Chalice Mining (ASX:CHN) share price flops on demerger of gold assets

Chalice has taken a giant leap from its gold mining roots. It plans to remove the golden metal from its books completely.

| More on:
plummeting gold share price

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Chalice Mining Ltd (ASX: CHN) share price is falling this morning after the company announced plans to demerge its gold assets.

The Chalice Mining share price is currently $7.31 ­– 0.41% lower than its previous closing price.

The fall is particularly noteworthy when compared to the broader market's gains. Currently, the All Ordinaries Index's (ASX: XAO) has gained 0.79% today. The S&P/ASX 200 Index (ASX: XJO) is also in the green, having jumped 0.84%.

On top of its intent to demerge its gold assets, Chalice Mining released assay results from its Pyramid Hill Gold Project.

Let's take a look at the news putting pressure on the Chalice Mining share price today.

What's driving the Chalice Mining share price?

Golden demerger

The Chalice Mining share price is in the red following the company's plan to spin off its gold assets into a new ASX-listed company.

The headline acts during the demerged company's Initial Public Offering (IPO) would be Chalice Mining's wholly-owned Pyramid Hill Gold Project and its up-and-coming Viking Project, where the company is earning up to a 70% joint venture interest.

Chalice Mining said the demerger would allow it to focus on its nickel, copper, and platinum group minerals projects.

Chalice Mining expects the demerger to occur during the final quarter of 2021, subject to shareholder and regulatory approval.

Commentary from management

Chalice Mining's managing director Alex Dorsch commented on the demerger:

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 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.

Pyramid Hill Gold Project

In other news potentially driving the Chalice Mining share price today, the company released assay results from its Pyramid Hill Project.

Assay results at the project's Karri Prospect found high-grade gold intersected over more than 2.5 kilometres of strike length.

Additionally, a second phase of drilling found new shallow gold intersections at the project's Ironbark Prospect.

Dorsch commented on the findings:

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

Chalice Mining share price snapshot

2021 has been a productive year so far for the Chalice Mining share price.

Currently, it has gained 86% year to date. It has also gained 517% since this time last year.

The company has a market capitalisation of around $2.5 billion, with approximately 346 million shares outstanding.

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. 

The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Gold

Gold bars with a share price chart in the background.
Gold

Why ASX 200 gold stocks look 'undervalued' heading into 2025

The ASX Gold Index is up 37% in a year, but gold stocks are still looking undervalued.

Read more »

A mining executive from Red Dirt Metals chats on her mobile phone looking pleased with a mining site and mining truck in the background
Gold

Which soaring ASX gold share now has $200 million more financial firepower?

Funds will be used to expand operations.

Read more »

A woman blowing gold glitter out of her hands with a joyous smile on her face.
Gold

Hitting new record highs again today, should I buy gold as an investment?

Investors who bought gold a year ago have realised gains of more than 39%.

Read more »

gold, gold miner, gold discovery, gold nugget, gold price,
Gold

2 ASX 200 gold stocks making big news today

The ASX 200 gold miners released some important updates today.

Read more »

Gold bars on top of gold coins.
Gold

Is the ASX gold rush expected to keep enriching investors?

Are the golden days behind us for precious metals miners?

Read more »

plummeting gold share price
Share Fallers

Why this top ASX gold share is tumbling 11% today

The shine is off one of the market's largest gold miners.

Read more »

A group of young friends are supposed to be having a rooftop party but the lights have dimmed, the energy is low, and it's a bit of a downer.
Gold

Newmont share price slides 7% as Q3 update disappoints

No glitter for the gold miner on Thursday morning.

Read more »

Two miners examine things they have taken out the ground.
Gold

Northern Star share price slips on rising costs

ASX 200 investors are bidding down Northern Star shares today.

Read more »