in central Victoria, we believe the opportunity is quite unique. Drilling is continuing and we eagerly await the first round of assays due in mid-November.”

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Figure 1. Drilling at the Ironbark Target on the Pyramid Hill Gold Project, Oct-19

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Chalice Gold Mines Limited ABN 47 116 648 956 ASX : CHN | TSX : CXN | OTCQB: CGMLF

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2. EXPLORATION ACTIVITIES

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Figure 2. Chalice’s project locations in Australia.

2.1 Pyramid Hill Gold Project, Victoria

The 100%-owned Pyramid Hill Gold Project was staked in 2017 and now covers an area of ~5,190km[2] in the Bendigo region of Victoria. The Project encompasses three key districts within the Murray Basin covered North Bendigo and North Stawell Zones: Muckleford, Mt William and Percydale (Figure 3).

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Chalice Gold Mines Limited ABN 47 116 648 956 ASX : CHN | TSX : CXN | OTCQB: CGMLF

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Figure 3. Pyramid Hill Gold Project tenure, regional land-holders, gold deposits and occurrences.

The central Muckleford Area extends to the north-west of the high-grade historic >22Moz Bendigo Goldfield. The Mt William Area extends to the north-east of one of the world’s highest-grade and lowestcost producing gold mines, the >8Moz Fosterville Gold Mine owned by Kirkland Lake Gold (NYSE / TSX: KL | ASX: KLA). The Percydale Area is located north-west of the historical St Arnaud Goldfield within the Stawell Zone.

The ‘Gold Undercover[i] ’ initiative by the Victorian Government estimated a potential ~32Moz (P50 mid case) of undiscovered gold beneath Murray Basin cover in the Bendigo Zone, where Chalice holds ~60% of the total ~7,000km[2] prospective area.

Chalice is targeting large-scale, high-grade gold discoveries under shallow cover, and is currently conducting regional scale greenfield exploration. Approximately 39km of reconnaissance air-core (AC) drilling has been completed to date, outlining three high priority target areas for testing in the current Phase 2 AC program.

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Chalice Gold Mines Limited ABN 47 116 648 956 ASX : CHN | TSX : CXN | OTCQB: CGMLF

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Overview

Chalice commenced the second phase of reconnaissance air-core (AC) drilling in late September 2019, after securing all land access and permitting approvals.

The Phase 2, ~24,500m program is designed to refine the Ironbark, Karri and Beech Targets defined in Phase 1, in order to maximise the effectiveness of future deeper RC or diamond drilling. The same high-capacity, multi-purpose AC/RC drilling rig used in Phase 1 is currently on site, providing a high degree of operational flexibility. Several additional regional geochemical and geophysical target areas of interest will also be drilled (Figure 4).

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Figure 4 . Muckleford Area AC drilling and regional gold occurrences over 1VD gravity geophysics.

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Chalice Gold Mines Limited ABN 47 116 648 956 ASX : CHN | TSX : CXN | OTCQB: CGMLF

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Ironbark Target

A total of ~70 AC drill holes (~7,500m) are planned at the Ironbark Target, which is centred around a large 10km by up to 7km >5ppb gold-in-soil anomaly. The soil anomaly has a peak of 276ppb Au and, importantly, also has associated pathfinder metals. The target is situated between the regional-scale Muckleford Fault and the Wedderburn Granodiorite. 54 holes for 5,274m have been completed at the target to date, with first assays expected in mid-November.

Broad gold anomalism above 25ppb Au and up to 1.1g/t Au was intersected in the Phase 1 drill program along a 650m section of the central drill line. Three consecutive holes ~100m apart intersected a mafic intrusive, with a best result of 5m @ 0.45g/t Au including 1m @ 1.1g/t Au associated with quartz veining (Figure 5).

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Figure 5. Ironbark Target cross-section C-D and drill cuttings from drill-hole PA245.

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Chalice Gold Mines Limited ABN 47 116 648 956 ASX : CHN | TSX : CXN | OTCQB: CGMLF

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Petrological examination of these drill cuttings has confirmed the presence of a hornblende-biotite-quartz diorite, similar to the Walhalla-Woods Point Goldfield dyke swarm. This historical goldfield in Eastern Victoria hosted several significant gold deposits including Cohen’s Reef (~1.5Moz @ ~32g/t Au), Morning Star (~800koz @ 26g/t Au) and A1 (~620koz @ 32g/t Au), all related to small diorite dyke intrusions.

Regional aeromagnetics suggest that the diorite intrusive intersected in the Phase 1 AC drilling at Ironbark is a circular magnetic body ~380m in diameter, making it much larger and potentially more favourable geometry to the dykes at Walhalla-Woods Point.

The aeromagnetics also indicate a potential second untested discrete bulls-eye magnetic anomaly and several potentially prospective diorite dykes in the area. The bulls-eye anomaly located ~2km to the northwest of Ironbark represents a prospective additional target for Phase 2 drilling (Figure 6).

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A high definition 25m-line spaced ground magnetic survey was completed over both magnetic anomalies to refine targeting for the next phase of deeper drilling. The planned Phase 2 holes will systematically test the weathered top of the intrusive targets, at a nominal 100250m hole spacing, while also providing a first-pass test of several other nearby structural targets.

Figure 6. Ironbark Target AC drilling over 1VD RTP aeromagnetics

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Chalice Gold Mines Limited ABN 47 116 648 956 ASX : CHN | TSX : CXN | OTCQB: CGMLF

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Karri Target

A total of ~90 AC drill holes (~10,500m) are planned at the Karri Target, which includes an ~350m wide, north-south striking zone of elevated gold and pathfinder elements (including Sb, Hg, Te, Bi, Zn, Cu and As) on Phase 1 AC lines ~7km apart. This 7km of strike between lines remains entirely untested by drilling.

Better results from Phase 1 include 16m @ 0.15g/t Au from 62m within a 350m wide zone of anomalous gold (>25ppb Au), interpreted to be a secondary supergene dispersion zone near the weathered top of the Castlemaine Group sediments. Based on limited drilling thus far, Karri is interpreted to be a classic Bendigo Zone-style target (shallow plunging anticlinal stacked lode system, in the hanging wall of a regional scale, steep westerly

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dipping fault). Given the strike extent of the gold anomalism identified to date at the top of weathered basement, it is considered to have significant scale potential.

The planned Phase 2 holes will systematically test the Karri Target at a nominal 1km drill line spacing and 100-200m drill hole spacing (Figure 7). The drilling is designed to further refine the footprint of gold anomalism, in order to vector towards the bedrock source with future in-fill and deeper drilling.

Figure 7. Karri Target AC drilling over 1VD gravity geophysics.

Beech Target

A total of ~35 AC holes for ~4,000m are proposed at the Beech Target, where Phase 1 AC results included arsenic (As) anomalism up to 8,500ppm and associated antimony (Sb) up to 40ppm in hole PA136, which is the strongest arsenic intercept to date on the project. Arsenic and antimony are considered to be the strongest pathfinder metals for gold in the Bendigo Zone.

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Chalice Gold Mines Limited ABN 47 116 648 956 ASX : CHN | TSX : CXN | OTCQB: CGMLF

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The Beech Target is located ~25km along strike from Bendigo (22Moz @ ~15g/t Au) on the Sebastian Fault, and is broadly associated with carbonate alteration and low-level gold anomalism.

The planned Phase 2 holes will systematically test the Beech Target on a nominal 1-2km drill line spacing and 100-200m drill hole spacing. The drilling is designed to define the footprint of gold anomalism for future in-fill drilling.

Additional Reconnaissance Drilling

Approximately 28 holes for ~2,500m are also planned as a first-pass shallow test of other regional targets in the Muckleford Area (in a similar manner to the Phase 1 program). Several isolated holes in the central part of the Muckleford Area are planned on gravity highs (interpreted basement highs) below Murray Basin and Permian tillite cover, where limited historical drilling has been unable to successfully establish depth to the target Castlemaine Group basement.

2.2 King Leopold Nickel Project, Western Australia

The King Leopold Nickel Project covers an area of ~1,800km[2] in the West Kimberley region of WA. The Project covers several known areas of Ruins and Hart Dolerite (Figure 8), which are both considered highly prospective for magmatic nickel sulphides as well as other related metals (Cu, Co and PGEs).

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Figure 8. Chalice’s King Leopold Project tenure and Buxton-IGO tenure over geological domains.

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Chalice Gold Mines Limited ABN 47 116 648 956 ASX : CHN | TSX : CXN | OTCQB: CGMLF

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The Ruins Dolerite has been demonstrated to host high-grade nickel sulphides (drill intercept grades up to 8% Ni) following the Merlin discovery in 2015 of Buxton Resources (ASX: BUX). Buxton has since executed two joint venture agreements with Independence Group (ASX: IGO) and exploration activities have ramped up significantly. The JV has also substantially increased its licence holding in the frontier province.

The Project is a combination of several 100%-owned exploration licences, 100%-owned hard rock rights, as well as an earn-in agreement (earning up to 85%).

Overview

Field-based exploration commenced in July 2019, following the acquisition of private explorer North West Nickel Pty Ltd. Activities during the quarter focused on areas immediately south-east of the Merlin Prospect within an area of extensive outcropping Ruins Dolerite.

A maiden ground-based EM survey (MLEM) was completed in July 2019 over the Waterford Area (E04/1169) to follow-up on conductors identified from a 2018 airborne “Xcite” EM survey. In addition, a maiden airborne EM survey (SkyTEM) was completed in early August 2019 over the King Sound Area (E04/2299 & 2325).

The two surveys have resulted in the delineation of several highly prospective EM conductors as shown in Figure 9.

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Figure 9. King Leopold Nickel Project tenure, nickel occurrences, targets and regional geology

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Chalice Gold Mines Limited ABN 47 116 648 956 ASX : CHN | TSX : CXN | OTCQB: CGMLF

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Ground-based EM Results

An MLEM survey was completed over the Waterford Area, where Chalice owns 100% of the hard-rock mineral rights. The program followed up on four priority targets identified from the previous “Xcite” Airborne EM survey in 2018, with the objective of defining drill-ready, discrete, late-time EM conductors.

The MLEM survey included 125 stations over 12 lines and successfully generated nine conductive plates. Two high priority, strong, discrete and shallow EM conductors were identified and modelled at the Ephesus Target (Figure 10).

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Figure 10. Ephesus Target MLEM conductors over mapped geology and satellite imagery

Conductors A and B have a strong conductance of ~4,800 and ~5,000 Siemens respectively, and are modelled at a shallow depth within an extensive suite of Ruins Dolerite. The interpreted source of the conductors is massive sulphides.

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Chalice Gold Mines Limited

ABN 47 116 648 956 ASX : CHN | TSX : CXN | OTCQB: CGMLF

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Conductors C to F are modelled with low to moderate conductance (<3,000 Siemens) and based on field reconnaissance are likely sourced from pyritic and/or graphitic units. They are therefore considered to be lower priority for follow-up drill testing.

Two additional airborne EM targets, Ephesus South and Palmyra South, are planned for follow-up MLEM in the 2020 field season.

Airborne EM Results

A SkyTEM airborne EM survey was completed during the quarter over the King Sound Area (EL04/2299, EL04/2325) where Chalice is earning an 85% JV interest. This survey is the first geophysical program to be completed over this area, which includes an ~8km outcropping strike length of prospective Ruins Dolerite.

A total of 1,394 line kilometres were flown at 150m line spacing, which generated clear and high-quality EM anomalies in a highly resistive environment. Several discrete and strong mid-to-late time EM anomalies were identified, broadly coincident with an 8km long trend of outcropping Ruins Dolerite (Figure 11).

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Figure 3. King Sound AEM survey late-time gridded image (channel 25, Z component).

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Chalice Gold Mines Limited ABN 47 116 648 956 ASX : CHN | TSX : CXN | OTCQB: CGMLF

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Heritage Survey

The Company completed a heritage clearance survey with the Dambimangari Aboriginal Corporation over the King Sound Area and a small portion of the Waterford Area not previously cleared.

Chalice has subsequently received approval to carry out exploration activities including but not limited to prospecting, sampling, ground geophysics and drilling.

Forward Plan

The Company conducted rock-chip and soil sampling over Ruins Dolerite outcrop and associated EM conductors in the King Sound Area in September. Approximately a third of the soil sampling program has been completed to date, with all assays pending.

A second phase of MLEM is planned, however further field activities including drilling have been deferred until the 2020 field season due to access constraints, bush fires in the region and equipment availability.

2.3 Generative Projects

No exploration activity was undertaken on other projects during the Quarter, however several phases of field activity are planned in Q4 2019 on Chalice’s generative portfolio.

The Company is seeking access agreements with landowners for a maiden RC drilling program at the Julimar Nickel Project, WA. The Project hosts a large 26 x 7km interpreted mafic-ultramafic layered complex, prospective for nickel, copper and PGEs. Subject to land access agreements and government approvals, the program is expected to be completed in Q4 2019.

The Company is currently finalising land access for the upcoming maiden reconnaissance AC drilling program at the Flinders River Vanadium Project. Drilling is targeting areas of potentially shallow, vanadiumbearing mineralisation within oxidised Toolebuc Shale. The program is expected to be completed in Q4 2019.

An initial program of SQUID EM (a deep electromagnetic sensing technique) is planned in Q4 2019 at the Auralia Nickel Project in WA. The program is designed to test the effectiveness of this deep sensing technique over the buried Loonganna mafic-ultramafic complex in the Madura Province, WA.

Reconnaissance and soil geochemistry programs are planned at the Mt Jackson Gold Project, at the northern end of the Southern Cross greenstone belt of WA, and the Barrabarra Nickel Project in the Midwest region of WA during Q4 2019.

2.4 Non-Operated Joint Ventures

Nulla South and Gibb Rock Gold Projects, Western Australia (Ramelius earning 75%)

Operator Ramelius Resources (ASX: RMS) reported that no exploration drilling was undertaken during the Quarter due to access constraints. Ramelius continues to advance land access discussions and is designing work programs over selected target areas.

3. CORPORATE

As at 30 September 2019, Chalice had a combined working capital and investments balance of ~$30.4 million. This comprised ~$14.6 million in cash, $9.3 million in O3 Mining Inc. (TSX-V: OIII) shares, $5.3 million in Spectrum Metals (ASX: SPX) shares and $0.8 million in net receivables.

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Chalice Gold Mines Limited ABN 47 116 648 956 ASX : CHN | TSX : CXN | OTCQB: CGMLF

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The Company notes an announcement by Spectrum Metals on 10 October 2019 in relation to a writ of summons issued on Spectrum Metals by Venus Metals Limited (ASX: VMC). Chalice currently has an ownership interest of approximately 7% in Spectrum Metals.

The Company also has a contingent $5 million payment receivable upon commercial production at the Nyanzaga Gold Project in Tanzania (OreCorp Limited ASX: ORR). OreCorp recently completed the acquisition of 100% of the Project, and is currently awaiting grant of a Special Mining Licence.

Mr Jamie Armes was appointed Company Secretary on 19 August and Mr Bruce Kendall was appointed General Manager – Corporate Development on 1 October.

On 19 August, Chalice commenced trading on the OTCQB Venture Market (OTCQB) in the United States, with the trading symbol CGMLF.

During the Quarter, the Company spent ~$1.2 million on exploration activities, ~$2.1 million on investing activities and ~$0.9 million on administration, business development, transaction and corporate costs (net of interest, receipts and GST refunds).

Estimated outflows for the next quarter include ~$1.8 million on exploration activities and ~$0.9 million on administration, business development, transaction and corporate costs. Further details are available in the attached Appendix 5B.

4. TENEMENT SCHEDULES

In accordance with ASX Listing Rule 5.3, please refer to Appendix 1 for a listing of all tenement holdings.

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Alex Dorsch Managing Director

For further information, please visit chalicegold.com or contact:

Nicholas Read Alex Dorsch Principal and Managing Director Managing Director Read Corporate Investor Relations Chalice Gold Mines Limited +61 8 9388 1474 +61 8 9322 3960 info@readcorporate.com.au info@chalicegold.com

Follow our communications: LinkedIn: https://au.linkedin.com/company/chalice-gold-mines Twitter: https://twitter.com/chalicegold Facebook: https://www.facebook.com/Chalice-Gold-Mines-323740744933099/

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Chalice Gold Mines Limited ABN 47 116 648 956 ASX : CHN | TSX : CXN | OTCQB: CGMLF

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Competent Persons and Qualifying Persons Statement

The Information in this announcement that relates to the exploration results for the Pyramid Hill Project is extracted from the ASX announcement entitled “Chalice identifies two 12km+ gold-in-soil anomalies at Pyramid Hill Project, Bendigo”, “Reconnaissance Drilling at Pyramid Hill Gold Project Continues to Outline High-Priority Target Areas” and “Shallow drilling hits gold in basement and outlines three high priority targets for follow-up at the Pyramid Hill Gold Project, Victoria” dated 12 July 2018, 19 March 2019 and 8 July 2019.

The information in this announcement that relates to exploration information for the King Leopold Nickel Project is extracted from the ASX announcement entitled “Strong, shallow EM conductors identified ahead of maiden drill program at King Leopold Nickel Sulphide Project, WA” dated 20 August 2019.

The above announcements are available to view on the Company’s website at www.chalicegold.com. The Company confirms that it is not aware of any new information or data that materially affects the information included in the relevant original market announcements. The Company confirms that the form and context in which the Competent Person and Qualified Person’s findings are presented have not been materially modified from the relevant original market announcements.

Forward Looking Statements

This report may contain forward-looking information within the meaning of Canadian securities legislation and forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995 (collectively, forward-looking statements). These forward-looking statements are made as of the date of this report and Chalice Gold Mines Limited (the Company) does not intend, and does not assume any obligation, to update these forward-looking statements.

Forward-looking statements relate to future events or future performance and reflect Company management’s expectations or beliefs regarding future events and include, but are not limited to, the Company’s strategy, the price of O3 Mining securities and Spectrum Metals Limited securities, receipt of tax credits and the value of future tax credits, the estimation of mineral reserve and mineral resources, the realisation of mineral resource estimates, the likelihood of exploration success at the Company’s projects, the prospectivity of the Company’s exploration projects, the timing of future exploration activities on the Company’s exploration projects, planned expenditures and budgets and the execution thereof, the timing and availability of drill results, potential sites for additional drilling, the timing and amount of estimated future production, costs of production, capital expenditures, success of mining operations, environmental risks, unanticipated reclamation expenses, title disputes or claims and limitations on insurance coverage.

In certain cases, forward-looking statements can be identified by the use of words such as “plans”, “planning” “expects” or “does not expect”, “is expected”, “will”, “may”, “would”, “potential”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, “believes”, “occur” or “be achieved” or variations of such words and phrases or statements that certain actions, events or results may, could, would, might or will be taken, occur or be achieved or the negative of these terms or comparable terminology. By their very nature forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.

Such factors may include, among others, risks related to actual results of current or planned exploration activities; changes in project parameters as plans continue to be refined; changes in exploration programs based upon the results of exploration; future prices of mineral resources; possible variations in mineral resources or ore reserves, grade or recovery rates; accidents, labour disputes and other risks of the mining industry; delays in obtaining governmental approvals or financing or in the completion of development or construction activities; movements in the share price of O3 Mining and Spectrum Metals securities and future proceeds and timing of potential sale of O3 Mining and Spectrum Metals securities, as well as those factors detailed from time to time in the Company’s interim and annual financial statements, all of which are filed and available for review on SEDAR at sedar.com, ASX at asx.com.au and OTC Markets at otcmarkets.com.

Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.

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Chalice Gold Mines Limited ABN 47 116 648 956 ASX : CHN | TSX : CXN | OTCQB: CGMLF

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Appendix 1. Tenement Schedule

The following information is provided in accordance with ASX Listing Rule 5.3 for the Quarter ended 30 September 2019.

1. Listing of tenements held

Australia

Location	Project	Tenement No.	Registered Holder	Nature of interest
Western Australia	King Leopold	E04/1169	Waterford BayPtyLtd	100% of the hard-rock mineral rights
		E04/2405	Waterford BayPtyLtd	100% of the hard-rock mineral rights
		E04/2299	Strategic Metals PtyLtd	0% - Farm-in agreement, right to earn up to 85% interest
		E04/2325	Strategic Metals PtyLtd
		E04/2562	North West Nickel PtyLtd	100%
	Jericho	E39/1914	CGM(WA)PtyLtd	95%
		P39/5600 to P395601	CGM (WA) Pty Ltd	100%
	Bunjarra Well	E39/1976	CGM (WA) Pty Ltd	95%
	Gibb Rock	E70/4869	CGM (WA) Pty Ltd	95% - Farm-out agreement, Ramelius Resources Ltd has the right to earn up to 75%interest
		E70/5194	CGM (WA) Pty Ltd	100% - Farm-out agreement, Ramelius Resources Ltd has the right to earn up to 75%interest
	Nulla South	E77/2353 to E77/2354	CGM (WA) Pty Ltd	95% - Farm-out agreement, Ramelius Resources Ltd has the right to earn up to 75%interest
	Kurrajong Bore	P37/8702 to P37/8711	CGM (WA) Pty Ltd	95%
		P37/9016 to P37/9017	CGM (WA) Pty Ltd	100%
		P37/9021	CGM(WA)PtyLtd	100%
		P37/9028	CGM(WA)PtyLtd	100%
	Julimar	E70/5118 to E70/5119	CGM (WA) Pty Ltd	100%
	Auralia	E69/3636 to E69/3637	CGM (WA) Pty Ltd	100%
	Barrabarra	E70/5263	CGM(WA)PtyLtd	100%
	Mt Jackson	E77/2577	CGM(WA)PtyLtd	100%
	SW Nickel	E70/5086	Banks, Aaron Peter; Keil, Michael; Roseberry HoldingsPtyLtd	100%
Victoria	Pyramid Hill	EL006661	CGM(WA)PtyLtd	100%
		EL006737 to EL006738	CGM (WA) Pty Ltd	100%
		EL006669	CGM(WA)PtyLtd	100%
		EL006805	CGM(WA)PtyLtd	100%
		EL006864	CGM(WA)PtyLtd	100%
		EL006898	CGM(WA)PtyLtd	100%
		EL006901	CGM(WA)PtyLtd	100%
		EL006960	CGM(WA)PtyLtd	100%

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Chalice Gold Mines Limited ABN 47 116 648 956 ASX : CHN | TSX : CXN | OTCQB: CGMLF

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	Location	Project	Tenement No.		Registered Holder	Nature of interest
	Northern Territory	Warrego North	EL23764 EL31608 EL31610		CGM (WA) Pty Ltd (51%) & Meteoric Resources NL (49%)	Farm-in agreement, right to earn up to 70% interest
					CGM(WA)PtyLtd	100%
					CGM(WA)PtyLtd	100%
	Queensland	Flinders River	EPM26858 EPM26863 EPM26861 EPM26864 to EPM26866		CGM Lithium PtyLtd	100%
					CGM Lithium PtyLtd	100%
					CGM Lithium PtyLtd	100%
					CGM Lithium Pty Ltd	100%
	2. Listing of tenements acquired (directly or beneficially) during the Quarter
	Location	Project	Claim Number	Registered Holder			Interest at beginning **of Quarter **	Interest at end of Quarter
	Western Australia	King Leopold	E04/1169	Waterford BayPtyLtd			0%	100% of the hard-rock mineral rights
			E04/2405	Waterford BayPtyLtd			0%
			E04/2299	Strategic Metals PtyLtd			0%	0% - Farm-in agreement, right to earnupto 85%interest
			E04/2325	Strategic Metals Pty Ltd			0%
			E04/2562	North West Nickel PtyLtd			0%	100%
		Julimar	E70/5119	CGM(WA)PtyLtd			0%	100%
		Gibb Rock	E70/5194	CGM(WA)PtyLtd			0%	100%
		Barrabarra	E70/5263	CGM(WA)PtyLtd			0%	100%
		Auralia	E69/3636 to E69/3637	CGM (WA) Pty Ltd			0%	100%
		Mt Jackson	E77/2577	CGM (WA) Pty Ltd			0%	100%
		SW Nickel	E70/5086	Banks, Aaron Peter; Keil, Michael; Roseberry Holdings PtyLtd			0%	100%
	Victoria	Pyramid Hill	EL006960	CGM (WA) Pty Ltd			0%	100%

3. Tenements relinquished, reduced or lapsed (directly or beneficially) during the Quarter

Location	Project	Tenement No.	Registered Holder	Interest at end of Quarter
Quebec	Kinebik	2448108 to 2448207	Chalice Gold Mines(Quebec)Inc.	0%
		2448409 to 2448497	Chalice Gold Mines(Quebec)Inc.	0%
		2449277 to 2449375	Chalice Gold Mines(Quebec)Inc.	0%
		2454112 to 2454113	Chalice Gold Mines(Quebec)Inc.	0%
		2454308 to 2454320	Chalice Gold Mines(Quebec)Inc.	0%
		2454863 to 2454867	Chalice Gold Mines(Quebec)Inc.	0%
		2466152 to 2466176	Chalice Gold Mines(Quebec)Inc.	0%
		2468010 to 2468012	Chalice Gold Mines(Quebec)Inc.	0%
		2499665 to 2499668	Chalice Gold Mines(Quebec)Inc.	0%
		2515283 to 2515284	Chalice Gold Mines(Quebec)Inc.	0%
		2514476 to 2514481	Chalice Gold Mines(Quebec)Inc.	0%

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Chalice Gold Mines Limited ABN 47 116 648 956 ASX : CHN | TSX : CXN | OTCQB: CGMLF

17

	Location	Project	Tenement No.	Registered Holder	Interest at end of Quarter
		East Cadillac	2385084	Chalice Gold Mines(Quebec)Inc.	0%
			2434329	Chalice Gold Mines(Quebec)Inc.	0%
			2434769 to 2434771	Chalice Gold Mines(Quebec)Inc.	0%
			2438058 to 2438067	Chalice Gold Mines(Quebec)Inc.	0%
			2438103 to 2438104	Chalice Gold Mines(Quebec)Inc.	0%
			2438130 to 2438133	Chalice Gold Mines(Quebec)Inc.	0%
			2438140 to 2438211	Chalice Gold Mines(Quebec)Inc.	0%
			2445500 to 2445501	Chalice Gold Mines(Quebec)Inc.	0%
			2456677 to 2456680	Chalice Gold Mines(Quebec)Inc.	0%
			2456713 to 2456714	Chalice Gold Mines(Quebec)Inc.	0%
			2457365 to 2457366	Chalice Gold Mines(Quebec)Inc.	0%
			2457890 to 2457892	Chalice Gold Mines(Quebec)Inc.	0%
			2458268 to 2458272	Chalice Gold Mines(Quebec)Inc.	0%
			2461488 to 2461495	Chalice Gold Mines(Quebec)Inc.	0%
			2466091 to 2466092	Chalice Gold Mines(Quebec)Inc.	0%
			2468029 to 2468043	Chalice Gold Mines(Quebec)Inc.	0%
			2470586	Chalice Gold Mines(Quebec)Inc.	0%
			2471188 to 2471202	Chalice Gold Mines(Quebec)Inc.	0%
			2472374 to 2472375	Chalice Gold Mines(Quebec)Inc.	0%
			2481223 to 2481300	Chalice Gold Mines(Quebec)Inc.	0%
			2491126	Chalice Gold Mines(Quebec)Inc.	0%
			2491239 to 2491250	Chalice Gold Mines(Quebec)Inc.	0%
			2491522	Chalice Gold Mines(Quebec)Inc.	0%
			2514628	Chalice Gold Mines(Quebec)Inc.	0%
			2515519	Chalice Gold Mines(Quebec)Inc.	0%
			2525102 to 2525138	Chalice Gold Mines(Quebec)Inc.	0%
			2535859 to 2535872	Chalice Gold Mines(Quebec)Inc.	0%
			2535906 to 2535959	Chalice Gold Mines(Quebec)Inc.	0%
			2437791 to 2437811	Globex MiningEnterprises Inc.	0%
			2437862 to 2437873	Globex MiningEnterprises Inc.	0%
			2437912 to 2437915	Globex MiningEnterprises Inc.	0%
			2438798 to 2438811	Chalice Gold Mines (Quebec) (40%) Globex MiningEnterprisesInc. (60%)	0%
			2438935 to 2438937	Chalice Gold Mines (Quebec) (40%) Globex MiningEnterprisesInc. (60%)	0%
			2443200 to 2443243	Renforth Resources Inc. 100%	0%
			2480250 to 2480258	Renforth Resources Inc. 100%	0%
			2481131 to 2481222	Renforth Resources Inc. 100%	0%
			2405317 to 2405327	Renforth Resources Inc. 100%	0%
			2423153 to 2423166	Renforth Resources Inc. 100%	0%
			2462745 to 2462751	Renforth Resources Inc. 100%	0%
			2477257 to 2477258	Renforth Resources Inc. 100%	0%
			2480184 to 2480187	Renforth Resources Inc. 100%	0%
			2484903	Renforth Resources Inc. 100%	0%

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Chalice Gold Mines Limited ABN 47 116 648 956 ASX : CHN | TSX : CXN | OTCQB: CGMLF

18

==> picture [579 x 136] intentionally omitted <==

i V. Lisitsin, A. Olshina, D.H. Moore & C.E. Willman 2007, Assessment of undiscovered mesozonal orogenic gold endowment under cover in the northern part of the Bendigo Zone, GeoScience Victoria Gold Undercover Report 2, Department of Primary Industries. http://earthresources.efirst.com.au/categories.asp?cID=42

==> picture [595 x 17] intentionally omitted <==

Chalice Gold Mines Limited ABN 47 116 648 956 ASX : CHN | TSX : CXN | OTCQB: CGMLF

19

Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

+Rule 5.5

Appendix 5B

Mining exploration entity and oil and gas exploration entity quarterly report

Introduced 01/07/96 Origin Appendix 8 Amended 01/07/97, 01/07/98, 30/09/01, 01/06/10, 17/12/10, 01/05/13, 01/09/16

Name of entity

Chalice Gold Mines Limited

ABN

47 116 648 956

Quarter ended (“current quarter”)

30 September 2019

Consolidated statement of cash flows	Current quarter $A’000	Year to date (3 months) $A’000
1. Cash flows from operating activities 1.1 Receipts from customers 1.2 Payments for (a) exploration & evaluation (b) development (c) production (d) staff costs (e) administration and corporate costs 1.3 Dividends received (see note 3) 1.4 Interest received 1.5 Interest and other costs of finance paid 1.6 Income taxes paid 1.7 Research and development refunds 1.8 Other: - Business development costs - Canadian transaction and restructuring costs(1) - GST refunds received 1.9 Net cash from / (used in) operating activities	76 (1,174) - - (385) (319) - 36 - - - (210) (142) 49	76 (1,174) - - (385) (319) - 36 - - - (210) (142) 49
	(2,069)	(2,069)

(1) Canadian transaction and restructuring costs associated with the disposal of the East Cadillac and Kinebik Gold Projects.

• See chapter 19 for defined terms 1 September 2016

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Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

Consolidated statement of cash flows	Current quarter $A’000	Year to date (3 months) $A’000
2. Cash flows from investing activities 2.1 Payments to acquire: (a) property, plant and equipment (b) tenements (see item 10) (c) investments (d) other non-current assets 2.2 Proceeds from the disposal of: (a) property, plant and equipment (b) tenements (see item 10) (c) investments (d) other non-current assets 2.3 Cash flows from loans to other entities 2.4 Dividends received (see note 3) 2.5 Other: - Tenement security deposits refunded - Proceeds from disposal of subsidiary (see item 10) 2.6 Net cash from / (used in) investing activities	(4) - (3,242) - 9 - 494 - - - 10 615	(4) - (3,242) - 9 - 494 - - - 10 615
	(2,118)	(2,118)
3. Cash flows from financing activities 3.1 Proceeds from issues of shares 3.2 Proceeds from issue of convertible notes 3.3 Proceeds from exercise of share options 3.4 Transaction costs related to issues of shares, convertible notes or options 3.5 Proceeds from borrowings 3.6 Repayment of borrowings 3.7 Transaction costs related to loans and borrowings 3.8 Dividends paid 3.9 Other: 3.10 Net cash from / (used in) financing activities	- - - (8) - - - - -	- - - (8) - - - - -
	(8)	(8)

• See chapter 19 for defined terms 1 September 2016

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Appendix 5B

Mining exploration entity and oil and gas exploration entity quarterly report

4. Net increase / (decrease) in cash and cash equivalents for the period 4.1 Cash and cash equivalents at beginning of period 4.2 Net cash from / (used in) operating activities (item 1.9 above) 4.3 Net cash from / (used in) investing activities (item 2.6 above) 4.4 Net cash from / (used in) financing activities (item 3.10 above) 4.5 Effect of movement in exchange rates on cash held 4.6 Cash and cash equivalents at end of period	4. Net increase / (decrease) in cash and cash equivalents for the period 4.1 Cash and cash equivalents at beginning of period 4.2 Net cash from / (used in) operating activities (item 1.9 above) 4.3 Net cash from / (used in) investing activities (item 2.6 above) 4.4 Net cash from / (used in) financing activities (item 3.10 above) 4.5 Effect of movement in exchange rates on cash held 4.6 Cash and cash equivalents at end of period	18,621 (2,069) (2,118) (8) 268	18,621 (2,069) (2,118) (8) 268	18,621 (2,069) (2,118) (8) 268
		14,694		14,694
5. Reconciliation of cash and cash equivalents at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts		Current quarter $A’000	Previous quarter $A’000
5.1 Bank balances 5.2 Call deposits 5.3 Bank overdrafts 5.4 Other (provide details) 5.5 Cash and cash equivalents at end of quarter (should equal item 4.6 above)		14,694 - - -	9,293 9,328 - -
		14,694	18,621
6. Payments to directors of the entity and their associates Current quarter $A'000 6.1 Aggregate amount of payments to these parties included in item 1.2 160 6.2 Aggregate amount of cash flow from loans to these parties included in item 2.3 - 6.3 Include below any explanation necessary to understand the transactions included in items 6.1 and 6.2
			Current quarter $A'000
			160
			-
Includes directors’ fees and salaries (including superannuation) of $160,000.

• See chapter 19 for defined terms 1 September 2016

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Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

7.	Payments to related entities of the entity and their	Current quarter
	associates	$A'000
7.1	Aggregate amount of payments to these parties included in item 1.2		-
7.2	Aggregate amount of cash flow from loans to these parties included		-
	in item 2.3
7.3	Include below any explanation necessary to understand the transactions included in
	items 7.1 and 7.2

	8. Financing facilities available Add notes as necessary for an understanding of the position Total facility amount at quarter end $A’000 Amount drawn at quarter end $A’000 8.1 Loan facilities - - 8.2 Credit standby arrangements - - 8.3 Other (please specify) - - 8.4 Include below a description of each facility above, including the lender, interest rate and whether it is secured or unsecured. If any additional facilities have been entered into or are proposed to be entered into after quarter end, include details of those facilities as well.	Total facility amount at quarter end $A’000	Amount drawn at quarter end $A’000
		-	-
		-	-
		-	-

9. Estimated cash outflows for next quarter	$A’000
9.1 Exploration and evaluation 9.2 Development 9.3 Production 9.4 Staff costs 9.5 Administration and corporate costs(1) 9.6 Other(2) 9.7 Total estimated cash outflows(3)	(1,800) - - (300) (240) (360)
	(2,700)

(1) Administration and corporate costs are net of estimated interest revenue and receipts from customers.

(2) Canadian transaction and restructuring costs associated with the disposal of the East Cadillac and Kinebik Gold Projects and estimated Business Development Costs.

(3) Estimated cash outflows do not include estimated cash outflows for investing activities. For the period 1 October 2019 to the date of this report, the Company has incurred cash outflows of $2,391,879 to acquire shares in Spectrum Metals Limited.

• See chapter 19 for defined terms

1 September 2016

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Appendix 5B

Mining exploration entity and oil and gas exploration entity quarterly report

10. Changes in tenements (items 2.1(b) and 2.2(b) above)	Tenement reference and location	Nature of interest	Interest at beginning of quarter	Interest at end of quarter
10.1 Interests in mining tenements and petroleum tenements lapsed, relinquished or reduced	Canada: Kinebik 2448108 to 2448207 2448409 to 2448497 2449277 to 2449375 2454112 to 2454113 2454308 to 2454320 2454863 to 2454867 2466152 to 2466176 2468010 to 2468012 2499665 to 2499668 2515283 to 2515284 2514476 to 2514481 East Cadillac 2385084 2434329 2434769 to 2434771 2438058 to 2438067 2438103 to 2438104 2438130 to 2438133 2438140 to 2438211 2445500 to 2445501 2456677 to 2456680 2456713 to 2456714 2457365 to 2457366 2457890 to 2457892 2458268 to 2458272 2461488 to 2461495 2466091 to 2466092 2468029 to 2468043 2470586 2471188 to 2471202 2472374 to 2472375 2481223 to 2481300 2491126 2491239 to 2491250 2491522 2514628 2515519 2525102 to 2525138 2535859 to 2535872 2535906 to 2535959 2437791 to 2437811 2437862 to 2437873 2437912 to 2437915 2438798 to 2438811	Owned Owned Owned Owned Owned Owned Owned Owned Owned Owned Owned Owned Owned Owned Owned Owned Owned Owned Owned Owned Owned Owned Owned Owned Owned Owned Owned Owned Owned Owned Owned Owned Owned Owned Owned Owned Owned Owned Owned Owned Owned Owned Owned	100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%	0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%

• See chapter 19 for defined terms 1 September 2016

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Appendix 5B

Mining exploration entity and oil and gas exploration entity quarterly report

10. Changes in tenements (items 2.1(b) and 2.2(b) above)	Tenement reference and location	Nature of interest	Interest at beginning of quarter	Interest at end of quarter
10.1 Cont’d Interests in mining tenements and petroleum tenements lapsed, relinquished or reduced	2438935 to 2438937 2443200 to 2443243 2480250 to 2480258 2481131 to 2481222 2405317 to 2405327 2423153 to 2423166 2462745 to 2462751 2477257 to 2477258 2480184 to 2480187 2484903	Owned Owned Owned Owned Owned Owned Owned Owned Owned Owned	100% 100% 100% 100% 100% 100% 100% 100% 100% 100%	0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
10.2 Interests in mining tenements and petroleum tenements acquired or increased	Western Australia: King Leopold E04/1169 and E04/2405 E04/2299 and E04/2325 E04/2562 Julimar- E70/5119 Gibb Rock- E70/5194 Barrabarra- E70/5263 Auralia- E69/3636 to E69/3637 Mt Jackson- E77/2577 SW Nickel– 70/5086 Victoria Pyramid Hill- EL006960	100% of the hard-rock mineral rights Farm-in agreement, right to earn up to 85% interest Owned Owned Owned Owned Owned Owned Owned Owned	0% 0% 0% 0% 0% 0% 0% 0% 0% 0%	100% 0% 100% 100% 100% 100% 100% 100% 100% 100%

Compliance statement

• 1 This statement has been prepared in accordance with accounting standards and policies which comply with Listing Rule 19.11A.

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

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Sign here: .. (Company secretary)

Date: 23 October 2019

Print name: Jamie Armes

• See chapter 19 for defined terms 1 September 2016

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Appendix 5B

Mining exploration entity and oil and gas 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 that wishes to disclose additional information is encouraged to do so, in a note or notes included in or attached to this report.

2. If this quarterly report has been prepared in accordance with Australian Accounting Standards, the definitions in, and provisions of, AASB 6: Exploration for and Evaluation of Mineral Resources and AASB 107: Statement of Cash Flows apply to this report. If this quarterly report has been prepared in accordance with other accounting standards agreed by ASX pursuant to Listing Rule 19.11A, the corresponding equivalent standards apply to this report.

3. Dividends received may be classified either as cash flows from operating activities or cash flows from investing activities, depending on the accounting policy of the entity.

4. See chapter 19 for defined terms 1 September 2016

Page 7