The Chalice Mining Ltd (ASX: CHN) share price is in the green this morning with the company releasing seismic results that suggest its Gonneville gold project may contain more gold than originally expected.
The gold miner said that its 2D seismic surveys identified the potential plunge extension of the Gonneville Intrusion. The extension ran for around 1.6km northwest of the resource and is circa 500m below the surface.
The news seems to have offset the general gloom hanging over ASX gold shares. The Chalice Mining share price is up 1.57% at the time of writing to $4.52. That's ahead of the All Ordinaries' (ASX: XAO) gain of 0.58% in early morning trade.
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Chalice Mining share price climbs
The results highlight significant growth potential for the Gonneville project in Western Australia. Given the sulphide-rich nature of the Gonneville Intrusion, this extension could significantly expand the deposit to this point and, potentially, beyond.
The extension is open to the north. Chalice will soon commence step-out drilling to validate the seismic interpretation.
Drilling results
Meanwhile, the miner added that drilling at the Dampier Target has confirmed "encouraging evidence" of widespread sulphide mineralisation. Chalice believes this indicates a fertile mineral system that's around 10km north of Gonneville.
The drilling found 9.6m @ 0.2g/t 3E (gold, palladium and platinum). It also found 0.2% copper, 0.03% Co (~0.7% NIEq – nickel equivalent) from 203m.
Further, the drill results contained 41.6m @ 0.5g/t 3E, 0.1% Ni, 0.1% Cu, 0.01% Co (~0.4% NiEq) from 63m.
There are another 27 sites that are yet to be drilled across the ~10km Hartog-Dampier strike length. Chalice is also looking at the financial viability of a smaller "starter mine" as an initial first phase of the project.
Gold losing its lustre
The Chalice Mining share price is climbing in early trading on Tuesday, perhaps also boosted also by a 1% increase in the gold price.
The price of the yellow metal is inching up after falling below US$1,700 an ounce last week. The price of the commodity is making a small recovery as breakeven bond yields fell. The breakeven is the difference between nominal US government bonds and inflation-adjusted bonds.
But investors may be worried that the rebound won't last given how hawkish the US Federal Reserve (and other central bankers) are.
This probably explains why the Northern Star Resources Ltd (ASX: NST) share price is down 0.87% and the Evolution Mining Ltd (ASX: EVN) share price is steady at the time of writing.
Chalice Mining share price snapshot
Gold has been out of favour as interest rates around the world rise. This is because gold doesn't pay a dividend, unlike bonds. The higher the yield on bonds, the less attractive holding gold is.
The Chalice Mining share price lost more than 32% in the last 12 months. But at least it is in good company. The Northern Star and Evolution Mining share prices are down more than 25% and 44%, respectively, over the period.
