CHN - Chalice Mining

[Stinger]

I was wondering if any one else had Chalice in their portfolio or watchlist?
I purchased off the IPO, and still hold and was wondering if anyone had thoughts on the company as i was considering on increasing my holding at the current price.

Thanks

 

[So_Cynical]

I was wondering if any one else had Chalice in their portfolio or watchlist?

I'm gona get about 5000 shares via the merger with SBS, good to see the Chalice
SP jump a bit on the merger news, CHN committing money to go to 80% of the
Zara project was also a good move...SBS holders will end up with approx 39% of
the merged Chalice....Blue sky's ahead.

 

[So_Cynical]

The merger with SBS is now complete and i imagine its full speed ahead with the near 1 million
ounce Zara project, there's a drilling program in the works and a feasibility study due soon.

Also the expected capital raising (4.4 mill) has been announced...resulting in CHN having over 10
mill in cash to advance the Zara project, have to say im a little pissed off they didn't offer all share
holders additional shares @ 27 cents....CHN up almost 17% today

http://chalicegold.com/upload/documents/releases/20090902ASXAnnouncementCapitalRaising.pdf

 

[mctanmar]

Great numbers coming out of Koka deposit in Eritrea from CHN, now i am hoping that the SP reflects this.

Holding CHN.

 

[vincent191]

Interesting to watch CHN for three reasons. 1.) encouraging drilling results - read the latest announcement. 2.) They want to buy out the minority shareholder, Dragon mining. Obviously CHN wouldn't buy a dude, they have first hand in depth knowledge. 3.) some heavy weight investors (Franklin Templeton) starting to appear on their shareholders list. Plus they have raised more cash for on going exploration. Further, they are seeking listing on the Totonto stock exchange, I have no idea what this means. Jumping to conclusions, I have topped up.

 

[tremmas]

Hey skc,

Noticed you picked this one up for the stock tipping comp. Is that purely a play for the cash they could have coming in from the sale of the Zara project?

Assuming everything gets the go-ahead, they’ll be sitting on 90 odd mil cold hard cash with their current market cap of about 70m.

All the CHN announcements sound pretty positive that everything will go smoothly, but I’ve seen a few of these conditional deals with Chinese companies fall through. Are there any unusual/significant risks to the deal being zipped up?

Do you place any value on their other exploration – it’s all pretty early days from the look of things!

 

[skc]

Hey skc,

Noticed you picked this one up for the stock tipping comp. Is that purely a play for the cash they could have coming in from the sale of the Zara project?

Assuming everything gets the go-ahead, they’ll be sitting on 90 odd mil cold hard cash with their current market cap of about 70m.

All the CHN announcements sound pretty positive that everything will go smoothly, but I’ve seen a few of these conditional deals with Chinese companies fall through. Are there any unusual/significant risks to the deal being zipped up?

Do you place any value on their other exploration – it’s all pretty early days from the look of things!

You are right I am punting that the transaction goes through. I didn't do a valuation for their remaining assets after the cash. I will be happy if they simply trade to their cash backing after the transaction.

Obvisouly there is no guarantee that the transaction will go through, but it's hardly moved up on the news anyway. Due diligence to be completed by 14 Mar so a couple of weeks to wait (hence perfect for the March tipping comp). Directors buying on-market recently may or may not be of importance.

So I see potential reward of 10-15c vs potential risk of 3-4c on my entry of 26c, but DYOR as always.

 

[tremmas]

You are right I am punting that the transaction goes through. I didn't do a valuation for their remaining assets after the cash. I will be happy if they simply trade to their cash backing after the transaction.

Obvisouly there is no guarantee that the transaction will go through, but it's hardly moved up on the news anyway. Due diligence to be completed by 14 Mar so a couple of weeks to wait (hence perfect for the March tipping comp). Directors buying on-market recently may or may not be of importance.

So I see potential reward of 10-15c vs potential risk of 3-4c on my entry of 26c, but DYOR as always.

Got stopped out of this one last week as SP slipped on very low volume. Not too fussed as they have extended the ETA for due diligence by a month.

Will keep watching and might look for an opportunity to re-enter closer to April 12.

You might have April's stock competition pick sorted already skc!

 

[skc]

Got stopped out of this one last week as SP slipped on very low volume. Not too fussed as they have extended the ETA for due diligence by a month.

Will keep watching and might look for an opportunity to re-enter closer to April 12.

You might have April's stock competition pick sorted already skc!

Yup. Exited already on the news of extension. The outcome is still undecided but such extension is rarely a positive sign. The gold price crashing hasn't helped either.

 

[springhill]

MC - $61m
SP - 24.5c
Shares - 250m
Options - NQ
Cash - $82m

No need to even explain this one. Current 24.5cps, cash value 33cps. Enough said.

Chalice completes sale of Zara Gold Project in Eritrea to China SFECO Group and ENAMCO for combined US$114M
Net cash balance of $82 million after tax with a focus on acquiring new projects
Chalice Gold Mines Limited (ASX: CHN/TSX: CXN) is pleased to announce that it has today completed the sale of the Zara Gold Project in Eritrea to China SFECO Group for US$78 million plus a deferred payment of US$2 million upon commencement of commercial production at the Koka Gold Mine.
In addition, the Eritrean National Mining Corporation (“ENAMCO”) has settled the remaining balance of US$29 million for its acquisition of a 30 per cent interest in the Zara Project (in addition to its 10 per cent free carried interest).
Chalice has received all funds and paid all applicable taxes due in Eritrea for both the SFECO transaction and the ENAMCO transaction. Chalice’s current cash balance (at today’s USD: AUD exchange rate) is $82 million, which equates to approximately 33 cents per share, putting the Company in an exceptionally strong position to embark on its next chapter of growth.

 

[skc]

MC - $61m
SP - 24.5c
Shares - 250m
Options - NQ
Cash - $82m

No need to even explain this one. Current 24.5cps, cash value 33cps. Enough said.

Unfortunately they are not giving anything to the shareholders. I anticipate this to trade below cash level, and fall much below cash level when they announce they've found their next big project.

 

[springhill]

Unfortunately they are not giving anything to the shareholders. I anticipate this to trade below cash level, and fall much below cash level when they announce they've found their next big project.

Not knowing the history of CHN, why do you say this mate? Cash burn this quarter is only projected to be $1.2m.
Do they have a history of wasting money, or taking an age to make decisions?

 

[skc]

Not knowing the history of CHN, why do you say this mate? Cash burn this quarter is only projected to be $1.2m.
Do they have a history of wasting money, or taking an age to make decisions?

That's what they said in the announcement... they want to embark on next chapter of growth, not return funds to shareholders.

The market prices cash as cash, but cash that doesn't get released deserves a discount, and any exploration projects that they might buy probably get discounted even more in this morket - hence my point that, even if they announce some use of the money, the market will probably rather have it in the pocket.

 

[Clansman]

At least they are cashed up, which is more than you can say for most of them, and a good position to be in during the current climate and the road ahead.

 

[skc]

At least they are cashed up, which is more than you can say for most of them, and a good position to be in during the current climate and the road ahead.

Don't disagree. All else being equal, being cashed up is much better position than being cashed out.

But I once held BAU from 90% cash backing down to 50% cash backing (still is trading at that level) - unless you launch a takeover offer for the company or spill the board or something, there's no way to get the hands on the money.

CHN might work out differently, but I've learned not to use share price < cash backing as the sole buy criteria.

 

[Dona Ferentes]

Chalice bears the rare honour among explorers of returning $36m to shareholders, after $107m of asset divestments (most recently the $12m cash and scrip sale of its Canadian prospects).

The still cashed-up Chalice’s efforts are focused on its “highly prospective but essentially unexplored” Pyramid Hill project, in the northern part of the Bendigo zone. Not surprisingly, the company is targeting a “Fosterville-style” discovery of five million ounces-plus.

The company is part way through a 25,000m air core drilling program — followed by a diamond drilling program — that will determine how many ounces the old timers left behind.

But with a Victorian government survey suggesting a 32 million ounce undiscovered “gold endowment” in the northern Bendigo zone, the company won’t die wondering.

Chalice is also doing early-stage stuff at its King Leopold nickel sulphate project in WA’s Kimberley region, in an area where Buxton Resources and Independence Group also have been sniffing around.

Tim Boreham

 

[finicky]

The first diamond drilling at the Victorian Pyramid Hill Project has already commenced - announced 23rd Jan. Three successive diamond holes to be drilled down to 300 metres at 3 prospects by the one rig. Also, assays 9f 3,000 metres of infill and extensional air core drilling are pending, while further air core drilling continues.

They have found with air-core drilling a 3 kilometre gold anomalous trend at Karri near the Muckleford regional fault which they are excited about. They reckon there's some structural resemblance to Fosterville in that the size is consistent with something big at depth and like Fosterville, the trend is located at a secondary 'structure' pararell to a major regional scale fault. Additionally the Muckelford fault 'controls' two historical large, high grade deposits to the south (Ballarat and Maldon)

Disclosure: holds


Chalice Gold Mines

@ChaliceGold
·
Jan 23

Diamond drilling is now underway at our Pyramid Hill Gold Project in Victoria – initial geological holes being drilled to see what may lie beneath. https://chalicegold.com/sites/default/files/presentations/Chalice%20Corporate%20Presentation%20Jan%202019%20Generic%20vF%2020200122.pdf

 

[finicky]

My entry into the February stock picking comp.
Dammit, I just lost 3 paragraphs worth as I was writing in my Samsung Notes app, so this'll be brief.

CHN put out its Dec Quarterly yesterday for the more precise and discerning types.

The cashflow statement gave me a bit of a shock when I saw net $5m disappeared over the 3 months and there was only $10m cash left. But then it emerged that $2.4m of that expense was an additional investment into ASX listed explorer Spectrum Metals (SPX). At Dec 31 the investment into SPX was worth $7.3m. CHN also has a shareholding in Canadian explorer O3 (TSX.V O111) worth $8.4m. Down the track they might get a $5m royalty from a Tanzanian mine developer. Next Quarter's outflow expected to be $2.8m. So they're pretty flush remembering CHN made a substantial capital return to investors last year.

Focus is Bendigo gold fields where at Pyramid Hill project they have concurrent air-core and diamond drilling campaigns in progress. The diamond holes are investigating broad anomalous gold zones detected from previous air-core drilling. I'm not expecting results to come from the assay lab during February for the more exciting diamond drills but there might be some market interest in continuing air-core results. Don't really know - CHN is a mostly long term hold for me.
Funny pick for a comp limited to Feb now that I think on it - impulsive

 

[finicky]

Some great drilling money to use in the Bendigo region campaign hopefully. Should be $14,550,000 for Chalice if it goes through. I think that's almost double what the SPX investment was worth to CHN at Dec 31 2019.

On twitter @ ChaliceGold today:

Chalice Gold Mines
@ChaliceGold
Spectrum Metals (ASX: $SPX) - of which Chalice is a major shareholder with ~97M shares - announces a takeover offer by Ramelius Resources (ASX: $RMS) for 15c per share: https://asx.com.au/asxpdf/20200210/pdf/44dyr2pts1j2y6.pdf… $CHN

 

[finicky]

High-grade nickel-copper-palladium sulphide intersected at Julimar Project in WA

First drill hole intersects 19m @ 2.6% Ni, 1.0% Cu, 8.4g/t Pd and 1.1g/t Pt from 48m
..........

• In addition to the RC rig at Julimar, three rigs are continuing to drill at the Company’s >5,000km² Pyramid Hill Gold Project in the Bendigo Region of Victoria.

• Despite challenging global market conditions, Chalice remains fully funded to continue its systematic exploration programs in Western Australia and Victoria, with a current working capital and investments balance of ~$23 million (~$0.08 per share) as of 20 March 2020.