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Chesapeake Reports PFS Status on Mexico Metates Gold-Silver Project

Chesapeake Gold Corp. ("Chesapeake") wishes to report on the current status of the pre-feasibility study ("PFS") on its 100% owned Metates project located in Durango State, Mexico. The Metates project is one of the largest undeveloped gold-silver projects in the Americas.

The Metates gold-silver project has forecast annual production of 759,000 ounces of gold and 19,959,000 ounces of silver over a 19 year mine life based on the Preliminary Economic Assessment ("PEA") released by M3 Engineering & Technology ("M3") in March 2011. The PFS that is near completion will be based on the same 120,000 tonnes per day processing rate but incorporate optimized processing circuits and site layouts as well as lower energy costs.

During the past six months a number of studies critically important to the PFS have been undertaken by several industry-leading consultants which have resulted in positive developments with respect to water sourcing and management, electric power, mine reclamation and closure. Currently, M3 is integrating the results of these studies with their own work which includes finalizing the capital and operating cost inputs into the project economic model.

In late November the Mexican government completed the award process for the various segments of the new 1,271 kilometer natural gas pipeline to be constructed down the west coast. Sempra Energy and TransCanada Pipeline will construct the pipeline which is slated to start mid-2013 with targeted completion of the segment near the Ranchito processing site during 2016. As a result, Chesapeake's energy consultants have been able to define the capacity, configuration and optimum location for the dedicated gas fired power plant to deliver the lowest, long term electric power cost to the Metates project. Compared to the coal-fired power plant assumed in the PEA, the gas power plant will offer significantly lower power costs while improving environmental management. The ability to utilize natural gas will also provide flexibility for future operational enhancements as well as recognizing that over 35% of the project's operating costs are directly attributed to power.

During the past few weeks, Chesapeake's consultants completed the optimization of the oxygen purity requirements for the autoclave circuit together with the related power demand and layout for the dedicated oxygen plant. At the Ranchito site the design of the co-disposal facility to store the cyanide leach tailings and neutralization products has been finalized to achieve maximum water recovery while minimizing the facility footprint and potential geo-hazard risks. Tailings filtration along with other innovative water management measures adopted at both sites, now result in an overall reduction of approximately 60% in the project's water consumption as compared to the conventional tailings management practices envisioned in the PEA. Furthermore, the integrated waste management practices to be incorporated into the PFS will allow for concurrent reclamation and the development of sustainable closure scenarios that significantly reduce both short-term and long-term environmental risk.

Mr. Randy Reifel, President of Chesapeake said, "While it is unfortunate that the results of the PFS will not be available this year, the delay has resulted in significant and fundamental improvements to the PFS. We are pleased with the technical work that has contributed to such a high quality study in terms of responsible development and mining best practices. We are confident that the results of the PFS to be released in January will uniquely position the large scale Metates project as one of the most significant gold-silver-zinc producers in a stable political jurisdiction and with superior economic returns."

Currently, Chesapeake has $44 million in cash and marketable securities.

Gary Parkison, CPG, Chesapeake Vice President Development and a Qualified Person as defined by NI 43-101, has reviewed and approved the technical information contained in this release.

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