The Chalice Gold Mines Limited (ASX: CHN) share price has returned from its trading halt and is dropping lower.
In afternoon trade the mineral exploration company's shares are down 5% to $3.86.
Why was the Chalice Gold Mines share price in a trading halt?
Chalice Gold Mines requested a trading halt on Monday whilst it launched an institutional placement.
This morning the company revealed that it has received firm commitments to raise $100 million through a placement at $3.75 per share. This represents a discount of 7.6% to its last close price.
Management advised that the placement was strongly supported by a range of domestic and international institutions.
It will now push ahead with a share purchase plan (SPP) which aims to raise up to $10 million at the same price.
What is the money being used for?
According to the release, the proceeds from the placement and SPP will be used to accelerate its exploration activities at its Julimar Ni-Cu-PGE Project in Western Australia.
This includes ~160,000 metres of resource definition drilling in order to define a maiden mineral resource estimate for the Gonneville discovery by mid-2021.
It also intends to complete scoping and pre-feasibility studies for the Gonneville discovery by the fourth quarter of 2021 and and fourth quarter of 2022, respectively.
Funds will also be used for initial drilling at new EM anomalies within the Julimar State Forest and initial regional exploration activities within the new West Yilgarn province.
Chalice's 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."
"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," he concluded.
