Chalice Mining moves to demerge gold assets

Chalice Mining Ltd (ASX:CHN) (OTCQB:CGMLF) intends to demerge its highly prospective Australian gold assets subject to shareholder and regulatory approvals.

This follows a strategic review of the portfolio which concluded that a demerger of gold projects including the district-scale, 100%-owned Pyramid Hill Project in Victoria and Viking Project in Western Australia, is the optimal structure to maximise value for its shareholders.

A demerger would allow the company to fully focus on its world-class Julimar Nickel-Copper-Platinum Group Elements (PGE) Project and the new West Yilgarn Nickel-Copper-PGE Province in Western Australia.

This would aim to deliver Chalice shareholders a standalone, listed, Australian gold-focused exploration company with a strong balance sheet to target tier-1 gold discoveries in Victoria and WA.

“Exciting opportunity”

Chalice managing director Alex Dorsch said: “The proposed demerger provides an exciting opportunity for our shareholders to benefit from the creation of a standalone, well-funded Australian gold exploration company with a high-quality asset base in Victoria and WA.”

The demerged entity would hold the largest land position of about 5,000 square kilometres in the Bendigo Zone of central Victoria that hosts Kirkland Lake Gold Ltd’s (NYSE:KL) (ASX:KLA) world-class Fosterville Gold Mine and the historic Bendigo Goldfield.

Fosterville has a gold endowment of around 9 million ounces while the Bendigo Goldfield is host to about 22 million ounces.

This portfolio would be further enhanced by Chalice’s other high-potential gold projects, including the highly prospective Viking Project in WA, where Chalice is earning up to a 70% JV interest.

Julimar transforms company

Dorsch said: “The board has made this decision after conducting a detailed review of our portfolio in light of the enormous success we have enjoyed over the past 18 months at our flagship Julimar Nickel-CopperPGE Project in WA.

“The Julimar discovery has transformed the company and unlocked a new world-class mineral province in WA, setting Chalice firmly on course to become a globally significant player in the critical ‘green metals’ space.”

Strong gold results

The company reported strong results from the latest exploration at Pyramid Hill, where it has continued systematic exploration drilling activities throughout the 2020-2021 field season.

Pyramid Hill

Pyramid Hill Gold Project tenure, prospects, regional landholders, gold deposits and occurrences.

Phase 2 diamond drilling at the Karri prospect that totalled 11 holes for 3,840 metres has identified multiple gold zones in highly prospective, tightly folded, Castlemaine group stratigraphy.

Several high-grade gold zones were intersected over 2.5 kilometres of strike length, with strong new intersections including:

• 5.1 metres at 14.0 g/t gold from 100.9 metres including 2.2 metres at 32.2 g/t;
• 6 metres at 2.1 g/t from 261 metres including 1-metre at 11.8 g/t;
• 8 metres at 1.1 g/t from 202 metres; and
• 2 metres at 0.6 g/t from 193 metres including 3 metres at 1.7 g/t.

Proximal to diorite intrusive

Chalice has also completed infill drilling at Ironbark North over the eastern diorite contact and across a new target at Ironbark East with all target areas and significant gold intervals proximal to diorite intrusive contacts against strongly Hornfelsed and bleached Castlemaine Group sediments.

At Ironbark North, the eastern diorite contact gold intercepts are coincident with strong antimony (stibnite) and arsenic (arsenopyrite) with grades up to 1,585 ppm antimony and 5,280 ppm arsenic respectively with best results including:

• 20 metres at 0.64 g/t gold from 104 metres including 8 metres at 1.39 g/t;
• 6 metres at 3.84 g/t from 56 metres; and
• 7 metres at  0.59 g/t from 99 metres to end of hole;

In addition, gold mineralisation at Ironbark East is associated with strongly bleached Castlemaine Group sandstone at hole PA918 and deeply weathered diorite at hole PA953 with results including:

• 29 metres at 0.82 g/t gold from 97 metres including 13 metres at 1.52 g/t to end of hole in PA953; and
• 9 metres at 0.91 g/t from 61 metres in PA918;

Gold anomalism

Chalice’s first-pass drilling identified two new areas of gold anomalism at the newly named Banksia and Wandoo prospects

These new prospects remain at an early stage of exploration and require a considerable amount of follow-up drilling to define the extent of gold anomalism discovered to date with results including:

• 4 metres at 2.39 g/t gold;
• 10 metres at 1.99 g/t; and
• 16 metres at 0.36 g/t including 2 metres at 1.17 g/t.

Furthermore, three wide-spaced first-pass aircore drill lines were completed in the southern Muckleford area about 15 kilometres west of the Bendigo Goldfield with results including:

• 8 metres at 0.15 g/t gold; and
• 8 metres at 0.14 g/t.

“Immense regional endowment”

Dorsch added: “This review concluded that the creation of a new gold-focused explorer would be the optimal structure to ensure that the full potential of the gold portfolio can be realised while allowing Chalice to continue to focus on completing the resource drill-out and rapidly advancing studies at Julimar.

“The compelling recent exploration results in both Victoria and WA have added further rationale to a potential demerger.

“Exploration activities are ramping up considerably across the new West Yilgarn Nickel-Copper-PGE Province in WA following our continued success at Julimar, while recent drilling in Victoria has continued to provide excitement in the background.

“The recent results at Pyramid Hill are tantalising from a greenfield exploration perspective, given the immense regional endowment in the Bendigo Zone.

“We are also eagerly anticipating our first drill program at the Viking Project in WA in Q4 2021, where we will be following up on some shallow high-grade gold intersections.

“We look forward to working closely with the new entity as it scales up exploration both in Victoria and WA.”

Forward program

Chalice has planning underway in preparation for the next round of exploration drilling at Pyramid Hill, which is expected to begin in the fourth quarter of 2021.

Future diamond and AC drilling programs are planned at the Karri, Ironbark, Banksia and Wandoo prospects while initial reconnaissance AC drilling is also planned over new targets on recently granted tenure.

- Ephrems Joseph

Story by ProactiveInvestors