Is the Chalice Gold Mines Share Price Hype Justified? (ASX:CHN)
Junior explorer, Chalice Gold Mines Ltd [ASX:CHN] has been on a tear in a choppy market.
The CHN share price is rising again today, jumping 8.86% to open trading this morning. Shares are up 4.64% to $1.24 at time of writing.
The Chalice share price has increased almost 10-fold since this time last year, recording a one-year return of 945%.
Share price action for the explorer has been relatively flat since 2013.
Even discoveries at CHN’s key Pyramid Hill Gold Project did little to move its share price northwards.
The explorer’s share price only began its meteoric rise when it emerged from a trading halt at the end of March, after it released drilling results at its Julimar Project in WA.
Since this time, the share price has tacked on more than 680%.
So, is this hype justified?
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It’s not gold in Chalice’s mine
The share price first spiked 135% thanks to a high-grade nickel-copper-palladium discovery with the first-ever drill hole into the Julimar project.
The project had first been acquired back in 2018 as part of Chalice’s global search for high-potential nickel sulphide exploration opportunities.
Their second drill hole had no such luck.
Results came back having intersected no significant mineralisation.
New drilling efforts in April focused around the first discovery yielded better results, confirming significant nickel-palladium mineralisation.
Two new holes have been drilled since, with the latest announced this morning.
However, the market reaction to these results has been softer than previous results.
The third hole, which is in progress at a depth of 489 metres, intersected broad intervals of sulphide mineralisation based on visual logging.
Meaning the level of mineralisation has not yet been confirmed.
This doesn’t rule out better results if they go deeper, perhaps.
Initial results located mineralisation at much shallower depths, so it will be interesting to see what size resource we are looking at eventually.
Julimar discovery no bull?
Perhaps adding to some investor optimism, Anson Resources Ltd [ASX:ASN] announced yesterday it would acquire the Bull Nickel-Copper-PGE (platinum group elements) Project.
ASN’s new project is located 12 kilometres southwest along strike of the Julimar Project.
Anson’s entry into the region marks growing interest in the area, which has not been previously explored for nickel-copper-PGE.
CHN currently holds about $18.7 million in cash so they have a sizeable war chest to continue drilling.
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