CHALICE MINING LIMITED — Investor Presentation 2011

May 11, 2011

Eritrea s ex’ N t Gold Miner

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RIU Resources Round-up May 2011 www.chalicegold.com

Disclaimer and Competent Persons Statement

• This presentation may contain value references and "forward looking statements“ which are subject to various risks and uncertainties that could cause actual results and future events to differ materially from those expressed or implied by such statements. Investors are cautioned that such statements are not guarantees of future performance and results.

This presentation does not include all available Information on Chalice Gold Mines Limited and should not be used in isolation as a guide to investing in the Company. Any potential investor should also refer to Chalice Gold Mines Limited Annual Reports and to ASX releases and take independent professional advice before considering investing in the Company.

For further information about Chalice Gold Mines Limited, visit the website at www.chalicegold.com

The information in this report that relates to Exploration Results is based on information compiled by Dr Doug Jones, a full ‐ time employee and Director of Chalice Gold Mines Limited , who is a Member of the Australasian Institute of Mining and Metallurgy and is a Chartered Professional Geologist. Dr Jones 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.

The Mineral Resource estimate was prepared by Mr. John Tyrrell who is a Member of the Australasian Institute of Mining and Metallurgy. Mr. Tyrrell is a full time employee of AMC and has sufficient experience in gold resource estimation to act as Competent Person as defined in the 2004 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code)'. Mr. Tyrrell consents to the inclusion of this i n ormat on n t f i i h e orm an f d context n w i hi c h t appears. i

The information in this statement of Ore Reserves is based on information compiled by Mr David Lee who is a Member of the Australasian Institute of Mining and Metallurgy and a full time employee of AMC. Mr Lee has sufficient relevant experience to be a Competent Person as defined in the JORC Code. Mr Lee consents to the inclusion of this information in the form and context in which it appears.

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Chalice Gold Mines – Project Overview

A gold exploration & development company focused in Eritrea Value underpinned by the high‐grade, low cost Zara Gold Project

Feasibility completed, permitting underway Open pit ‐ 760,000oz Ore Reserve @ 5.1g/t Au Average annual project production of 104,000oz over 7 year mine life Low cash operating costs US$338/oz

Eritrean Government to acquire 40% interest (30% contributing) Significant exploration upside

Located in the highly prospective and underexplored Arabian‐Nubian Shield 1437 km[2] of granted tenements

Drilling underway to test IP targets in ‘mine corridor’ Major regional exploration program underway Extensive regional tenement applications

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Corporate Snapshot and Capability

ASX: CHN; TSX: CXN

Capital Structure

Share Price Movement

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80
70
60
50
40
30
20
10
0
May10 Jul10 Sep10 Nov10 Jan11 Mar11
share
Cents per
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Share price A$0.41 70 Shares on issue 218 million 60 50 Market capitalisation ~A$90 million 40 Options on issue 7 million 30 20 ‐ Debt 10 Cash ~ A$4 million 0 May10 Jul10 Sep10 Nov10 Jan11 Mar11 Board Substantial Shareholders Tim Goyder Executive Chairman Franklin Resources 14.8% Dr Doug Jones Managing Director Directors & Management 12.8% Mike Griffiths Executive Director Lujeta Pty Ltd 7.4% Anthony Kiernan Non‐Executive Acorn Capital 4.7% Stephen Quin Non‐Executive Cit y ecur S iti es 3 . 0% 4

The Opportunity – by cash cost

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6 800
Cash Costs Grade (g/t)
5 700
655
4 577 600
531
517 514
492
3 500
456
428
2 400
310
338
1 300
0 200
Teranga Cluff Avocet SEMAFO Noble Adamus Centamin Perseus Banro Chalice
Grade (g/t) Cash Costs
Reserve (US$/oz)
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Current Comparative Market Valuation

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800
700
600
500
400
300
200
100
‐
Banro Chalice Centamin Perseus Adamus Teranga Noble Cluff Avocet SEMAFO
rve (A$/oz)
EV / Rese
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The Arabian‐Nubian Shield

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Centamin
Sukari Equinox
Jabal Sayid
15 year 10 year
500 koz pa Au 61 kt pa Cu
La Mancha Chalice
Hassai Zara
Nevsun Sunridge
6 year Bisha Asmara 7 year
156 koz pa + VMS 104 koz pa Au
5 year
>10 year
Cu Zn Ag Au
Au, Ag, Cu, Zn
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The Zara Project is located within southern Arabian‐Nubian Shield Current resources +20Moz gold

Over 1,000 recorded ancient copper and gold mines Minimal modern exploration

World‐class projects now being developed

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Significant Ground Position

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The Mine Site

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Koka Gold Deposit

Indicated Resource of contained gold 840,000 Oz

Probable Reserve of contained gold 760,000 Oz (within resource)

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*Both based on 1.2 g/t cut‐off

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Koka Generates Significant Cash for Chalice (60%)

		~~2014~~	~~2015~~	~~2016~~	~~2017~~	~~2018~~	~~2019~~	~~2020~~	~~2021~~
		~~$'~~ ~~m~~	~~$'~~ ~~m~~	~~$'~~ ~~m~~	~~$'~~ ~~m~~	~~$'~~ ~~m~~	~~$'~~ ~~m~~	~~$'~~ ~~m~~	~~$'~~ ~~m~~	~~l~~ ~~Tota~~
	~~Revenue~~	~~31~~	~~113~~	~~100~~	~~83~~	~~73~~	~~61~~	~~62~~	~~61~~	~~585~~
	~~Cash ~~~~Costs~~	~~(19)~~	~~(23)~~	~~(23)~~	~~(22)~~	~~(23)~~	~~(17)~~	~~(16)~~	~~(8)~~	~~(150)~~
	~~Royalties~~	~~(2)~~	~~(6)~~	~~(5)~~	~~(4)~~	~~(4)~~	~~(3)~~	~~(3)~~	~~(3)~~	~~(29)~~
	~~Taxes~~	~~0~~	~~(15)~~	~~(18)~~	~~(13)~~	~~(18)~~	~~(16)~~	~~(17)~~	~~(20)~~	~~(116)~~
	~~Total Net Chalice~~ ~~Cashflows (60%)~~	~~11~~	~~69~~	~~54~~	~~44~~	~~29~~	~~26~~	~~26~~	~~31~~	~~290~~

Assumptions:

Chalice 60% share of cash flows US$ 1300 gold price Uses 2010 Koka Feasibility Study Financial years ended 30 June

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Koka – Feasibility Study Production Profile

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160 900
Enamco (40%)
140 800 CHN (60%)
Cash Costs
700
120
600
100
500
80
400
60
300
40
200
20
100
‐ ‐
2014 2015 2016 2017 2018 2019 2020 2021
Financial years ended 30 June
oz's) oz)
uction
('000
Prod
ash costs (US$/
C
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Koka – Feasibility Study Cost Profile

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Operating Cost Estimates
Average mining costs (incl. pre‐strip) $/t mined 2.01
Processing cost $/t milled 24.78
General and administration $/t milled 7.36
Refining charges $/t milled 0.63
Refining
$/recoverable oz charges
Processing costs ($/t milled)
$4.00
1%
G&A costs
Average Personnel Maintenance
$46.70
14% Mining Costs Cost Materials
$129.80 14% 9%
38%
Processing Power
costs 59%
Consumables
$157.20
18%
47%
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Koka Development Schedule

	Calendar Year 2010 2011 2012 2013	Calendar Year 2010 2011 2012 2013	Calendar Year 2010 2011 2012 2013	Calendar Year 2010 2011 2012 2013	Calendar Year 2010 2011 2012 2013	Calendar Year 2010 2011 2012 2013	Calendar Year 2010 2011 2012 2013	Calendar Year 2010 2011 2012 2013	Calendar Year 2010 2011 2012 2013	Calendar Year 2010 2011 2012 2013	Calendar Year 2010 2011 2012 2013	Calendar Year 2010 2011 2012 2013	Calendar Year 2010 2011 2012 2013	Calendar Year 2010 2011 2012 2013	Calendar Year 2010 2011 2012 2013	Calendar Year 2010 2011 2012 2013
	Calendar Year	2010			2011				2012				2013
	Quarter	Q2	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4
	Feasibility Study Release 43‐101 ~~COMPLETED~~
	TSX listing Zara Permitting
	Funding Period Construction
	Pre‐Strip First Production

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Exploration Potential

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Zara North
BLEG & ‐80# gold anomalies
Rock‐chips to 27.5 g/t Au
Tenement
Boundary
Koka
840,000 oz Resource
3D IP Survey
& Soil
Konate
Sampling
Intersections to
7m @ 22.3g/t
2 km
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Koka 3D IP – Near Mine Targets

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Long Section
7.5km
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Koka 3D IP – Priority Targets Koka & Koka East

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Koka 3D IP – Priority Targets Konate & Fah

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Soil Sampling – northern Zara Tenements

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Assays received
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Extensive drainage gold anomalism identified on Zara North & Central EL’s ‐ gold values up to 876ppb

Regional‐scale high‐strain zone with carbonate‐sericite alteration and quartz veining

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Soil sampling coverage progressively
Koka
extended over gold‐anomalous trends
Gold anomalism defined o ver both
known mineralized zones and newly
Konate identified prospects
Fah
Numerous targets identified for
trenching and/or drill follow‐up
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Hammid Kier Prospect

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New Data ‐ Aeromagnetics & Radiometrics

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Hurum Exploration Licence

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40ppb Au
10- 40ppb Au
5 -10ppb Au
0 - 5ppb Au
Results pending
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Hurum EL granted January 2011

Exploration completed to date:

Airborne Magnetics & Radiometrics

Stream sediment BLEG & ‐80# sampling

Regional geological mapping Bab id ified tono Prospect ent Detailed mapping & soil sampling underway

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Mogoraib North Exploration Licence

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Located ~10 km north of Nevsun’s Bisha VHMS Project Area 555 sq km Geo og ca sett ng s ml i l i i ilar to Bisha Landsat spectral signatures similar to Bisha VTEM survey to commence May 2011 ‐ ~4000 line kilometres

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Exploration Timeline

Exploration program to generate strong news flow

Exp oration program tota ing ~l l $10M expected

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Calendar Year 2011
Quarter Q1 Q2 Q3 Q4
Induced
Polarisation (IP)
Survey
Aero‐Magnetics &
Radiometrics
VTEM
Geochemical Sampling &
Geological Mapping
Drilling – Koka IP targets 10,000m
Drilling ‐ Zara North 5,000m
Drilling – Mogoraib Nth 5,000m
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Summary

Value of Company underpinned by Koka Gold Deposit Advanced high grade gold deposit Feasibility completed

Strong economics

Low technical risk

Mine permitting in progress

Strategic ground position in emerging gold & base metal province

Aggressive exploration programs underway to expand current resource base

Experienced Board and Management with extensive expertise in African gold sector

Currently building development team

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Analysts Covering the Chalice Story

Australia Southern Cross Equities Peter Chapman E: pchapman@sceq.com.au T: +612 9231 0880 Paterson Securities Limited Simon Tonkin E: STonkin@psl.com.au T: +618 9225 2816 Argonaut Limited Troy Irvin E: troy@argonautlimited . com T: +618 9224 6871

Europe Ambrian Partners Limited E: adam.kiley@ambrian.com T: +44 (20) 7634 4777

North America Haywood Securities Limited Joe Mazumdar E: jmazumdar@haywood.com T: +1 (604) 697 7124 Stifel Nicolaus Canada Inc Josh Wolfson E: jwolfson@stifel.com T: +1 416 815 3080 26

Corporate Contact Details

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Tim Goyder Dr Douglas Jones Dan Hrushewsky Joanne Jobin Executive Chairman Managing Director Senior VP – Corporate Development Investor Relations – North America M: +61 418 942 908 M: 61 438 872 090 M: +1 647 864 2735 M: +1 647 964 0292 tgoyder@chalicegold.com djones@chalicegold.com dhrushewsky@chalicegold.com jjobin@chalicegold.com Chalice Gold Mines Limited Level 2, 1292 Hay Street, West Perth, Western Australia 6005 GPO Box 2890, Perth, Western Australia 6001 T: +618 9322 3960 F: +618 9322 5800 E: info@chalicegold.com W: www.chalicegold.com 27

Appendix 1: Eritrea Mining Act Summary

Prospecting licence

One year, not renewable & not transferrable Maximum size 100km[2] Licence fee (US)$33.33 Annual rental (US)$3.33/km[2]

Exploration licence

3 year term

• 2 renewals for 1 year each - transferrable with approval

One quarter relinquishment of original licence area with each renewal

Maximum size 50km[2] Licence fee (US)$100 Annual rental (US)$13 . 30/km[2]

Mining licence

Maximum of 20 years or life of deposit (whichever is shorter)

Royalties

5% for precious metals and 3.5% for other metallic minerals

Government Participation

10% free-carried interest at the mining stage 30% participating interest acquired by Government based on fair value

Taxes

Corporate income tax 38%

20% flat tax on expatriate employee earnings 0.5% on all imports of machinery equipment, vehicles and parts No dividend tax

Straight line depreciation over 4 years with no salvage

The right to carry forward operational losses and deduct them from gross income

Renewable for 10 years Maximum size 10km[2] Licence fee is (US)$400 Annual rental is (US)$40/km[2]

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Appendix 2: ENAMCO Interest

The Government of Eritrea, via the Eritrean National Mining Corporation (ENAMCO) has a 10% free‐carried interest in the Zara Project.

In addition, ENAMCO has the right to acquire a further 30% paid participating interest in the project.

The participating interest is to be acquired at a negotiated “fair value” based on an NPV valuation.

Under the Mining Code there is a provision to go to external arbitration if the parties cannot agree ‘fair value’.

Payment of ENAMCO’s equity will occur three months after grant of a Mining Licence.

ENAMCO will then contribute 33% of capital costs.

The project will be developed by a joint‐stock operating company with capital injected as shareholder loans.

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