Is the Chalice Gold Mines Share Price Hype Over? (ASX:CHN)

Is the Chalice Gold Mines Share Price Hype Over? (ASX:CHN)

Last week we explored the hype around the Chalice Gold Mines Ltd [ASX:CHN] share price and its meteoric rise.

Thanks to some interesting results at its Julimar Project in a relatively unexplored area in Western Australia, the CHN share price was up nearly 1,000%.

CHN has been intensively drilling after significant finds of high-grade nickel-copper-palladium mineralisation.

The junior explorer released further results from their drilling program this morning, further expanding the platinum-group elements (PGE) system at Julimar.

Shareholders might have been expecting more it appears.

Since trade began this morning, the Chalice share price has sunk 5.20% to trade at $1.185 per share.

CHN (blue) and AUD gold price (orange) over the past 12 months

Chalice Gold Mines - ASX CHN Share Price Chart


CHN results a letdown?

Despite the slump in share price today, results released by CHN are far from disappointing.

Significant results include 137 metres at 0.57g/t palladium, 0.14g/t platinum, 0.14% nickel, and 0.10% copper from 58 metres, and 97 metres at 0.58g/t palladium, 0.12g/t platinum, 0.13% nickel, and 0.07% copper from 201 metres.

The other two holes, JRC011 and JRC012, intersected shallow oxide PGE mineralisation.

Results include 113 metres at 0.45g/t palladium, 0.12g/t platinum, 0.17 per cent nickel, and 0.05% copper from 29 metres.

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Today’s results have significantly expanded the resource at Julimar.

So why the fall in share price?

There could be any number of reasons for today’s fall, however, I do suspect it may be due to a waning of interest — investors are consolidating and waiting for more significant announcements.

CHN has not yet been able to explore the southern parts of its tenements.

So, there could be some pull back until there is a clearer picture about the size of this resource.

A second land access agreement has been executed according to CHN, so we might see results south of the initial discovery in the coming weeks.

The results released last week indicated strong mineralisation close to 500 metres in depth.

Some may have been expecting to hear more from these deeper indications rather than the shallower results released today.

But it should be noted, today’s results come from drill holes to the east of the initial discovery, not the north per last week’s results.

Further potential

A total of 15 holes has now been drilled at the Gonneville Intrusive on the Julimar Project.

Chalice said it is now planning a wide array of works which include diamond drilling, down-hole electromagnetic drilling, and RC drilling.

And they are not for a lack of targets.

Watch for deeper drilling results and results on the southern end of the project.

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Kind Regards,

Lachlann Tierney,
For The Daily Reckoning Australia