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Chieftain Prepares to Publish Feasibility Study in January 2013

TORONTO, ONTARIO -- (Marketwire) -- 12/21/12 -- Chieftain Metals Inc. ("Chieftain" or the "Company") (TSX: CFB) is pleased to announce its preparation to publish its full feasibility study results completed by JDS Energy and Mining Inc. in January 2013. As part of this process, it has revised the payback period of the feasibility study on a pre-tax and post-tax basis to 4.3 years (instead of 3.9 and 4.4 years respectively), the post-tax IRR to 14.7% (instead of 14.9%). Accordingly, the post-tax NPV 8% is $138.7 million (instead of $146.0 million). The pre-tax NPV8% and pre-tax IRR remain unchanged at $192.7 million and 16.5% respectively.

After publication of the feasibility study, the Company will continue its optimization work in the areas of improving its copper concentrates, examining further infrastructure and materials handling improvements, resource optimization and exploration potential to its Tulsequah Chief project. The Company expects to embark on partner and project finance discussions early in the New Year to arrange construction financing.

Gordon Doerksen of JDS Energy & Mining Inc., a Qualified Person under NI 43-101, has reviewed and approved the technical content of this news release.

The news release published on December 12, 2012, at 8:15 a.m. EST entitled "Chieftain Announces Robust Tulsequah Chief Feasibility Study Results" is shown below in its entirety reflecting the above-mentioned changes:

Chieftain Announces Robust Tulsequah Chief Feasibility Study Results

TORONTO, ONTARIO--(Marketwire - Dec. 12, 2012) - Chieftain Metals Inc. ("Chieftain" or the "Company") (TSX:CFB) is pleased to announce that JDS Energy and Mining Inc. has led the completion of an independent, NI 43-101 compliant Feasibility Study on the high-grade Tulsequah Chief polymetallic deposit located in north-western British Columbia.

Highlights of the Tulsequah Chief Feasibility (Table 1)


--  The study is based on a 2,000 tonne per day underground mining operation
    with a 9-year mine life. 
--  Pre-production capital costs are estimated to total $439.5 million, with
    an additional $64.0 million in sustaining capital over the life-of-mine
    and closure costs net of salvage value of $6.2 million (all amounts in
    Canadian dollars unless stated otherwise). 
--  Operating costs are estimated to total $125.96/tonne. 
--  Price deck for metals and foreign exchange is based on the three year
    trailing average prices. 
--  The study yields a pre-tax NPV8% of $192.7 million and an IRR of 16.5%
    and post-tax NPV8% of $138.7 million and an IRR of 14.7%. 

Victor Wyprysky, President and CEO commented: "We are pleased to deliver a feasibility study demonstrating robust economics for Tulsequah. The NPV8% of $192.7 million represents a pre-tax Net Asset Value of approximately $13.24 per share and average annual EBITDA at full production of $120.4 million or $8.28 per share based on the current outstanding shares. This study will enable Chieftain to finalize project financing and plan construction start-up. The project will bring significant benefits for the Taku River First Nation, the Atlin community and British Columbia, and Chieftain is fully committed to continue to build strong relationships with the community while developing the project in a socially and environmentally responsible manner within the guidelines of the Atlin-Taku Land Use Plan."


----------------------------------------------------------------------------
Table 1.Highlights of the Tulsequah Chief Feasibility Study                 
                                                                            
----------------------------------------------------------------------------
                                            Payable Metal   Metal Pricing(1)
                                     ---------------------------------------
Probable Reserve              6.45 Mt                                       
                                                                            
                       Au    2.30 g/t          403.9 k oz       US$ 1,455/oz
                       Ag   81.38 g/t       11,971.8 k oz       US$ 28.00/oz
                       Zn       5.59%         601.5 M lbs        US$ 0.97/lb
                       Cu       1.12%         135.5 M lbs        US$ 3.66/lb
                       Pb       1.04%          93.0 M lbs        US$ 1.01/lb
            Exchange Rate                                       1.01 CDN:USD
----------------------------------------------------------------------------
Mining rate              2,000 t/d   NSR                          $ 265.71/t
Mine life                9 years                                            
Initial Capex            $ 439.5 M   Operating cost                         
Sustaining Capex         $ 64.0 M     - Site                       $ 98.13/t
Closure Costs net of                                                        
Salvage Value            $ 6.2 M      - Off-site                   $ 27.83/t
                                                    Total         $ 125.96/t
----------------------------------------------------------------------------
                                                  Pre-Tax           Post-Tax
----------------------------------------------------------------------------
Undiscounted Net Cash                                                       
Flow                                            $ 570.7 M          $ 451.1 M
NPV (8%)                                        $ 192.7 M          $ 138.7 M
IRR                                                 16.5%              14.7%
Payback period                                  4.3 years          4.3 years
----------------------------------------------------------------------------
1. Three-year trailing average prices in US dollars.                        

Resources and Reserves

The mineral resource estimate (Table 2) was updated and classified using logic consistent with the Canadian Institute of Mining and Metallurgy ("CIM") definitions referred to in National Instrument 43-101 into Measured, Indicated, and Inferred Mineral Resources. The mineral resource estimate was developed using industry-accepted methods with GEMS software in blocks sized 5 m x 5 m x 4 m. For the purpose of resource estimation, all assay intervals within the mineralized units were composited to two metres and grades were capped prior to estimation. Zinc was capped at 30%, lead and copper at 10%, gold at 25 g/t and silver at 600 g/t for the resource estimate.


Table 2. Tulsequah Chief Mineral Resources (Inclusive of Mineral Reserves) 
 as of March 15, 2012                                                      
                                                                           
---------------------------------------------------------------------------
Category           Tonnes    Cu (%)    Pb (%)    Zn (%)  Au (g/t)  Ag (g/t)
---------------------------------------------------------------------------
Indicated          6.75Mt      1.19      1.10      5.89      2.40        85
---------------------------------------------------------------------------
Inferred           0.20Mt      0.67      0.76      4.02      1.81        62
---------------------------------------------------------------------------

1.  $100/tonne Equivalent cut-off used 
2.  Cut-off grades are based on a price of US$1,275 per ounce of gold, US$21
    per ounce for silver, US$1.10 per pound for zinc and lead and US$3.25
    for copper and recoveries of 81.8% for gold, 79.5% for silver, 87.8% for
    copper, 44.5% for lead and 88% for zinc. 
3.  Qualified Person for resource estimate is Gilles Arseneau, P.Geo. of SRK
    Consulting (Canada) Inc. 
4.  The Resources are inclusive of the Mineral Reserves stated in Table 3. 

The reserve estimate is summarized in Table 3 below. The probable reserve totals 6.45 Mt of minable material.

Table 3. Tulsequah Chief Mineral Reserves


---------------------------------------------------------------------------
Category           Tonnes    Cu (%)    Pb (%)    Zn (%)  Au (g/t)  Ag (g/t)
---------------------------------------------------------------------------
Probable           6.45Mt      1.12      1.04      5.59      2.30     81.38
---------------------------------------------------------------------------

1.  Mineral reserves are reported based on underground mining above a
    US$125/tonne Equivalent cut-off. Cut-off grades are based on a price of
    US$1,350 per ounce of gold, US$22 per ounce for silver, US$1.10 per
    pound for zinc and lead and US$3.10 for copper and recoveries of 81.8%
    for gold, 79.5% for silver, 87.8% for copper, 44.5% for lead and 88% for
    zinc. 

The Underground Mine

A new underground mine, adjacent to and beneath old workings that were previously operated by Cominco Ltd. from 1951-57, will be developed through the existing 5200 and 5400 Level adits and will be used as the primary access to the mine for all personnel, mine services, equipment and supplies.

The new mine will operate as a ramp-entry truck haulage operation via a spiral ramp that will be developed to a vertical depth of 750 meters with mining levels located at 30-meter vertical intervals. Sub-level stoping will be the primary mining method with a minor amount of mechanized cut-and-fill stoping. Paste backfill and unconsolidated loose waste rock will be used for replacement of mined voids for both methods. Where backfill walls will be exposed by future adjacent mining, additional cement will be added to the paste backfill for strength.

Metallurgy

A process plant was designed for the Tulsequah Chief project to process massive sulphide mineralization at a rate of 2000 t/d. The process facility will consist of a primary crushing plant, conveyor corridors; mill feed storage bin, grinding and flotation plant, effluent treatment plant and backfill plant. The process plant will operate two shifts per day and 365 days per year with an overall availability of 92%. The process plant will produce copper, lead and zinc concentrates and gold-silver dore as outlined in the following table predicted metallurgical response.

Table 4. Predicted Metallurgical Response


----------------------------------------------------------------------------
Product       Wt (t)            Assays                    Recoveries %      
                    --------------------------------------------------------
                     Cu % Pb % Zn % Ag g/t  Au g/t    Cu   Pb   Zn   Ag   Au
----------------------------------------------------------------------------
Copper Conc      5.3 21.0  2.7  7.6 1217.5    20.8  89.0 11.8  6.0 75.0 44.0
----------------------------------------------------------------------------
Lead Conc        1.3  1.0 60.0  8.4  586.4     7.6   0.8 66.2  1.6  9.0  4.0
----------------------------------------------------------------------------
Zinc Conc        9.6  0.7  0.8 62.0   69.7     0.8   5.5  6.8 89.0  7.8  3.0
----------------------------------------------------------------------------
Pyrite Conc       28  0.1  0.3  0.4   19.2     0.5   1.9  6.8  1.7  6.1  5.0
----------------------------------------------------------------------------
Tailings        55.7  0.1  0.2  0.2    2.4     0.1   2.8  8.4  1.7  1.6  2.0
----------------------------------------------------------------------------
Feed             100  1.3  1.2  6.7     86     2.5   100  100  100  100  100
----------------------------------------------------------------------------
                                                                            
----------------------------------------------------------------------------
Dore Kg/100t                                                                
 feed          0.155                    30%     70%                 0.5 42.0
----------------------------------------------------------------------------

Access and Transportation

A new 128 kilometer long, Forestry approved 5m wide road will be constructed from the end of the Warm Bay road, south of Atlin, BC, to the Tulsequah Chief Mine site. The concentrates produced during operations are anticipated to be trucked to the Skagway terminal facility where improvements to the facility are planned to handle the storage and transfer of Chieftain's concentrates. Supplies will be transported to the mine by road utilizing the backhaul portion of the trip.

Infrastructure

All surface buildings will be located in close proximity to the mine, including the mineral process building, a 210-person camp and kitchen/dining facility, a two-story administration/mine dry building, which includes the ambulance building, an LNG/diesel-generated power plant, and the maintenance/warehouse facility for surface equipment.

The mine will operate on varying rotating schedules including four days on/three days off, two weeks on/two weeks off, and two weeks on/one week off. The schedules reflect the various work schedules required to cover the tasks on site. A 1,050 m long airstrip has been constructed approximately 2 km north of the mine near Shazah Creek.

A 3.0 Mt capacity tailings facility is designed and will be constructed approximately 5 km north of the mine in the valley of Shazah Creek. De-pyritized tailings will be transported in the form of a dense slurry by pipe.

Capital Costs

The initial capital requirement for the Project is estimated to be $439.5 M, as detailed in Table 5.

Table 5. Pre-production Capital Costs


------------------------------------------------------------
Items                                          Estimate (M$)
------------------------------------------------------------
Site Development                                         7.4
Underground Mining                                      38.5
Underground Process Facilities                          11.7
Limestone Quarry                                         0.2
Processing Plant                                        63.1
Tailings & Waste Rock Management                        15.5
On-Site Infrastructure                                  61.5
Mine Access Road (directs)                              54.2
Project Indirects                                       91.6
Engineering & EPCM                                      31.4
Owner's Costs                                           17.3
------------------------------------------------------------
Subtotal Pre-Production Capital                        392.4
------------------------------------------------------------
Contingency (12.0%)                                     47.1
------------------------------------------------------------
Total Pre-Production Capital                           439.5
------------------------------------------------------------

The Project has a total sustaining capital requirement of $64.0 million. Sustaining capital is required for extension of the main ramp to depth, mobile equipment rebuilds and replacements, and capital improvements.

Reclamation/Closure & Salvage Costs

Total reclamation/closure and salvage costs have been estimated as follows:

Table 6. Reclamation/Closure & Salvage Costs


-----------------------------------
Items                            M$
-----------------------------------
Reclamation/Closure            13.8
Salvage Value                 (7.6)
-----------------------------------

Operating Costs

Total operating costs for the Project have been estimated as follows:


Table 7. Operating Costs                     
                                             
---------------------------------------------
Items                                 $/tonne
---------------------------------------------
Mining                                  30.06
Processing                              23.02
Power                                   22.58
G&A                                     22.47
Transportation (Conc. and supplies)     27.83
---------------------------------------------
Total                                  125.96
---------------------------------------------

This cost represents the Life of Mine Cash Cost of the Project, from years 1 - 9 inclusive.

Financial Analysis and Sensitivities

Using the three year trailing average commodity prices, the study yields a pre-tax NPV8% of $192.7 million and an IRR of 16.5% with a payback period of 4.3 years and a post-tax NPV8% of $138.7 million and an IRR of 14.7% with a payback period of 4.3 years.

Sensitivity tables for changes in capital costs, operating costs, metal prices, and discount rates are shown below. The Project's NPV is most sensitive to grade, metal prices, followed by operating costs, and least sensitive to capital costs.


Table 8. Project Economics Sensitivity                          
                                                                
----------------------------------------------------------------
                Pre-tax NPV (8.0%) ($M) Average Full Production 
                                            Year EBITDA ($M)    
                ------------------------------------------------
                    -15%      0%     15%    -15%      0%     15%
----------------------------------------------------------------
Capital Cost      260.0   192.7   125.4   120.4   120.4   120.4 
Operating Cost    249.5   192.7   135.9   131.2   120.4   109.7 
Metal Prices       22.1   192.7   359.8    86.9   120.4   153.3 
----------------------------------------------------------------

Table 9. Project NPV Sensitivity to Discount Rate


------------------------------------------------------
Discount Rate     Pre-tax NPV ($M)  After-tax NPV ($M)
------------------------------------------------------
7.0%                         226.3               166.8
7.5%                         209.1               152.4
8.0%                         192.7               138.7
------------------------------------------------------

Project Schedule

Project construction is expected to commence in the Spring of 2013, subject to project financing. Site earthworks are expected to begin in Q3 2013, mill and site construction in Q4 2014, and tailings construction in Q1 2015, with commissioning and production beginning in Q4 2015.

Technical Report

A NI 43-101 Technical Report will be filed within 45 days on SEDAR and will be available at that time on the corporate website.

Qualified Persons

The technical content of this release was reviewed by Keith Boyle, P. Eng., Chief Operating Officer of Chieftain Metals Inc. and qualified person under NI 43-101.

The Feasibility Study was conducted under the overall review of Gordon Doerksen, P. Eng. of JDS Energy and Mining Inc. of Vancouver, British Columbia, and serves as Principal Author of the Technical Report.

The following Independent Qualified Persons have assumed authorship of this report:


Gordon Doerksen     P. Eng., Project Director, JDS Energy and Mining Inc.   
Gilles Arseneau     Ph.D., P. Geo. Associate Consultant, SRK Consulting     
                    (Canada) Inc.                                           
Robert Marsland     P. Eng., Senior Environmental Engineer, Marsland        
                    Environmental Associates                                
David West          P. Eng., David West Consulting                          
Harvey McLeod       P. Eng., P.Geo., Klohn Crippen Berger                   
Kenneth Sangster    C.Eng., Ken Sangster and Associates Ltd.                

About Chieftain Metals Inc.:

Chieftain Metals Inc.'s principal business is the acquisition, exploration and development of mineral properties. Since incorporation, the Company's business has focused entirely on the acquisition, and thereafter the development, of the Tulsequah Chief Polymetallic Project, in north-western British Columbia, Canada. Chieftain's Property consists of 39 mineral claims and Crown-grants covering approximately 14,089 hectares and covers two previously producing mines. For more information on Tulsequah and related projects, please refer to the Company's NI 43-101 compliant technical reports, "Tulsequah Chief Deposit, Tulsequah Chief Property, Northern British Columbia" and "Big Bull Project, Tulsequah Chief Property, Technical Report, Northern British Columbia", each dated as of November 8, 2010 and available under the Company's profile on SEDAR (www.sedar.com).

Forward-Looking Information:

This press release includes certain "forward-looking statements" within the meaning of the Ontario Securities Act or other laws or regulations. All statements, other than statements of historical fact, included herein, including without limitation, statements regarding potential mineralization, mineral resources or reserves, exploration results, future plans and objectives of Chieftain Metals Inc. are forward-looking statements that involve risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements.

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