Chalice Gold Mines Limited - Minimum shareholding buy-back

Symbol:                     ASX: CHNTSX:  CXN

Shares outstanding:              287 million

Fully diluted:                            294 million

PERTH, Western Australia, Oct. 17, 2014 /CNW/ - Chalice Gold Mines Limited (TSX:CXN; ASX:CHN) is pleased to announce that it intends to undertake a buy-back of ordinary shares for holders of unmarketable parcels of shares in the Company ("Buy-Back"). Under the Listing Rules of the Australian Securities Exchange, any shareholding valued at less than $500 is considered to be an "unmarketable parcel" of shares.

The Buy-Back will allow shareholders who hold unmarketable parcels of shares in the Company ("Eligible Shareholders") to sell their shares back to the Company at the Buy-Back price of 11.5 cents per share, being the Volume Weighted Average Price for the 5-day trading period preceding October 14, 2014 ("VWAP"). These shares will be cancelled once transferred to the Company in accordance with the Corporations Act 2001.

The Company values all of its shareholders and is offering this Buy-back to assist Eligible Shareholders to sell and realise their shares without incurring brokerage and other expenses.  The Company will pay for all costs related to this Buy-back (excluding tax consequences from the sale which remains the shareholder's responsibility) and expects to reduce administrative costs associated with maintaining a large number of very small holdings. 

In accordance with the Corporations Act 2001, the Company does not need shareholder approval for the buy-back of these shares.

Based on the Buy-Back price per share and the register of members of Chalice as at 5pm (WST) on October, 14 2014 ("Record Date"):

a)		an unmarketable parcel of shares is any shareholding of 4,347 shares or less;
b)		2,005 out of 3,783 shareholders hold an unmarketable parcel; and
c)		the aggregate value of the Chalice ordinary shares held by all holders of unmarketable parcels is $250,642.73.

Chalice shareholders who own 4,348 shares or more will not be eligible to participate in the Buy-Back.

The Company is sending the attached letter to Eligible Shareholders. Those who wish to retain their shares must complete and sign the Share Retention Form and forward it to Computershare Investor Services Pty Ltd, GPO Box 52, Melbourne, Victoria, Australia 3001, to be received by 5pm (WST) on  December 4, 2014 ("Closing Time").

Please note that the buy-back will not be extended to the Company's Canadian shareholders who hold shares on the Toronto Stock Exchange.

For and on behalf of the Board

(signed)

TIM GOYDER
Managing Director

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 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, risks related to actual results of 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.

October 17, 2014

Dear Shareholder

Offer by Chalice Gold Mines Limited to buy-back unmarketable parcels of shares ("Offer")

As announced on October, 17 2014, Chalice Gold Mines Limited ("Chalice" or the "Company") intends to complete a minimum holding share buy-back for holders of unmarketable parcels of shares in Chalice as at 5pm (WST) on October, 14 2014 ("Record Date").

The directors of Chalice recognise that holders of Chalice shares with a value of $500 or less may encounter difficulties selling their shares on the ASX. In order to allow these shareholders to sell their shares without incurring brokerage and other expenses, and to reduce the administrative and registry costs for the Company that are associated with unmarketable parcels, the directors have resolved to undertake a buy-back of unmarketable parcels of Chalice shares under the terms set out in this Offer and the procedure in Division 2 Part 2J.1 of the Corporations Act 2001 (Cth) ("Buy-Back").

Shares purchased by the Company under the Buy-Back will be cancelled.

Under the Listing Rules of the Australian Securities Exchange, any shareholding valued at less than $500 is considered to be an "unmarketable parcel" of shares. Based on the Buy-Back price of 11.5 cents per share (being the Volume Weighted Average Price for the 5 day trading period preceding October, 14  2014 ("VWAP"), an unmarketable parcel of shares is any shareholding of 4,347 shares or less. Our share registry shows that the number of shares held by you or an entity that is associated with you is an unmarketable parcel, which makes you one of the Eligible Shareholders.

On the basis of the Buy-Back price and the register of members of the Company as at October, 14 2014:

1.		2,005 out of 3,783 Chalice shareholders hold an unmarketable parcel; and
2.		the aggregate value of the Chalice ordinary shares held by all holders of unmarketable parcels is $250,642.73.

It is important to note that the market price of Chalice shares will change from time to time. The buy-back price under the Buy-Back may be more or less than the actual market price at the time of the sale and may not be the best price obtainable on the day on which your Chalice shares are bought back. The Company will not buy-back your shares if you wish to retain your shareholding. 

Your choices:

1.	If you would like the Company to purchase your unmarketable parcel of shares at 11.5 cents per share, you do not need to do anything.
2.	If you do not want your shares to be purchased by the Company under the Buy-Back, you must:
	a)	complete the enclosed Share Retention Form and return it to Computershare Investor Services Pty Ltd, GPO Box 52, Melbourne, Victoria, Australia 3001, by no later than 5pm (WST) on  December, 4 2014 ("Closing date"); or
	b)	top up your holding to a marketable parcel by either merging multiple holdings or acquiring additional Chalice shares on market such that your registered holding at the Closing Time (no later than 5 pm (WST) on December, 4 2014) is greater than 4,347 shares.

You are advised to allow reasonable time for the Share Retention Form to be received by the Company. If you hold shares in multiple holdings, some of which are unmarketable parcels, then the Company will purchase those unmarketable parcels unless a Share Retention Form is received for each holding.

If your shareholding is purchased, the sale proceeds will be forwarded to you by the Company as soon as practicable.

The Company makes no recommendation as to whether you should participate in the Buy-Back. You should seek independent professional advice when deciding whether to retain your shares and if you have any questions on how the sale may affect you.

While the Company will pay for all costs associated with this sale, any taxation consequences arising from the sale of unmarketable parcel under this Buy-Back will be your responsibility. Please consult your legal, financial or taxation advisor if you require information regarding possible taxation implications of the sale of unmarketable parcels under the Buy-Back.

If you require further information in respect of the Buy-back, please contact the Company on [phone].

For and on behalf of the Board

(signed)

Tim Goyder
Managing Director

SOURCE: Chalice Gold Mines Limited

please contact:Tim Goyder, Managing Director, Chalice Gold Mines Limited, Telephone [phone]; For media inquiries, please contact: Nicholas Read, Read Corporate, Telephone: [phone]