Picked Up Some Chalice Gold Mine Shares – A Speculator’s Dream

Picked Up Some Chalice Gold Mine Shares – A Speculator’s Dream

As I wrote on Wednesday, I was blown away by a presentation I heard on Chalice Gold Mines (TSX – CXN and ASX – CHN) a couple of days ago.  I was partly blown away because I wasn’t expecting to hear the presentation and partly because I had never even heard of the company – you can have a look at my recap of Wednesday’s presentation here.  Chalice is dual-listed in Australia (Perth head office) and Canada, so I wanted to get a feel for how and where the shares traded before taking a position.  But I’ve now taken a position at an average price of $0.125 (Canadian).

Managing Director Alex Dorsch gave one of the best corporate presentations I had ever heard (I will note this doesn’t mean Chalice will have geological success).

Chalice is only interested in looking for +5 million ounce gold deposits.  They’ve been able to put some very nice, and large, land packages together in 2 very prospective belts.

The 245 sq km East Cadillac gold project in the Abitibi greenstone belt of Quebec sits on 27 km of strike on the Larder Lake – Cadillac Fault.  Chalice has 80-100% ownership over this large tenure and has already spent $12 million on the project.  Chalice just recently commenced an 8100 m drill program at East Cadillac that should take them to the end of March.

Their other highly prospective tenure is the 4500 sq km Pyramid Hill project in the hotly contested Bendigo Zone of Victoria, Australia.  Chalice’s Pyramid Hill land position is made up of 3 main areas: Muckleford, Mt. William, and Percydale.  They started drilling off their maiden 15,000 m program in 2018 and drilling should continue until the end of February.

Chalice currently sits on about $21 million in cash and $2 million in liquid investments.  At 266 million shares outstanding, that’s nearly $0.09 per share in cash on a company that I just bought at $0.125 – that’s right, Chalice Gold’s valuation is 72% backstopped by cash, I like those metrics.  Chalice is undertaking what can be considered regional scale exploration because of the size of their projects, so I’ll have to be realistic with my expectations in the short-term.  But with its cash position, small market cap, and attractive land position, I had had to own Chalice ASAP.

Philip O'Neill
Philip O'Neill
poneill@mp1capital.com