Chalice Gold Mines and Coventry Resources agree to revised deal structure

Symbol:  ASX: CHNTSX:  CXN
Shares outstanding:    251 million
Fully diluted: 259 million

PERTH, Western Australia, Nov. 1, 2013 /CNW/ - Chalice Gold Mines Limited (TSX: CXN; ASX: CHN)( "Chalice") advises it has agreed to amend the structure and terms of the proposed merger as announced on September 30, 2013 with Coventry Resources Inc. (ASX: CYY; TSXV: CYY; "Coventry"). Chalice also advises it has satisfactorily completed its due diligence and will proceed with the Transaction as described below.

Under the revised deal structure (the "Transaction"), Chalice will not merge directly with Coventry  but will acquire a 100% interest in Coventry's subsidiary companies ("Coventry Subsidiaries") holding the Cameron Gold Project, the West Cedartree assets, the Rainy River Project and the Ardeen Gold Project for 46 million shares in Chalice ("the Transaction"). The Chalice shares will be distributed directly to Coventry shareholders on a pro rata basis and the Transaction will proceed by a plan of arrangement under the British Columbia Business Corporations Act.

The conditions precedent to completing the Transaction include the following:

• The receipt of necessary approvals, including those of the Toronto Stock Exchange, the TSX Venture Exchange and the Australian Securities Exchange and as may be required under appropriate mining legislation:
• Shareholders of Chalice (if required by regulatory bodies) and Coventry approving the Transaction and in relation to Coventry such shareholder approval as may be necessary to facilitate the in specie distribution of the Chalice shares;
• The unanimous recommendation (of the Transaction) of the Coventry Board (subject to  fiduciary duty carve-outs);
• Court approval of the Transaction as required under the British Columbia Business Corporations Act;
• Other customary conditions precedent, including the absence of a material adverse change in the business affairs of the Coventry Subsidiaries and Chalice.
  
  

A binding Term Sheet has been executed today and the more formal Arrangement Agreement ("AA") will be executed shortly.

If the conditions relating to regulatory and shareholder approvals are not obtained within 90 days of execution of the AA then either Coventry or Chalice shall be at liberty to terminate the Transaction by notice in writing to the other party.

The AA will contain customary no talk/no shop and right to match provisions. A break fee of A$350,000 will be payable to Chalice if the Coventry Board changes its Board recommendation other than where it is required to do so to meet its fiduciary obligations.  For further details on the Transaction please see the attached Term Sheet.

The proposed Transaction has the unanimous support of the Board of Directors of both Coventry and Chalice.  The Board of Directors 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 Transaction.

BILL BENT
Managing Director
Chalice Gold Mines Limited

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 whether the conditions to the Transaction will be met, the estimation of mineral reserves and mineral resources, the realisation 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, conditions precedent to completion of the Transaction being 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; 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.

PDF available at: http://stream1.newswire.ca/media/2013/11/01/20131101_C9213_DOC_EN_32811.pdf

SOURCE: Chalice Gold Mines Limited

Bill Bent, Managing Director
Chalice Gold Mines Limited
Telephone (W): [phone]

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

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

For media inquiries, please contact:

Nicholas Read
Read Corporate 
Telephone: [phone]