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Chalice Gold Mines successful $100 million institutional placement accelerates exploration activities at Julimar

Last updated: 12:38 02 Dec 2020 AEDT, First published: 12:34 02 Dec 2020 AEDT

Chalice Gold Mines Ltd - Chalice Gold Mines successful $100 million institutional placement accelerates exploration activities at Julimar
On completion of the placement the company will have a cash balance of around $126 million

Chalice Gold Mines Limited (ASX:CHN) has received firm commitments for a $100 million placement to sophisticated, professional and institutional investors.

The placement will comprise the issue of around 26.7 million new fully paid ordinary shares at an issue price of $3.75 per share.

This represents a 7.6% discount to the last close price of $4.06 per share on November 30, 2020, and a 3.9% discount to the 5-day volume-weighted average share price of $3.90 per share.

In addition to the placement, the company has also announced a Share Purchase Plan (SPP) of up to $10 million, with the placement and SPP expected to raise gross proceeds of up to $110 million.

“Incredibly strong" demand

Chalice managing director Alex Dorsch said: “The demand for the placement was incredibly strong, with the book covered multiple times over the desired amount.

“This is testament to the scale and quality of the discovery at Julimar, but also the potential of the region to become a new world-class base and precious metals mineral province.

“The board of directors would like to thank our current shareholders for their ongoing strong support and also welcome our new high calibre institutions to the share register in what will be a truly exciting journey ahead for Chalice.”

Share purchase plan

The non-underwritten SPP will raise up to around $10 million (before costs) via the issue of shares at the same price as the placement.

Eligible shareholders, being those holders of shares with an address in Australia or New Zealand as at 4.00pm (AWST) on Monday, November 30, 2020, will have the opportunity to apply for up to $30,000 worth of new shares in the company.

The shares issued under the SPP will rank equally with existing ordinary shares of the company.

At this stage, the maximum gross amount to be raised under the SPP is $10 million, however, the company reserves the right to change this cap at its discretion by announcement to the ASX.

The indicative key dates for the placement and the SPP.

Exploration fully funded

Post raising, Chalice will be fully funded to support accelerated exploration and development activities at its Julimar Nickel-Copper-PGE Project in WA, including:

  • Around 160,000 metres of resource definition drilling in order to define a maiden mineral resource estimate (majority in measured and indicated categories, constrained to an open-pit) for the Gonneville PGE-nickel-copper-cobalt-gold discovery by mid-2021;
  • Complete scoping and pre-feasibility studies for the Gonneville discovery by around Q4 2021 and Q4 2022 respectively;
  • Initial drilling at new EM anomalies within the Julimar State Forest – namely the 6.5-kilometre-long Hartog EM Anomaly (subject to access approval); and
  • Initial regional exploration activities within the greater than 8,000 square kilometre position in the new West Yilgarn Province, plus continued generative exploration at the Pyramid Hill Gold Project (Vic) and Hawkstone Nickel-Copper-Cobalt Project (WA).

Maiden mineral resource pending

Dorsch said: “Approximately 160,000 metres of diamond and RC drilling is now planned at Gonneville to support the delivery of a maiden mineral resource in mid-2021, which will then lead into mining studies planned over the following 18 months.

“We have also earmarked significant funding for initial drill testing of the compelling multi-kilometre scale targets within the Julimar State Forest once approvals are obtained.”

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