Chalice Gold Mines and Coventry Resources to Merge

NOT FOR DISTRIBUTION ON U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE
UNITED STATES


Highlights:



--  Chalice and Coventry agree 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 
    
--  The transaction represents the first significant step in Chalice's
    stated strategy of acquiring quality assets while preserving its cash
    balance at approximately A$55M 
    
--  The proposed merger will combine Chalice's strong technical team and
    financial capacity with Coventry's quality gold asset located in a low
    risk, stable mining jurisdiction (Ontario, Canada) 
    
--  Coventry's 100%-owned Cameron Gold Deposit hosts Measured and Indicated
    Mineral Resources of 567,000 ounces of gold at 2.45 g/t, and an Inferred
    Mineral Resource of 829,000 ounces of gold at 2.11 g/t 
    
--  There is significant additional exploration potential within the Cameron
    Gold Camp, including defined Mineral Resources at the Dubenski and
    Dogpaw satellite deposits 
    
--  The proposed merger has the full support of the Boards of both companies



Australian gold company Chalice Gold Mines Limited (TSX:CXN)(ASX:CHN)
("Chalice") and Canadian gold developer Coventry Resources Inc. (ASX:CYY)(TSX
VENTURE:CYY) ("Coventry") are pleased to announce 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 (see Appendix A -
http://media3.marketwire.com/docs/coveappa0930.pdf). 


Chalice and Coventry have executed a binding term sheet for the proposed merger
and expect to execute an Arrangement Agreement ("AA") shortly. The proposed
transaction represents the first significant step in Chalice's stated strategy
of acquiring quality resource assets capable of generating strong cash flow (See
Appendix B - http://media3.marketwire.com/docs/coveappb0930.pdf). 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")
which is expected to be executed by 18 October 2013. 


The Merger is subject to a due diligence period of 14 days and will require
approval by 2/3 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. 


The parties anticipate signing the definitive Arrangement Agreement by October
25, 2013 with a view to completing the Merger by mid-December, 2013. A full copy
of the Term Sheet is included in Appendix C
(http://media3.marketwire.com/docs/coveappc0930.pdf).


Overview of the Cameron Gold Deposit 

The Cameron Gold Deposit currently comprises an NI 43-101/JORC (2004) (1.0 g/t
cut-off) compliant Measured and Indicated Mineral Resource of 567,100 ounces of
gold at 2.45 g/t and an Inferred Mineral Resource of 830,100 ounces of gold at
2.11 g/t. In addition, at two satellite deposits, there are NI 43-101/JORC(2004)
(1.0 g/t cut-off) compliant Mineral Resources at Dubenski of 59,000oz Indicated
at 2.28 g/t and 18,200oz at 1.44g/t Inferred; and NI 43-101/JORC(2012) (1.0 g/t
cut-off) compliant Mineral Resources at Dogpaw of 24,000oz indicated at 3.02 g/t
and 4,600oz at 2.27g/t inferred. 


A positive Preliminary Economic Assessment ("PEA") was completed on the deposit
in January 2013 which showed average annual production of 61,000 ounces of gold
and an initial 10-year mine life at an average cash cost of US$852/oz. Initial
development and capital expenditure was estimated at US$110 million (inclusive
of $17m contingency). 


The PEA is considered preliminary in nature and includes Inferred Mineral
Resources that are considered too speculative geologically to have the economic
considerations applied to them that would enable them to be categorised as
mineral reserves and there is no certainty that the PEA will be realised.
Mineral Resources that are not mineral reserves do not have demonstrated
economic viability.


Overview of Merged Group and Management Comment 

Following completion of the merger, Chalice will have approximately 302.3
million shares outstanding and is forecasting a cash balance of approximately
A$54 million as at 31 December, 2013 for the Merged Group, putting it in a
strong position to progress the Cameron Gold Project, while still having the
financial capacity to continue to execute its strategy of acquiring other
quality resource assets globally. 


Coventry's corporate office in Perth will transfer to the Chalice corporate
office and Steven Chadwick will continue to support the handover and future
development of the Cameron Project in his existing role as Technical Manager for
Chalice, with in country operations expected to remain unchanged. The Board of
Chalice, as the surviving entity following the merger, is expected to remain
unchanged.


Commenting on the transaction, Chalice's Managing Director, Mr. Bill Bent, said:

"The Cameron Gold Project is a quality asset in a low-risk, favourable mining
jurisdiction. The transaction preserves our strong cash balance while the low
holding costs of the Cameron Project provide us with plenty of flexibility in
our future development strategy as we continue to look at further complementary
transactions targeting high quality projects capable of generating strong cash
flow." 


"What particularly attracted us to this project were the good grades, excellent
exploration upside potential and access to good infrastructure with a local
labour force with strong mining experience. This project sits right in our sweet
spot in terms of our current technical capability and I am very confident we can
add significant value to this project with our current team and a focused
exploration budget. We are delighted to have the opportunity to participate in
the project's future development."


Commenting on the transaction, the President of Coventry, Mr. Steven Chadwick,
said: 


"The proposed merger with Chalice represents an excellent opportunity to fund
the ongoing exploration and potential ultimate development of the Cameron Gold
Project in an extremely difficult economic climate. Existing Coventry
shareholders will hold approximately 17% of the merged entity and will continue
to have exposure to the project through their shareholding in Chalice, while
also benefiting from Chalice's strong balance sheet, experienced technical team
and the future growth of the Company. Shareholders will have exposure to any
future transactions that Chalice undertakes as it seeks further quality resource
assets globally."




Bill Bent                             Steven Chadwick                       
Managing Director                     President and CEO                     
Chalice Gold Mines Limited            Coventry Resources Inc.               
                                                                            
30 September 2013                                                           



Competent Persons and Qualified Person Statement - Chalice

The information in this news release 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 2012 edition of the Australasian
Code for Reporting of Exploration Results, Minerals Resources and Ore Reserves,
and is a Qualified Person under National Instrument 43-101 - 'Standards of
Disclosure for Mineral Projects'. The Qualified Person has verified the data
disclosed in this release, including sampling, analytical and test data
underlying the information contained in this release. Dr Jones consents to the
release of information in the form and context in which it appears here. 


Competent Persons and Qualified Person Statement - Coventry

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 document 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 document and Chalice Gold Mines Limited (the
Company) does not intend, and does not assume any obligation, to update these
forward-looking statements, except as required by law or regulation.


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, statements with respect to the estimation of
mineral reserves and Mineral Resources, the realization of mineral reserve
estimates, the likelihood of exploration success, 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, expects or does not expect, is expected, budget, scheduled,
estimates, forecasts, intends, anticipates or does not anticipate, or believes,
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 include, among others, the conditions to the completion
of the merger between Chalice and Coventry Resources are not met, risks related
to actual results of current exploration activities, changes in project
parameters as plans continue to be refined, future prices of Mineral Resources,
progressing the project beyond a PEA, the ultimate economics of a future
project, future permitting, future funding of the project, possible variations
in ore reserves, grade or recovery rates; accidents, labour disputes and other
risks of the mining industry, 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. 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.

None of the securities anticipated to be issued pursuant to the Arrangement have
been or will be registered under the United States Securities Act of 1933, as
amended (the "U.S. Securities Act"), or any state securities laws, and any
securities issued in the Arrangement are anticipated to be issued in reliance
upon available exemptions from such registration requirements pursuant to
Section 3(a)(10) of the U.S. Securities Act and applicable exemptions under
state securities laws. This press release does not constitute an offer to sell
or the solicitation of an offer to buy any securities.


ABN 47 116 648 956 

FOR FURTHER INFORMATION PLEASE CONTACT: 
Chalice Gold Mines Limited
Bill Bent
Managing Director
(W): [phone]
(M): [phone]


Chalice Gold Mines Limited
Tim Goyder
Executive Chairman
(W): [phone]


Chalice Gold Mines Limited
Keith Smart
Business Development Manager
(W): [phone]


For media inquires, please contact:
Read Corporate
Nicholas Read
[phone]


Coventry Resources Inc.
Steven Chadwick
President & CEO
(W): [phone]