Mount Oxide

Queensland, 100 per cent ownership, Copper

An 80% increase (announced on 28 February 2008) in the Mount Oxide mineral resource estimate to 203,000 tonnes of contained copper, together with the majority Indicated status of the resource, strengthens the project’s potential for development in the current strong copper market.

Mount Oxide has considerable potential as a low cost near term development project. Mount Oxide is located in a proven mineralised system in the highly prospective Mount Isa region and is part of Perilya’s 720 square kilometre tenement holding in this area.  It is close to existing infrastructure.

Within the project area, Mount Oxide mine produced 51,000 tonnes of secondary copper ore at a grade of 21 per cent copper from an underground mining operation to a depth of 90 metres below surface, prior to 1958. Between 1968 and 1971, an unknown quantity of ore was also extracted from an open pit at the mine.

The potential of the deposit was proven by previous shallow open cut mining and the resource is open at depth.  Mount Oxide is located 25 kilometres from an under-utilised processing facility and close to a major mining service town.

Sale of Mount Oxide Copper Project into a Separate and Focussed Exploration Company

Perilya Limited (ASX:PEM) entered into a Heads of Agreement on 11 September 2008 with Chalice Gold Mines (ASX:CHN) for Chalice to acquire 100% of Perilya's interest in the Mount Oxide copper and cobalt project located in the Mt Isa region in northen Queensland. 

Under the terms of the agreement, Perilya will receive 200 million shares in Chalice and through this shareholding in Chalice, Perilya shareholders retain a 73% interest in the Mount Oxide project.

Following completion of the sale and a review of Perilya's capital management requirements for the resized Broken Hill Operation, a prudent capital management strategy will be initiated with a view to identifying the best way of maximising and returning value directly to Perilya shareholders.

The acquisition of Perilya's Mount Oxide project by Chalice and the issue of the Chalice shares in consideration is subject to certain conditions precedent, including mutual due diligence, Chalice shareholder and other regulatory approvals. Further details on the transaction will be provided in due course.

For the latest information regarding Mount Oxide please refer to the Chalice Gold website by clicking here