Will a New Find Push the Chalice Share Price Past Resistance?

Will a New Find Push the Chalice Share Price Past Resistance?

Earlier this month we noted the rapid rise of the Chalice Gold Mines Ltd [ASX:CHN] share price.

But things began to cool down a couple of weeks later and the share price seemed to meet some resistance.

This morning, CHN is up 2.17% or 2.5 cents to trade at $1.175 per share.

The share price hasn’t been able to break past the $1.27 mark, hovering between $1.265 and $1.095 over the past month.

With a new announcement out this morning regarding new gold finds at CHN’s Julimar Project, could this be the news needed for the share price to finally breakout?

High-grade finds, but results mixed

There was a fair bit to unpack this morning and it may be a couple more days before we see how investors truly interpret these results.

The short version of CHN’s announcement is that they’ve found consistent high-grade Ni-Cu-PGE mineralisation confirmed over 75m depths.

CHN announced last week it had begun drilling a new hole to intersect the first drill hole on the Gonneville Intrusive (known as a scissor hole).

The positive news is that results from the second hole included 75.1m at 6.2g/t palladium, 1.7g/t platinum, 1.7% nickel, 0.7% copper, and 0.10% cobalt from 34.9m.

While this zone of high-grade mineralisation remains open currently, there could be cause for concern about the continuity of this zone.

Just an FYI; continuity is desired as it indicates more resources in the ground.

Electromagnetic modelling of survey data failed to demonstrate a significant conductive response along strike.

Meaning the southern end of the tenements may not be as prospective as first hoped.

However, not all mineralisation has a conductive electromagnetic response and does not conclusively rule out continuity.

To be fair, today’s result doesn’t really tell us much more than we already knew. But it certainly does not rule out the potential of the Julimar Project.

A marathon not a sprint

When looking to invest in gold explorers, you need to be prepared to be in it for the long-haul — one-hole wonders don’t come about all that often.

That being said, there has been a spattering of junior gold explorers seeing some success over the past six months.

Alkane Resources Ltd [ASX:ALK], Stavely Minerals Ltd [ASX:SVY], and De Grey Mining Ltd [ASX:DEG] along with CHN have all made some significant greenfield discoveries.

What sets these companies apart from their peers in particular is they are exploring in ‘virgin’ lands, which can add a bit of hype to their share price.

One of CHN’s drawcards is they are being led by some acclaimed geologists — CHN’s exploration manager Dr Kevin Frost won AMEC’s Prospectors Award in 2009.

What this leadership knows is that it takes a significant amount of trial and error to uncover the resource.

I believe today’s results won’t be enough for the CHN share price to push past its current resistance level.

However, they do hint at some interesting prospects at the Julimar Project.

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Lachlann Tierney,
For The Daily Reckoning Australia