POLARX LIMITED — M&A Activity 2013

Oct 28, 2013

Fast Facts TSX-V/ASX: CYY

Share price (29 October 2013)	A$0.08
Shares on issue	90.97M
Options ($0.50-$5.00)	3.6M
Warrants ($0.45)	9.4M
Market capitalisation	~ $7.3M

Major Shareholders

Sun Valley Gold Master Fund 15.0% Macquarie Bank Limited 7.0% Directors/Management 6.92%

Directors and Management

Don Halliday Non-Executive Director Steven Chadwick Director, Interim President and CEO Nick Day Director, CFO and Company Secretary Tony Goddard Non-Executive Director Eric Edwards Non-Executive Chairman Mike Haynes Non-Executive Director Robert Boaz Non-Executive Director

Key Projects

Cameron Gold Camp Project, 100% Gold Exploration and Development, NW Ontario, Canada

Rainy River District Properties, 100% Gold Exploration, NW Ontario, Canada

Investment Highlights

• Positive Preliminary Economic Study completed for the Cameron Gold Camp Project.
• Large underexplored ground position within close proximity to the Rainy River Gold Deposit.

HIGHLIGHTS

Chalice Gold Mines Limited Merger

• Chalice and Coventry have agreed to merge by way of Statutory Plan of Arrangement.
• Consideration will comprise 1 Chalice Share for every 1.78 Coventry Shares.
• The offer represents a premium of approximately 23% based on the closing share prices of Chalice and Coventry on the ASX on Friday 27th September 2013.
• Chalice's has a preserved cash balance of approximately A$55M.
• The proposed merger will benefit from the addition of Chalice's strong technical team and financial capacity with Coventry's quality gold asset located in a low risk, stable mining jurisdiction (Ontario, Canada).

Cameron Gold Project

• Initial results from prospecting and pitting program underway; have identified two prospective mineral occurrences associated with strong hydrothermal alteration.
• Rock chip results up to 7.96g/t Au.

Corporate

• Significant cuts to expenditure and personnel implemented in response to industry pressures.
• C$2million of cash on hand at the end of the quarter.

Chalice Gold Mines Limited Merger

Australian gold company Chalice Gold Mines Limited (TSX: CXN; ASX: CHN; "Chalice") and Coventry Resources Inc. announced on 1 October that they have agreed to merge the two companies by way of a Statutory Plan of Arrangement ("Merger") under the British Columbia Business Corporations Act. The proposed merger will combine Chalice's strong cash position of A$55 million with Coventry's 100% interest in the Cameron Gold Camp in Ontario, Canada.

Chalice and Coventry have executed a binding term sheet for the proposed merger and expect to execute an Arrangement Agreement ("AA") shortly. The structure of the transaction will preserve Chalice's strong cash position while giving Coventry shareholders exposure to a well-funded resource company with a strong technical capability and clear growth strategy.

Under the proposed Merger, Coventry shareholders will receive 1 Chalice Share for every 1.78 Coventry Shares and will hold approximately 17% of the merged company. Other security classes, comprising options and warrants, are to be exercised by the holder, converted to Chalice options and/or warrants or purchased by Chalice as may be agreed between the option and warrant holders and Chalice. Further details will be provided in the Arrangement Agreement ("AA").

The Merger is subject to a due diligence period of due diligence period to be completed on or before 2 November 2013 and will require approval by ⅔ of eligible Coventry security holders voting at a special meeting of the company, the Supreme Court of British Columbia, as well as the Toronto Stock Exchange, Vancouver Stock Exchange and the Australian Securities Exchange. The Merger is not subject to approval by Chalice shareholders.

The proposed Merger has the full support of the Board of Directors of both Chalice and Coventry. The Board of Coventry has advised Chalice that, in the absence of an unfavourable fairness opinion or a superior offer, it will unanimously recommend that its shareholders vote in favour of the proposed Merger.

Cameron Gold Project

Figure 1 - Location map of the Cameron and West Cedartree Gold Projects, with main deposits highlighted, as well as gold prospects and occurrences.

During the quarter a combined prospecting and pitting program was undertaken to follow up on the positive results reported in the June quarter. This follow-up program consisted of excavating some 94 pits to reduce the sample spacing between test pits to 50m in the areas of existing priority gold-in-till anomalies (see Figure 2). The pit sampling program comprised the mechanical excavation of the glacial till to the basal layer (where possible) followed by extensive sampling and geological logging.

Pits were excavated at:

• Cameron targeting an untested zone immediately adjacent to the deposit.
• Galatea, Jupiter and Juno targeting along strike and sub-parallel related mineralization of the Cameron Gold deposit.
• Hermione and Leander and CP-3-180 targeting regional till anomalies.

Figure 2. Location of pitting and prospecting areas of interest

At the end of the quarter all samples from the pitting program had been submitted for analysis for Bulk Leach Extractable Gold (BLEG), Aqua Regia – Inductively Coupled Plasma (AR-ICP) and Instrumental Neutron Activation Analysis (INAA) for multi-elements. The results will be reported next quarter when available.

The results of the pit sampling are intended to improve the robustness of the anomalies, locate the likely source of anomalism and therefore facilitate the preparation of ongoing follow-up exploration programs.

A program of outcrop mapping and prospecting was carried out in areas of close proximity to existing till anomalies (see Figure 2). In particular areas near to the Galatea, Hermoine, Juno, Leander, Apollo and Mars anomalies were examined to locate potential outcropping sources of the till anomalies. Although regional scale mapping has already been completed by Coventry over these areas, the program focused on locating and detailed examination of any outcrop near to the anomalous areas, with emphasis on structural

deformation, alteration and sulphide mineralization. Limited outcrop was uncovered and sampling returned no anomalous results.

Initial results from two historical mineral occurrences with limited exploration have produced some positive results. The first located at the north shore of Sullivan Bay consists of quartz-albite-(Fe) carbonate veining occurring on the contact of mafic volcanic unit and a Quartz Feldspar Porphyry. This occurrence was traced for 60m along strike until it was lost underneath overburden. The second area, the Otterskin prospect consists of two sub-parallel quartz-albite-(Fe) carbonate breccia veins 0.5-2m in width.

Representative rock chip samples were collected at each of the following locations, 12 samples at Sullivan Bay and 8 samples at Otterskin. The rock chip samples were analyzed for gold by Fire Assay, with gravimetric determination (FA-Gravimetric). Significant rock chip analysis results from Sullivan Bay and Otterskin are located in tables 1 and 2 respectively. The results from Sullivan Bay warrant further investigation.

Sample ID	Easting	Northing	Lithology	Au (g/t)
1083728	453,283	5,460,087	Quartz Feldspar Porphyry	1.04
1083729	453,306	5,460,081	Qz-Alb-(fe) carbonate Vein	3.82
1083730	453,283	5,460,087	Qz-Alb-(fe) carbonate Vein	7.96
1083732	453,283	5,460,087	Mafic: Basalt with vein quartz	4.61
1083747	453,272	5,460,098	Quartz Feldspar Porphyry	0.79
1083748	453,270	5,460,095	Qz-Alb-(fe) carbonate Vein	0.29
1083749	453,251	5,460,097	Qz-Alb-(fe) carbonate breccia veinlet	1.72
1083750	453,250	5,460,097	Mafic: Basalt	4.38

Table 1: Sullivan Bay rock chip sample results

Table 2: Otterskin rockchip sample results

Sample ID	Easting	Northing	Lithology	Au (g/t)
1083733	453,549	5,455,169	Qz-(fe) carbonate-alb-chl Vein	0.65
1083734	453,546	5,455,160	Qz-(fe) carbonate-alb-chl Vein	2.51
1083759	453,535	5,455,096	Quartz-Alb-(fe) carbonate Breccia Vein	0.55

CORPORATE

Corporate Costs

During the quarter the Company continued to enforce its cost cutting measures:

• Several technical and administration staff members were made redundant;
• All Executive Directors had their salaries and/or consulting fees temporarily cut by 50%; and
• All Non-Executive Directors had their compensation temporarily reduced to $0.

During the quarter the following unlisted options expired:

Number of Options	Exercise Price	Expiry Date
125,650	C$1.24	30/7/2013

ABOUT COVENTRY RESOURCES INC.

Coventry Resources Inc. is advancing the Cameron Gold Camp in northwestern Ontario, Canada towards production. In addition to the existing resource, Coventry has identified a number of exploration targets along the Cameron Lake Shear Zone and at its highly-prospective Rainy River District properties where the Company believes it can continue to expand Coventry's resource base. The Company is led by a strong management team with the proven ability to explore, develop, finance and operate mining projects.

For further information about Coventry Resources Inc., please contact:

Steven Chadwick Interim President and CEO +61 8 9324 1266 schadwick@coventryres.com

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

QUALIFIED AND COMPETENT PERSONS

Nicholas Walker, General Manager, of Coventry Resources Inc., supervising the Company's exploration at the Cameron Gold Camp Project, is the Company's Qualified Person, as defined by National Instrument 43-101 and is responsible for the Exploration content of this press release.

The information in this announcement that relates to Exploration Results is based on information compiled by or under the supervision of Mr Nicholas Walker, a Member of the Australian Institute of Geoscientists and employee of Coventry Resources Inc., Mr Walker has sufficient experience which is relevant to the style of mineralization and type of deposit under consideration and the activity he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves". Mr Walker consents to the inclusion in the announcement of the matters based on his information in the form and context in which it appears.

The mineral resource statements for all mineral resource estimates within the Cameron Gold Camp Project have been prepared by Mr Peter Ball of Datageo Geological Consultants, an "independent qualified person" as that term is defined in National Instrument 43-101.

The information in this report that relates to the Cameron Gold Deposit and Dubenski Gold Deposit Mineral Resources or Ore Reserves is based on information compiled by Mr Peter Ball who is a Chartered Professional and Member of the Australasian Institute of Mining and Metallurgy. Mr Ball is the Director of DataGeo Geological Consultants. Mr Ball has sufficient experience which is relevant to the style of mineralization and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Ball consents to the inclusion in the announcement of the matters based on his information in the form and context in which it appears.

The information in this report that relates to the Dogpaw Gold Deposit Mineral Resources or Ore Reserves is based on information compiled by Mr Peter Ball who is a Chartered Professional and Member of the Australasian Institute of Mining and Metallurgy. Mr Ball is the Director of DataGeo Geological Consultants. Mr Ball has sufficient experience which is relevant to the style of mineralization and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Ball consents to the inclusion in the announcement of the matters based on his information in the form and context in which it appears.

Forward Looking Statements

This news release may contain "forward-looking statements" and/or "forward-looking information" within the meaning of applicable securities regulations in Canada and the United States (collectively, forward-looking information"). Any forward-looking information contained in this news release is made as of the date of this news release. Except as required under applicable securities legislation, Coventry Resources Inc. ("Coventry") does not intend, and does not

assume any obligation, to update this forward-looking information. Forward-looking information includes, but is not limited to, statements with respect to completion of a Feasibility Study, completion of new resource estimates, construction or operation of a mine, mineral resource estimates, drill plans, planned work programs, future upgrading of mineral resources and expected outcomes. Often, but not always, forward-looking information can be identified by the use of words such as "plans", "expects, "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", or "believes", or the negatives thereof 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.

Any forward-looking information contained in this news release is based on certain assumptions that Coventry believes are reasonable, including, with respect to any mineral resource estimates, the key assumptions and parameters on which such estimates are based, that the current price of and demand for gold will be sustained or will improve, that general business and economic conditions will not change in a material adverse manner, that financing will be available if and when needed on reasonable terms, that supplies, equipment, personnel, permits and local community approval required to conduct Coventry's planned exploration and development activities will be available on reasonable terms and that Coventry will not experience any material accident, labour dispute, or failure of equipment.

However, forward-looking information involves known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Coventry to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information. Such factors include, among others, risks and uncertainties relating to the actual results of exploration activities being different than anticipated, cost of labour increasing more than expected, cost of equipment or materials increasing more than expected, fluctuations in the price of gold and other commodities, currency fluctuations, mineral resources not being as estimated, unexpected variations in mineral resources, grade or recovery rates, risk of accidents, labour disputes and other risks generally associated with mineral exploration and unanticipated delays in obtaining or failing to obtain governmental or community approvals or financing. Although Coventry has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking information, there may be other factors that cause actions, events or results to not be as anticipated, estimated or intended. There can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Readers are cautioned not to place undue reliance on forward-looking information due to the inherent uncertainty thereof.

Preliminary Economic Study

The PEA is preliminary in nature, and is based in part on Inferred Mineral Resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as Mineral Reserves. There is no certainty that the results of the PEA will be realized. The pea contains full details of the basis for the study and the qualifications and assumptions made by the authors. A copy of the report is available on the Company's website (www.coventryres.com) and under the Company's profile on SEDAR (www.sedar.com).

United States Disclaimer

This quarterly activities report, as required by applicable Australian laws, does not constitute an offer of the securities described herein. These securities have not been registered under the United States securities act of 1933, as amended, or any state securities laws, and may not be offered or sold in the United States or to U.S. persons unless registered or exempt therefrom.

Appendix 1

NI 43-101 and JORC-Code (2004) compliant mineral resource estimate* for the Cameron Gold Deposit, part of the Cameron Gold Camp Project.

Cut-off grade(g/t gold)	Category	Tonnes	Grade(g/t gold)	Ounces ofGold
1.0	Measured	2,472,000	2.68	213,000
	Indicated	4,724,000	2.33	354,000
	Measured &Indicated	7,196,000	2.45	567,000
	Inferred	12,226,000	2.11	829,000

*Mineral resources are not mineral reserves and do not have demonstrated economic viability. All figures are rounded to reflect the relative accuracy of the estimate.

NI 43-101 and JORC-Code (2004) compliant mineral resource estimate* for the Dubenski Gold Deposit, part of the Cameron Gold Camp Project.

Cut-off grade(g/t gold)	Category	Tonnes	Grade(g/t gold)	Ounces ofGold
1.0	Indicated	806,000	2.28	59,000
	Inferred	392,000	1.44	18,200

*Mineral resources are not mineral reserves and do not have demonstrated economic viability. All figures are rounded to reflect the relative accuracy of the estimate.

NI 43-101 and JORC-Code (2012) Compliant Mineral Resource Estimate*, Dogpaw Gold Deposit, part of the Cameron Gold Camp Project.

Cut-off grade(g/t gold)	Category	Tonnes	Grade(g/t gold)	Ounces ofGold
0.5	Indicated	247,000	3.02	24, 000
	Inferred	64,000	2.27	4,600

*Mineral resources are not mineral reserves and do not have demonstrated economic viability. All figures are rounded to reflect the relative accuracy of the estimate.