Chalice Gold Mines Limited

Symbol:  ASX: CHNTSX:  CXN
Shares outstanding:    250 million
Fully diluted: 256 million

PERTH, Western Australia, Oct. 24, 2012 /CNW/ - Chalice Gold Mines ("the Company") ASX:CHNTSX:CXN advises that its Activity and Cash Flow Reports for the quarter ended September 30, 2012 have been issued today.  The full texts of these reports are available at the Company's website www.chalicegold.com and under the Company's profile at www.sedar.com.

Quarterly Highlights

• Chalice completes the sale of the Zara Gold Project in Eritrea to China SFECO Group and ENAMCO for combined proceeds of US$114M.
• Chalice has a net cash of $80 million after tax following completion of the Zara transaction, with a focus on acquiring new projects.
• A capital reduction and return of 10 cents per share is proposed, subject to shareholder approval.
• Drilling of VTEM targets has recommenced at the Mogoraib North Project in Eritrea, located immediately north of the world-class Bisha Mine.
• A new gold target has been defined at the Area C Prospect, Mogoraib North.

SOURCE: Chalice Gold Mines Limited

Tim Goyder, Executive Chairman
Dr Doug Jones, Managing Director
Chalice Gold Mines Limited
Telephone [phone]

For media inquiries, please contact:

Nicholas Read
Read Corporate
Telephone: [phone]