I was wondering if any one else had Chalice in their portfolio or watchlist?
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.
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!
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.
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?
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.
Tim BorehamChalice 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.
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