Chalice

The Chalice and Trident Gold Mines in Western Australia make up the Higginsville Gold Operation located near Higginsville, 125 kilometres south of Kalgoorlie, which makes it part of the rich Eastern Goldfields. The mines are 100 percent owned by Canadian, Yukon Territory registered, global gold mining company, Alacer Gold Corporation. The operation comprises both open pit and underground mining, although the company intends focusing its attention on underground mining into the future in an effort to increase the grade of the gold it mines. Alacer acquired the mine from Avoca Resources in 2011 during a merger agreement between the two companies.

Gold From The Chalice Mine is Processed On-site

Gold is recovered at the on site processing plant by means of a carbon-in- leach (CIL) technology, as well as a gravity circuit that recovers the coarser gold particles. The gold processing plant is capable of handling 1.3 million tonnes of ore a year. In 2012 the gold recovery at the Higginsville operations produced 136,687 ounces. Probable and proven reserves at the mine are reported to be 7.9 million tonnes delivering 3.5 grams per tonne for 875,000 ounces. As at December 2011 the Indicated and measured resources stood at 11.1 million tonnes at three and a half grams per tonne for one and a quarter million ounces.

Company Believes its Future is Underground

Much of the gold mined in the Higginsville area in the past has been taken from the surface via open pit mining methods. Few have bothered to mine to any great depth. However, Alacer feel continuous exploration at depth will extend its operations far beyond what the current reserve findings indicate.

Conventional Stoping and Paste Backfill Methods Used Underground

Underground mining operation methods involve mechanised open stoping with the stopes being paste backfilled. This method allows for maximum ore recovery by not having to leave pillars to stabilise the roof.

Reduced Tonnage to Give Bigger Profits

Alacer have decided to reduce the overall tonnage taken from their mining operations at Higginsville in an effort to grow their cash margins. Future mining will be concentrated on mining ore from the underground areas of higher grade. By doing this they believe they will be milling ore with a higher gold content rather than running it at marginal levels as has been the case with open pit ore. The transitional period, in changing over from open pit to the higher yielding underground mining at the Chalice Gold Mine, is about complete and as a result Alacer is looking forward to 2013 giving the company a strong cash flow coming from increased gold production and lower capital expenditure. To obtain these objectives Alacer has taken the following steps:

ï The closing down of low grade open pit mining

ï Review of equipment needs at the Chalice underground mine

ï Minimising of operating and capital development costs

ï Reduced the workforce

Exploration in the area in 2013, that has been budgeted to cost the company $16 million in 2013, is expected to prove up resources that will extend the life of the mine beyond 2017, with gold production exceeding 150,000 ounces a year. Drilling at the Chalice mine is also expected to discover satellite ore deposits nearby.