Chalice will not retain stake in its spun-out gold entity

Chalice Mining boss Alex Dorsch says the company will not retain a holding in its gold spin-off, with plans for a 100 per cent in-specie distribution to existing shareholders (reports The West Australian).
16th July 2021
Resources Rising Stars

Mr Dorsch made the comments during an investor webinar following the market darling’s announcement that it would demerge its gold assets, focused on the promising Pyramid Hill gold project in Victoria, from Chalice and its celebrated Julimar discovery 70km north of Perth.

He indicated the gold spin-off would be accompanied by a significant capital raising to ensure the new listed entity was well-funded to pursue aggressive exploration at Pyramid Hill, where recent drilling has returned high-grade mineralisation including 5.1m at 14 grams per tonne gold from 100.9m including 2.2m at 32.2g/t.

“We will be lining up drilling in Victoria at Pyramid Hill as well as over in WA at our Viking gold project (35km south-east of Norseman) immediately upon the new entity listing,” Mr Dorsch said.

Chalice is the latest in a growing list of explorers to announce a demerger of a portion of its portfolio and comes after another Tim Goyder-chaired company Liontown Resources announced a similar move.

Strong investor interest in new discoveries, surging commodity prices and buoyant capital markets have provided ideal conditions for the recent flurry of spin-offs.

Chalice has enjoyed a stunning share price surge in the past 15 months on the back of its Julimar discovery north of Perth, which it believes represents a new belt-scale mineralised district hosting palladium, nickel and copper.

The explorer says the spin-out will allow the new entity to focus on the 5000sqkm Pyramid Hill project, which it says bears similarities to the nearby 11 million-ounce Fosterville gold mine run by Canada’s Kirkland Lake Gold.

It will also narrow the focus of Chalice on Julimar as it looks to shore-up the find into an economic, scaleable resource.

Mr Dorsch said the proposed demerger provided an exciting opportunity for 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 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-copper-platinum group elements project in WA,” he said.

“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.

“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.”

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