Warrego North Project

Location

The Warrego North Project (EL23764) is located in the Tennant Creek Mineral Field in the Northern Territory of Australia (Figure 1).

Figure 1. Location map of Warrego North Project (EL23764) in the Tennant Creek Mineral Field

Geology and Exploration

Warrego North lies on the western extension of the Warramunga Formation, a sequence of Palaeoproterozoic turbiditic sediments which host all of the ironstone copper-gold-bismuth deposits in the Tennant Creek Mineral Field.

The project has been subject to historical exploration programs including aeromagnetic, ground magnetics and down-hole magnetic surveys and ground gravity with follow-up shallow reconnaissance vacuum drilling and selected RC drilling.

Aeromagnetic surveys have identified prominent magnetic anomalies over the western and eastern project areas as shown in Figure 2 below.

Figure 2. Total magnetic intensity image showing location of main magnetic anomalies and areas of RC drill testing.

Chalice believes most promising target is Parakeet, which is a composite circular 1km x 1km magnetic anomaly with an associated gravity anomaly.

Previous RC drilling at Parakeet intersected anomalous copper, bismuth and/or gold mineralisation, with a a strong apparent trend within the composite magnetic target (see Figure 3).

Modelling of the magnetic and gravity anomalies has identified potential depth extension below the current depth of RC drill testing (~200m depth).

Figure 3. Parakeet target showing previous and proposed drilling and interpreted mineralised structure on a TMI image.

Work Plan

Chalice plans to undertake an initial two-hole (800m) reverse circulation/diamond drilling program to test the Parakeet targets at depth (~300m depth) as shown in Figure 3. Drilling is targeted to test the magnetic model where it is interpreted to intersect with the apparent trend of mineralisation.

Acquisition Terms

A farm-in agreement with Meteoric Resources Limited gives Chalice the right to earn up to a 70% interest in the Project by sole funding a total of $800,000 in exploration expenditure. Chalice may earn an initial 51% by sole funding $400,000. Chalice is required to drill at least one diamond drill hole of at least 300m within 12 months.

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