Here’s why Chalice Mining (ASX:CHN) crashed more than 25% on Wednesday!

Nick Sundich Nick Sundich, August 30, 2023

Chalice Mining (ASX:CHN) shares crashed on Wednesday and it is all because of the release of a scoping study.


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A recap of Chalice Mining (ASX:CHN)

Chalice Mining owns the Julimar PGE-nickel deposit that lies an hour out of Perth. The company has never looked back since it first discovered the deposit and scratched the surface of its potential, given its resources, convenient location and the perfect timing of the discovery amidst the push for decarbonisation.


Why it fell this morning

But investors found out this morning that it could cost $1.6-$2.3bn to turn into an operating mine and this is why shares fell this morning. The price tag will depend on the output, 15m tonnes a year would lead to the lower figure while 30m tonnes a year would lead to the higher figure.

Chalice also revealed that it would not make a Final Investment Decision until 2026 and first production may not occur until 2029.

Investors are not just worried about the price tag – although if the deposit is as good as it seems, there shouldn’t be a problem. They also fear the substantial equity dilution and/or debt burden that could occur. And it is also less likely now that it will be acquired any time soon as some investors had hoped for. Hence the big sell off today!


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