The Chalice Mining Ltd (ASX: CHN) share price returned from its trading halt on Wednesday and tumbled notably lower.
The mineral exploration company’s shares ended the day 6.5% lower at $6.23.
Why did the Chalice Mining share price tumble?
The catalyst for the weakness in the Chalice Mining share price was the completion of the company’s institutional placement this afternoon.
According to the release, Chalice has successfully raised approximately $100 million from institutional investors after receiving very strong support from leading domestic and international institutions.
These funds were raised at $6.00 per new share, which was a 10% discount to the Chalice Mining share price prior to its halt.
Upon completion of the placement, Chalice expects to have cash on hand of ~$141 million.
Why is Chalice raising funds?
The release explains that this capital raising means Chalice is now fully funded for the next 18 months of exploration and pre-development activities at its 100%-owned Julimar Nickel-Copper-PGE Project and the highly prospective West Yilgarn licence holding.
The Julimar Project is located ~70km north-east of Perth in Western Australia and is surrounded by world-class infrastructure. The company has been busy drilling the Gonneville deposit, which intersected shallow high-grade PGE-nickel-copper-cobalt-gold sulphide mineralisation.
This led to the release of its maiden resource last year for Gonneville, which confirmed that it is one of the largest nickel-copper-PGE sulphide discoveries worldwide. It is also the largest PGE discovery in Australian history, which management believes demonstrates the potential for Julimar to become a strategic, long-life green metals asset.
In addition, the company holds an enormous land position in the new West Yilgarn Ni-Cu-PGE Province. Management believes this gives it a first mover advantage in an almost entirely unexplored mineral province.
These certainly are exciting times for Chalice, which goes some way to explaining why the Chalice Mining share price is up over 500% since this time in 2020.
The post Here’s why the Chalice Mining share price sank almost 7% today appeared first on The Motley Fool Australia.
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More reading
- Why BHP, BrainChip, Chalice Mining, and Fisher & Paykel shares are dropping
- Chalice share price remains frozen despite capital raise update
- Why is the Chalice Mining share price on ice today?
- These were the best performing ASX 200 shares last week
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Motley Fool contributor James Mickleboro 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 Scott Phillips.
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