Eritrea Overview

Zara Project (Chalice 100% Interest)*

The Zara Project consists of six contiguous granted licences covering an area totalling 615 square km situated in northern Eritrea, approximately 160 km northwest of the country’s capital, Asmara.

A significant high grade gold deposit has been defined at the Koka Gold Deposit, with a JORC Indicated and Inferred resource of 5 million tonnes at 5.3 grams per tonne gold for 840,000 ounces of contained gold.

Chalice has recently completed a Feasibility Study with the aim of commencing development at the Koka Gold Deposit in 2011.  Combined with an aggressive exploration program for gold and base metals, Chalice and its shareholders are well placed for rapid growth.

*  The government of Eritrea has a 10% non-contributing interest in any mining operation, but may acquire, on the basis of an independently determined valuation, an additional 20% contributing interest.