Chalice Mining is Cashed up — Will it Follow a Gold Price Rebound?

Chalice Mining is Cashed up — Will it Follow a Gold Price Rebound?

Chalice Mining Ltd [ASX:CHN] ended 2020 with a bang, securing $100 million via an institutional share placement.

With that pile of cash, the gold explorer is looking to accelerate exploration at its flagship Julimar nickel-copper-platinum group element project in WA.

challice mining share price

Source: TradingView

The CHN share price has been of the best performers on the ASX over the past 12 months, making a return of 1,610%.

With plenty of room left to grow its Julimar project, will we see similar growth in 2021?

Investors can’t get enough of Chalice Mining

Around the same time CHN completed its $100 million institutional share placement, the explorer also announced a $10 million share purchase plan (SPP) for its eligible shareholders.

On 15 January, CHN amended that figure to $15 million, citing a significant demand for the company’s shares, having received over 2,300 applications.

Those applications had a total value of approximately $47 million at the issue price of $3.75 per share.

Certainly, a nice vote of confidence for CHN.

So, could CHN continue on a similar trajectory this year?

Last year, CHN said we can expect to see a maiden resource estimate around mid-2021.

And with its big pile of cash, CHN is fully funded to continue its six-rig resource definition drill program and reconnaissance exploration activities at Julimar.

REVEALED: What’s Next for Aussie Gold Stock Prices? Learn More Here.

At the beginning of the month, CHN secured access to major new targets at the project to the north of the world-class Gonneville discovery.

chalice gold site map

Source: Chalice Mining

Meaning there is now a lot of potential to significantly expand the footprint of the known Julimar mineralisation.

So, what does the price of gold mean for CHN’s share price?

In my books, the CHN share price is somewhat insulated from the gold price, with gold no longer the company’s direct focus.

Although there is gold present at Julimar, it isn’t the dominant element.

With the impressive rise in nickel and copper prices, thanks to demand from future tech, I anticipate that the gradings of these two minerals will have a larger impact on the share price relative to gold.

What does 2021 have in store for gold?

Right now, it’s difficult to tell how long the volatility in the gold price will remain.

However, our gold expert Shae Russell has painted a positive outlook for the yellow metal in 2021.

Though she warns it must weather the storm for a bit longer, the worst looks to be over.

Meaning the outlook for Aussie gold stocks could be similar to the stellar run they had last year. In her latest report, Shae breaks down what Australia becoming the new gold ‘epicentre’ means for gold and your Aussie gold stocks. Click here to download the free report.

Kind regards,

Lachlann Tierney,

For The Daily Reckoning Australia