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MINING | Chalice Gold Mines
CHALIC GOLD
Cashed up and debt free with Canad and Australian gold assets
CE D
dian
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MINING | Chalice Gold Mines
Alex Dorsch of Chalice Gold Mines traces the company’s history back to 2006 when it listed on “Here the Australian Stock Exchange, we originally owning the historic are 18 Chalice gold mine in Western months Australia. However, the CEO later and explains how it wasn’t until we’ve built the 2009 venture into Eritrea a substantial in Northern Africa that the portfolio of company was materialised, after exploration assets its acquisition of the Zara Gold in the world-class Project. Chalice advanced the domains of Canada and project over the next three years, Australia,” says Dorsch. The until a significant US$114 million CEO believes that what sets bid, lobbed by a Chinese-Eritrean Chalice apart from its exploration consortium convinced the competitors is the company’s company to sell. Using the funds combination of financial capability and broad technical and commercial from the Eritrea sale, Chalice spotted an opportunity in Canada strengths. and snapped up a gold project in Financial and technical 2012, before making a healthy profit again with a divestment in proficiency “It’s a unique business model where the 2016. company can apply its strong financial
By this point Chalice had developed a strong
position as well as its deep technical and
nous in reading the market and commodity
commercial ability to really interrogate
price cycle, with an ability to smell the right
projects quickly, pick opportune times to
time to invest in order to maximise investor
acquire and make material progress in
returns.
developing each one.”
The company changed tact slightly in 2017,
Returning to its transaction history, the sales
when the board found there was a growing
in Eritrea and Canada put the company in a
appetite for risk in the sector and decided to
commanding financial position, in that it has
build a commanding exploration portfolio,
been well cashed up and debt free ever since.
targeting discovery in Canada and Australia. This is a rare position for a junior exploration
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company to find itself in; having a war chest
highly regarded industry veteran Tim Goyder.
of over AUS$40 million. Crucially, the healthy
He has a great track record of success and is
balance sheet has meant Chalice has not had
an integral part of the business as executive
to rely on capital markets and going back
chairman.
to shareholders every time it needs to raise funds to support development plans.
“Beyond that, within the wider team there is a demonstrable depth and breadth of
Dorsch also regards the board and 25-strong
experience which I think is another key driver
Chalice team as another key area of strength
of the business.�
within the business. “We have a very experienced board led by well-known and
The decision to focus its exploration portfolio
MINING | Chalice Gold Mines
Resource Global Network
on Canada and Australia ended up being
“We like the geological selling point and
a no-brainer for the board for myriad
investment certainty that comes with
reasons beyond the obvious low sovereign
mining friendly jurisdictions, so from that
risk attached to operating in these secure,
perspective it’s a very attractive proposition
mining-friendly regions.
to be operating in those countries.”
In fact, mining-friendly is a bit of an
East Cadillac Gold Project
understatement, particularly in the case of
Chalice’s flagship asset is the East Cadillac
Québec. The Canadian province rebates
Gold Project, located in the world-class Abitibi
Chalice around 30% of its direct exploration
greenstone belt in Québec along the Cadillac
expenditure and on top of that, there is no
break, which hosts over 100 million ounces
state royalty – making it a very attractive
(Moz) of gold discovered and a number of
region for exploration.
globally significant gold mines.
“It’s the endowment of both regions and
“We are in very good company and have a
their geological potential,” says Dorsch. “We
regionally significant ground position now
consider Canada and Australia world-class
covering over 27 km of strike along that
domains, with a lot more to give in terms of
break. We are very encouraged by what we
exploration potential.
have seen from the work to date.”
MINING | Chalice Gold Mines
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“We’ve only had the property for just over 18
property in October last year and have only
months and have continued to expand the
just completed that programme in early
ground holding, while undertaking a back-to-
April,” reveals Dorsch.
basics, ground-up exploration programme to give it the best chance of success in making a
From the initial phase of drilling Chalice has
substantial discovery.”
made two promising gold discoveries to date, with a large portion of results still pending
When Chalice first picked up the project, they
and a number of additional targets waiting to
noticed it had significant exploration gaps
be tested. The drilling was performed by two
and was likened to a patchwork of random
reliable international drilling contractors.
sampling and ineffective drilling. Seeing this, Chalice stepped back and began with regional “We had great support from Foraco, G4, sampling and all the modern geophysical
ALS, MRB & Associates, Abitibi Geophysics,
tools it had at its disposal, including 3D
amongst others in Val-d’Or; they have all
Induced Polarisation, aeromagnetic and
done an excellent job. To drill the best part
LIDAR surveys.
of 30,000 metres on time, under budget and without significant incident is very
“We used all of those tools successfully and
commendable, so we are really happy with
started our first phase of drilling on the
that outcome.”
MINING | Chalice Gold Mines
Resource Global Network
Australian assets
“It is a difficult area to explore but we have
Turning to the Australian portfolio, Chalice
the right EM and gravity signatures on our
has established two main projects Down
block that gives us a lot of excitement about
Under: The Warrego North Project in the
exploration success,” says a hopeful Dorsch.
Northern Territory and the Pyramid Hill Gold Project in Victoria.
Chalice also recently picked up a district scale land position at Pyramid Hill, extending over
The former is located in the very well-
3,350km2 of ground North of Bendigo in
endowed Tennant Creek area in close
Victoria. Initial findings indicate that there is
proximity to several historic mines dating
a real lack of exploration under the Murray
back to the mid-20th century, including the
Basin cover in that area.
1.6Moz gold-producing Warrego Mine. This notion has been strengthened by the “We are immediately Northwest of the
Victorian government’s declaration that there
Warrego mine, a very high-grade historical
is potentially over 32Moz of gold extending
gold-copper mine in the Tennant Creek IOCG
North of Bendigo, which has given Chalice
domain. The area has many similar mines,
extra motivation to begin work on the project
all with a relatively small surficial footprint
very shortly.
but very high-grade ore bodies extending at depth.
MINING | Chalice Gold Mines
Commodity markets
acquire projects that we genuinely want to
Chalice is looking to accelerate work across
run.
all of its projects over the next 12 months but will also uphold an aggressive acquisition
“Our strategy is very much based on making
strategy.
timely acquisitions of undervalued assets and at the moment our focus is on gold and
“We are looking at upwards of 10
nickel sulphide projects.”
opportunities at any one time and enjoy the luxury of having a significant amount
Dorsch believes that macro conditions
of capital to deploy – but we always look at
shaping the gold market have not had quite
acquisitions with an owner’s mindset; we
as profound an effect on prices as usual,
Resource Global Network the cycle by the company. Hence, Chalice is keeping its ear to the ground with regards to opportunities in this space. “Ours is a distinctive and unique value proposition,” concludes Dorsch. “Typically, junior explorers don’t have the ability to operate at our level, so I like to think we have a particularly strong value proposition given we are trading around our cash backing, with a proven model based on acquiring assets at opportune times,
citing ongoing political instability in North
progressing them rapidly and delivering
Korea and the Middle East.
value to shareholders.
However, Chalice continues to monitor these
“Having that financial ability, commercial
external forces and remains bullish on gold
mindset as well as the technical ability really
and other base metals, which are viewed
does differentiate us.”
as being at the beginning of an upturn in
ASX:CHN TSX:CXN
a j
Published by Anderson Murray Media Ltd
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