New Extension Sends Chalice Gold Mines’ Share Price Up (ASX:CHN)
The Chalice Gold Mines Ltd [ASX:CHN] share price may have broken its resistance level today — on the announcement of an extension at its Julimar Project in WA.
CHN shares have been tracking sideways since July.
Making up some of the losses incurred during May and June when the share price slumped.
Today, CHN shares appear to be in breakout mode.
At the time of writing the share price was up 12 cents or 11.06% to trade at $1.205 per share.
With the latest share price action, CHN is back to a similar level last seen around April and May.
High-grade extensions at Julimar
When we last visited CHN I noted a waning in share price despite some decent results.
At the time it seemed as though investors were consolidating profits made on its huge run up in March and April.
There might have also been pull back until there was a clearer picture of the resource.
The drilling results released today show a significant extension of the resource at Julimar.
The announcement relates to work being conducted at the Gonneville Intrusion.
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CHN first noted the potential at Gonneville in March, which helped rocket its share price.
Their drilling results demonstrate high-grade platinum-group elements-nickel-copper-cobalt zones.
With some indicating gold mineralisation too.
Some highlights include:
- 31m at 3.3g/t Pd, 0.7g/t Pt, 0.4% Ni, 0.2% Cu, 0.03% Co from 76m
- 30m at 2.8g/t Pd, 0.3g/t Pt, 0.4% Ni, 0.1% Cu, 0.03% Co from 164m
- 7m at 3.9g/t Pd, 2.3g/t Pt, 0.7g/t Au, 0.2% Ni, 0.8% Cu, 0.02% Co from 418.1m
- 7m at 4.4g/t Pd, 0.9g/t Pt, 0.7% Ni, 0.7% Cu, 0.05% Co from 29.3m
These results were recorded in three of the four separate zones at Gonneville.
I won’t go into greater detail on each individual zone, but the results are encouraging.
No substitute for good exploration
Understandably, today’s results may be confusing for some.
There is certainly a bit of information to unpack.
Perhaps the best way to understand the share price action is to look at it with some historical context.
Source: Chalice Gold Mines
The figure above is the Gonneville Intrusion back in June.
Source: Chalice Gold Mines
The figure above is the same area today.
Basically, the difference is we know a lot more about the resource now.
And what we do know is looking promising.
Hence the reaction in the share price.
The identification of four distinct zones is also an interesting development.
Chalice’s Managing Director Alex Dorsch said:
‘The recently discovered PGE-copper-gold dominant G4 Zone, announced in early July, has also been intersected in two, potentially three new holes and we now believe this could represent an entirely new target horizon along the footwall contact of the Gonneville Intrusion with potential for further growth.
‘The key takeaway is that we are rapidly expanding the core of high-grade, high-tenor sulphide mineralisation within these three zones, confirming the significance of the Gonneville discovery.’
As the gold price continues to heat up CHN could be a stock to watch, particularly as it develops its other gold project. Our resident gold expert Shae Russell reckons other Aussie gold stocks could be set to spike as Australia becomes the next ‘gold epicentre’. If you want to learn more, download your free report here.
For The Daily Reckoning Australia