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CHESAPEAKE GOLD CORP LIVE @ PDAC - VIDEO LINK



For the video link click below: http://www.resourceintelligence.net/chesapeake-gold-livepdac/16819
Regards, Anna Tse, Executive Assistant Chesapeake Gold Corp.

Suite 201-1512 Yew Street Vancouver, BC V6K 3E4 Ph: 604-731-1094 Fax: 604-731-0209
Chesapeake Gold Live @ PDAC
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April 20, 2011 .

1:05 pm .

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Resource Intelligence Speaks with Chesapeake Golds Gary Parkison
See the companys profile HERE , including resource calculators, charts, news and more. RI: Your Metates project is getting a lot of investor interest, this is a huge project and I think much bigger than most investors could possibly realize.

In production this would be the fifth biggest gold producer and fifth biggest silver producer in the world.

Youve been on this project since it was first drilled, before it was Chesapeakes, havent you? GP: I first came on the project in 1992.

At that time Cambior acquired the project and I was a project manager advancing the project to prefeasibility study stage, which was finalized in 1997. Flash Flash Player 9 or higher is required to view the chart Click here to download Flash Player now View the full CKG chart at Wikinvest RI: We look at you there since the get-go, we look at Randy Reifel the CEO of the company and Randys last project sold for close to $400 million and he has done that on multiple occasions.

I guess what youre looking to do is something really huge here that could be vended off and show massive upside to investors? GP: Correct.

That is exactly right, Randy has a proven track record in that sense and this would be his third project that he would basically advance for sale and this is by far the biggest project that hes ever undertaken. RI: How big is it? GP: It is clearly one of the largest gold and silver resources that is still undeveloped left the world.

Total measured and indicated gold is about 17 million ounces and about 463 million ounces of silver.

We add in the inferred and convert everything to gold equivalent resource, were talking somewhere around 28 million ounces of gold equivalent. RI: Randy mentioned earlier that there is significant potential for upside here with possibly 20 percent growth in the resource. GP: Twenty percent might not sound like a whole lot to most groups but you have to realize that we are starting out at a very high level so were talking about adding another 6 million ounces of gold. RI: Weve talked a bit about the size, how does that translate into cash flows? GP: The cash flow for the Metates project would be substantial.

Right now we are looking at upping the actual production rate from 90,000 tonne a day, which was defined last year in the PEA, up to 120,000 tonnes a day.

At 120,000 tonnes per day we would be putting out in terms of gold equivalent around 1.15 million ounces per year for 20 years on average.

That net cash flow comes in at around $600 million per year on average. RI: It can put out a lot of cash but its going to cost a lot to start it off on the capital side.

What would a Metates mine cost? GP: The basis for the PEA which came out last year was a 90,000 tonne a day rate and with that the capital cost was about $3.2 billion.

What we have done more recently is evaluate with increasing the production rate to 120,000 tonnes per day and at the same time outsourcing two major capital costs components.

That would be the dedicated power plant that allows us to get very low electric power cost and an oxygen plant.

We havent talked much about the metallurgy yet but an oxygen plant is a big component of a pressure oxidation plant which is really key for making the Metates ore body work.

If we outsource those two components were basically back where we started at about $3.2 billion capital costs. RI: What I like about what you have been able to do with this project and what perhaps the previous operators hadnt considered is that you are able to use the landscape, which in some cases people may have thought of as an impediment, to your advantage.

Gravity, in terms of piping the slurry down to more suitable land below and using the valleys in there for your tailings and so on.

How far does that go to improving the economics of the project? GP: It was certainly a significant breakthrough for us when we redesigned the processing flow sheet to take advantage of the natural topography.

The biggest breakthrough there was probably the identification of a large limestone resource some distance off to the west and downhill from the mine site.

How the project is configured now is that we have the Metates mine site, the tailings and the waste dumps all sited there, as well as natural topographic drainage there, but as part of the processing we need to have access to a large limestone resource and we located one of those resources downstream about 100 kilometers away.

We have a concentrate pipeline that basically takes the ground material from the mine site downstream and downhill to this more suitable facility where the limestone is and the rest of the processing will occur. RI: The limestone is used to neutralize the acid, is that correct? GP: Yes.

The acid that comes off the pressure oxidation step which is the key to unlocking the value of the gold is self. RI: How important is that? What you end up with are cash costs of about $350 to $360 an ounce including your zinc credits and you have a huge zinc resource tied in here as well. GP: Correct.

We dont really talk too much about the zinc but its there and its basically recoverable at very low cost and it gives us a savings or credit on our cash costs for gold and silver of about $50 an ounce.

We actually think we could improve on that with some work were undertaking now. RI: So youve got about 20 million ounces of gold and about 525 million ounces of silver and about 3 billion plus lbs of zinc.

Whats next, what milestones does Chesapeake have to achieve to show investors that this is going to become a mine? GP: We are preparing an updated PEA now and we will probably be releasing the results of that in the next day or two.

That basically will flush out this 120,000 tonne a day case, and the impact of outsourcing some of those capital costs that we talked about.

Going forward, we started a drilling program there last week with hopes to do a resource expansion but also to convert inferred tonnes to indicated and that way we can take advantage of the entire resource base as we move forward to a preliminary feasibility study, which is slated for completion later on this year around November or December. Well be de-risking the project along the way, which is a critical area for us.

Well be doing more extensive pressure oxidation test work, more flotation test work and generally more metallurgical testing as well as drilling and re-engineering a few aspects in an attempt to continue to lower our operating costs as well as the capital costs.



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