VANCOUVER, BRITISH COLUMBIA--(Marketwire - Feb. 1, 2013) - Chesapeake Gold Corp. (News - Market indicators) ("Chesapeake") is pleased to release the positive results of a Pre-Feasibility Study ("PFS") on its 100% owned Metates gold silver project located in Durango State, Mexico. The NI 43-101 compliant PFS incorporates significant scope changes and updated engineering work as well as updated capital and operating cost estimates since the Preliminary Economic Assessment ("PEA") dated April 25, 2011. Both the PEA and the PFS were prepared by M3 Engineering & Technology of Tucson, Arizona ("M3") and other prominent consultants who have recent project development experience in Mexico. All costs are in US Dollars.

Highlights of the Preliminary Feasibility Study

• Proven and probable mineral reserves of 18.5 million ounces gold, 526 million ounces silver and 4.2 billion pounds of zinc
  
  
• Average annual production for years 2 through 7 of 845,000 ounces gold, 25.1 million ounces silver (1,309,000 ounces gold equivalent*) and 190 million pounds zinc, at an average gold equivalent cash cost of $410 per ounce, net of zinc credits
  
  
• 25 year mine life with average annual production of 659,000 ounces gold, 15.9 million ounces silver (954,000 ounces gold equivalent*) and 143 million pounds zinc, making it one of the largest gold and silver mines in the world, with an average life of mine ("LOM") gold equivalent cash cost of $489 per ounce, net of zinc credits
  
  
• Average annual net operating income of $976 million in operating years 2 through 7 with cumulative LOM pre-tax net operating income of $10.7 billion
  
  
• Initial capital cost of $4.36 billion including $631 million in contingency costs and excluding sustaining capital costs of $584 million
  
  
• At base case metal prices, pre-tax capital payback of 4.2 years and 5.1 years after-tax
  
  
• Net present value ("NPV") pre-tax of $3.90 billion at an 8% discount rate generating an IRR of 20.5%, and after-tax NPV of $2.36 billion and 16.2% IRR
  

*Gold equivalent ounces are defined as gold ounces plus silver ounces/54.0 based on base case metal prices

"The completion of the PFS is a major milestone in Chesapeake's development," said P. Randy Reifel, President of Chesapeake. "We are very pleased that the PFS confirms the Metates project hosts one of the world's largest undeveloped gold and silver reserves in a mining friendly jurisdiction. The PFS demonstrates the project has excellent economics while meeting the industry's highest environmental standards."

Mineral Reserves and Mining Schedule

The PFS uses as a basis an updated mineral resource estimate prepared by Independent Mining Consultants of Tucson, Arizona ("IMC") dated February 16, 2012. The IMC resource estimate assumed a gold price of $1,200/oz and $24/oz silver and a cut-off grade of .35 g/t gold equivalent ("AuEq"). The open pit mineral reserves were estimated within a detailed engineered pit design by using the measured and indicated resources only. As designed, the pit has overall slope angles from 37 to 46 degrees and a LOM waste/ore strip ratio of 1:1.

IMC developed an ore mining schedule which employed an elevated cut-off strategy in the early years (years 2- 7) which shortened the capital payback period and improved overall project economics. The above cut-off but lower than mill feed grade ore mined in the earlier years is placed in a low grade ore stockpile which is processed during the last six years of the mine life (years 20-25). The production schedule optimized mining both the intrusive and sediment hosted ore rock types based on crusher throughput so that the annualized feed rates to be processed ranged from 109,000 tpd to 138,000 tpd after a two year mine ramp up to full production. Table 1 below presents the mineral reserve for the Metates Project based on the mine and plant production schedules. Measured and indicated mineral resources in the production schedule are converted to proven and probable mineral reserves, respectively. The low grade stockpile is classified as probable mineral reserve regardless of the original classification of the in-situ resource. The mineral reserve amounts to 1.15 billion ore tonnes at 0.50 g/t gold, 14.2 g/t silver, and 0.17% zinc (including the low grade stockpile). Contained metal amounts to 18.5 million ounces of gold, 526 million ounces of silver and 4.2 billion pounds of zinc.

Development Overview

The PFS contemplates a conventional truck and shovel open pit mining operation with a nominal 120,000 tpd throughput. Crushed ore will be fed to a conventional SAG and ball mill circuit followed by a single stage flotation plant to produce a bulk sulfide concentrate. The comminution and flotation circuits are built as two separate lines each rated at a nominal 60,000 tpd rate to allow for ramp up (Phase 1) and to decrease operational risks. Tailings from the flotation concentration plant are dry filtered to remove water and then co-disposed with the waste rock in a dedicated storage facility. The sulphide concentrate is transported downhill via a 126 kilometer long slurry pipeline to the Ranchito site located 800 meters lower in elevation and southwest of Metates. The pipeline will follow an all-weather access road that will be constructed between the Metates and Ranchito sites. Ranchito is situated beside a major limestone resource and proximate to key mine infrastructure including power, water, transportation and labour.

At Ranchito, the sulphide concentrate is treated in a pressure oxidation plant with subsequent cyandiation and Merrill-Crowe recovery of gold and silver dore. High purity oxygen to feed the pressure oxidation plant will be manufactured on site in a dedicated plant owned and operated by a third party and provided under an "across the fence" arrangement. Acidic solutions from the pressure oxidation process will be neutralized with ground limestone and lime produced from an on-site quarry and then co-disposed with the cyanide leach tailings in an adjacent storage facility. Zinc will be recovered from the pressure oxidation solutions via solvent extraction/electrowinning (SX/EW) methods to produce SHG grade zinc ingots. Overall gold and silver recoveries from ore through dore production are estimated at 89% and 76%, respectively. Overall zinc recovery to high grade ingots is estimated at 85%. Table 2 below presents a summary of the operating metrics of processed grades, tonnes mined and metal production.

Payable gold and silver production in the first six years of full production (years 2-7) averages 845,000 ounces gold and 25.1 million ounces silver per year. The project will produce an average of 659,000 ounces of gold, 15.9 million ounces of silver and 143 million pounds of zinc annually over a 25 year life. Total cash cost per gold equivalent ounce for years 2-7 is $421 with LOM cash cost of $489, net of by-product credits.

Power Supply, Water and Closure

A positive development in the PFS is a change to a dedicated natural gas fired 520 MW capacity power plant owned and operated by an independent power provider. Trade-off studies indicate the power plant will be located northwest of the Ranchito site and adjacent to a newly constructed gas pipeline funded by the Mexican government. Power will be delivered to the project via existing power lines to a substation located 40 kilometers from the Ranchito site. Based on an average Q4 2012 natural gas price the delivered cost of electric power to the project is $0.0612 per kilowatt hour. About 40% of the delivered power cost is tied to the natural gas price. While the Mexican government has committed to the construction of the gas pipeline and the Company is confident an independent power provider will be willing to build the power plant, these developments are outside of the Company's control and there can be no assurance that either or both will be built, the failure of which could have a significant impact on the Metates project.

The natural topography of the Metates mine site facilitates an integrated waste management plan which will significantly reduce long term environmental risks, final reclamation and closure costs. The proposed waste rock and dewatered tailings storage design allows for concurrent LOM reclamation and reduces water demand by over 60% compared to conventional tailings facilities. The water conservation practices employed at both the Metates and Ranchito locations allow for the project to be generally self-sufficient using site surface water storage and locally sourced groundwater. After the pit has been mined, the tailings from the processed low grade ore stockpile will be backfilled and contribute to a sustainable, long term pit lake.

Capital Costs

The initial capital costs (including contingency) are estimated at $4.36 billion. The capital investment reflects outsourcing the dedicated oxygen plant and natural gas fired electric power plant. Scoping changes associated with the filtered integrated tailings storage, SX/EW plant and improved engineered modifications to the processing circuit account for about $600 million of the capital increase since the PEA. Initial production will commence at the nominal rate of 60,000 tpd during operating year 1 (Phase 1 initial capital) with additional capital being spent to increase production to the nominal 120,000 tpd rate in operating year 2 (Phase 2 initial capital). Table 3 below presents a summary of the capital costs.

All capital spent after year 1 (except for year 2 for mining equipment) is deemed to be sustaining capital and is estimated at $584 million. The capital costs include $631 million in overall contingency and $116 million in owner's cost. Working capital is estimated at 4 months of average operating expenses during year 1. The capital pricing for the PFS is current to Q4 2012.

Operating Costs

Mining costs were prepared on a year by year basis by IMC. The LOM mining costs per tonne moved average $1.33 per tonne at Metates, and $1.56 per tonne at the Ranchito limestone operation. The process costs are estimated to be $3.49 per tonne for the Metates operations and $6.34 per tonne for the Ranchito operations, with overall G&A and support costs estimated at $0.63 per tonne. The pressure oxidation circuit, including the oxygen plant, limestone and lime production, are the single largest area of operating costs for the project. Close proximity to a high quality limestone resource and relatively low cost electric power contribute significantly to the project's financial performance. Average LOM gold equivalent cash costs are estimated at $10.11 per tonne or $489 per ounce net of by-product revenue from zinc and copper production. A summary of the operating costs is shown in Table 4 below.

Financial Results

The PFS demonstrates strong project economics and high leverage to gold and silver prices. The financial results were developed for three different metal price assumptions including the base case, the United States Securities and Exchange Commission ("SEC") metal pricing guidance (LME three year historical rolling average prices) and spot prices. The SEC and spot prices are from December 31, 2012.

The financial analysis for the base case indicates a pre-tax NPV of $3.90 billion at a 8% discount rate, a 20.5% IRR and payback of 4.2 years. On an after-tax basis at 8% discount rate, the NPV is $2.36 billion with an 16.2% IRR and a payback of 5.1 years. The project is expected to generate $10.7 billion of LOM pre-tax net operating income. The financial results are presented in Table 5 below.

Opportunities and Next Steps

The PFS has incorporated a number of improvements and scoping changes that have materially improved the project's economics over the PEA. Going forward a number of additional opportunities have been identified that could further enhance the viability of the Metates project including:

• Further evaluation of electric power supply options including discussions with the CFE and independent power providers to secure long term natural gas supplies and electric power
• Evaluation of a staged development option where the capital to fund the expansion from the 60,000 tpd (Phase 1) to 120,000 tpd (Phase 2) ore processing rate is funded out of cash flow
• Assessment of alternative technologies for the production of high purity oxygen with potential savings in both capital and operating costs
• Optimization of the layout of site facilities at both the Metates and Ranchito sites to minimize capital costs and enhance operating efficiencies
• Appraise the opportunities for liquidfied natural gas to fuel the mine haulage and rolling fleet
• Continued improvements to water utilization and conservation and their full integration into a site wide water balance model stressing water supply options, water storage and transport

Chesapeake is sufficiently financed to advance the Metates project towards completion of a full feasibility study. Chesapeake plans to undertake additional engineering design and metallurgical studies to further de-risk the project. In addition, Chesapeake will move forward with early stage engagement of various stakeholders to secure development related agreements and permits with particular emphasis on infrastructure advancement.

Technical Report

A NI 43-101 Technical Report will be prepared by M3 and filed on SEDAR within 45 days following the date of this release. The Report will consist of a summary of the PFS. Mr. Doug Austin, P.E., Senior Vice President of M3 and Dr. Art Ibrado, QP Member, MMSA, Project Manager with M3 are qualified persons responsible for the scientific and technical information in this news release in accordance with NI43-101. Mr. Michael Hester, FAusIMM, Vice President of IMC, is the qualified person responsible for the reserve estimate and mine planning in this news release in accordance with NI43-101. Mr. Gary Parkison, CPG, Vice President Development of Chesapeake, is the qualified person who supervised the preparation of the technical information in this release. All of the above qualified persons have reviewed and approved the data contained in this release.

The PFS was prepared by several leading independent industry consultants including contribution by the following:

For more information on Chesapeake and its Metates Project, please visit our website at www.chesapeakegold.com.

CHESAPEAKE GOLD CORP

P. Randy Reifel, President

FORWARD LOOKING STATEMENTS

This news release contains "forward-looking statements" within the meaning of applicable Canadian securities legislation. Such forward-looking statements concern the Company's anticipated results and developments in the Company's operations in future periods, planned exploration and development of the Metates Project and related matters that may occur in the future. These statements relate to analyses and other information contained in the PEA that are based on expectations of future performance, including silver and gold production and the economic viability of the Metates Project.

Statements concerning reserves and resource estimates may also constitute forward-looking statements to the extent that they involve estimates of the mineralization that will be encountered if the property is developed and, in the case of mineral reserves, such statements reflect the conclusion based on certain assumptions that the mineral deposit can be economically exploited.

Forward-looking statements are subject to a variety of known and unknown risks, uncertainties and other factors which could cause actual events or results to differ from those expressed or implied by the forward-looking statements, including, without limitation, the following with respect to the results of the Metates Project PEA:

• the technical and financial viability of mining, flotation, pipeline operations, oxidation facilities, acid neutralization processing, and processing operations at Metates;
• the economic potential of the Metates mineral deposit including the existence and size of the mineral deposit at Metates;
• the productive mine life of the Metates project including timing and amount of estimated future production;
• access to surface land and water rights;
• environmental approvals, permit applications for road and mine construction and the development schedule for the project;
• ability to secure financing for mine construction and development on acceptable terms;
• potential increases in costs, timing and complexities of permitting, mine construction and development and ability to secure necessary infrastructure as a result of the remote location of the Metates Project and local landholder Ejido consultation requirements;
• planned mining operations and ore processing; assumptions regarding the anticipated construction of access roads, third party power supply and distribution network, gas pipeline and access to natural gas supplies, oxygen plant outsourcing;
• communications infrastructure and tailing dewatering and stacking facilities;
• annual mine production of ore and waste and waste/ore stripping ratios;
• estimated initial and ongoing mill throughput; the process and expectations for metal recovery over the life of the mine;
• estimated capital and operating costs;
• projected future metal prices and precious and base metal price fluctuations;
• risks related to fluctuations in the currency markets (particularly the Mexican peso, Canadian dollar and United States dollar);
• risks related to the inherently dangerous activity of mining, including conditions or events beyond our control, and operating or technical difficulties in mineral exploration, development and mining activities;
• risks related to reserves and mineral resource figures being estimates based on interpretations and assumptions which may result in less mineral production under actual conditions than is currently estimated and to diminishing quantities or grades of mineral reserves as properties are mined; and
• risks related to all of the Company's properties being located in Mexico, including political, economic, social and regulatory risks.

This list is not exhaustive of the factors that may affect our forward-looking statements. Should one or more of these risks and uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in the forward-looking statements. The Company's forward-looking statements are based on beliefs, expectations and opinions of management on the date the statements are made. For the reasons set forth above, investors should not place undue reliance on forward-looking statements.