Chesapeake Gold: An Emerging Mid-Tier Gold Producer in Mexico

• Chesapeake Gold has promising early stage drill results at the Lucy gold deposit, with high grade intercepts up to 19 g/t over 500m strike length. More drilling is planned to determine size and continuity.
• Metallurgical test work continues at the massive Metates project, with new chemical scheme showing improved oxidation rates. Pre-feasibility study planned for 2023.
• Lucy provides a potential faster route to production and cash flow compared to Metates, which has scale but technical challenges.Heap leach or CIL options possible depending on grade.
• With $20M cash, Chesapeake is fully funded for ongoing work at both Lucy and Metates. Drilling at Lucy can be done cheaply and year-round.
• Next updates expected in Dec on Metates met tests, and late 2022/early 2023 on further Lucy drilling. Goal is to advance both projects in parallel to create shareholder value.

About Chesapeake Gold

Chesapeake Gold Corp. (TSX:CKG) is a Canadian precious metals exploration and development company focused on discovering and developing large gold deposits in North and Central America. The company's primary asset is the Metates project located in Durango State, Mexico. Metates hosts one of the largest undeveloped gold, silver and zinc reserves in the world with over 18 million ounces of gold equivalent. The massive deposit has gone through extensive metallurgical testing to find the optimal processing method. Chesapeake is also advancing its new high-grade Lucy gold discovery located in Sonora State, Mexico. With a strong cash position of $20 million, Chesapeake is funded to aggressively explore its portfolio of Mexican projects.

Interview with Alan Pangbourne, President & CEO of Chesapeake Gold Corp.

Advancing the Flagship Metates Project

Metates is one of the largest undeveloped gold deposits in the world with proven and probable reserves of over 18 million ounces of gold equivalent. The project has faced metallurgical challenges given the disseminated low grade nature of the deposit. Chesapeake has developed a new metallurgical process to economically treat the complex Metates ores. Recent test work on optimized chemical schemes has shown improved gold recoveries and faster oxidation rates. The next steps are to complete extended column leach tests and progress into a Pre-Feasibility Study in 2023. While early stage, Metates has the potential to be a multi-decade operation producing over 500,000 ounces of gold equivalent per year.

Exciting New Discovery at Lucy Showing Bonanza Gold Grades

Chesapeake recently announced exceptional high-grade drill results from its new Lucy gold discovery located in Sonora State, Mexico. Fourteen drill holes have defined a mineralized zone 500 meters long, up to 70 meters wide and open in all directions. Impressive near surface oxide gold intercepts include 24 meters of 6 g/t gold, 18 meters of 4 g/t gold and 1.5 meters of 19 g/t gold. These bonanza grades are a company-maker. Lucy appears to be a large epithermal system with grades averaging over 1 g/t gold. Further step-out drilling is planned to expand Lucy along strike and at depth. Due to its superior grades, Lucy could be fast-tracked into production in 12-18 months via heap leaching to generate early cash flow for Chesapeake.

Two Paths to Value Creation

Chesapeake now has two avenues to create substantial value for shareholders. Metates is a world-class gold project but requires more time and money to reach production. In contrast, Lucy could be quickly advanced given its exceptional high grades in the oxide zone. While additional drilling is needed, Lucy has the potential to be a satellite deposit developed years ahead of Metates. This near-term production and cash flow would nicely complement the longer-term Metates development timeline. Chesapeake offers investors exposure to a large gold deposit in Metates plus a new discovery with exploration upside. The company is strongly positioned with a healthy cash balance to systematically explore and de-risk both projects.

Investment Thesis for Chesapeake Gold

Chesapeake Gold represents an intriguing investment opportunity for gold investors:

• World-class asset in Metates with over 18 million ounces of gold equivalent
• Innovative metallurgical solution to unlock value at Metates
• New high-grade gold discovery at Lucy showing bonanza grades
• Clear path to near-term cash flow from Lucy to fund Metates
• Strong cash position with over $20 million to support aggressive exploration
• Proven management team with track record of success in Mexico
• Significant upside potential as both Metates and Lucy are further derisked

In summary, Chesapeake Gold provides investors with exposure to substantial gold resources in a premier mining jurisdiction. The company has multiple projects, an improved technical process, new discoveries, cash in the treasury and a solid team advancing systematic exploration. As Metates and Lucy progress towards development, Chesapeake represents an attractive speculation on discovering and building the next major gold mining company.

Conclusion

For investors seeking leverage to rising gold prices, Chesapeake Gold offers an intriguing opportunity. The upside potential is significant given the large gold resources and exploration upside at Metates and Lucy. While still early stage, Chesapeake has a clear strategy to systematically explore and develop these deposits into profitable mines. The stock appears undervalued based on the expansive gold resources defined to date. As exploration continues, investors can expect a re-rating as these quality assets are de-risked and advanced closer to production. Chesapeake has the projects, technology, discovery-success and financial position to emerge as Mexico's next mid-tier gold producer.

The recent bonanza grades at Lucy provide a glimpse of the tremendous upside for early investors. Chesapeake Gold is worthy of consideration for speculative investors seeking substantial leverage to a rising gold price.