Why the Chalice (ASX:CHN) share price hit an all-time high

The Chalice Mining Ltd (ASX: CHN) share price hit an all-time high this week. Let’s take a look at what’s driving the company’s growth.

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Chalice Mining Ltd (ASX: CHN) shares were on fire yesterday. At one point during intraday trade, shares in the mining company were trading at a record $6.73. By the market’s close, however, the Chalice Mining share price had retreated to $6.65 — still up 8.13% on the prior session.

By comparison, the S&P/ASX 200 Index (ASX: XJO) closed Thursday’s session 0.83% higher.

Yesterday’s record-breaking day came after the company reported “significant new results” from one of its mines.

Let’s take a closer look at the news.

What boosted the Chalice share price?

In a statement to the ASX, Chalice Mining advised it has made further major finds at its Julimar Nickel-Copper, Platinum Group Element (PGE) Project in Western Australia. In the release, the company said it intersected 165 new, high-grade mineralised areas with at least 1 gram of palladium per tonne. The most prominent highlights included:

  • A 13.4m wide ore with 6.3g per tonne of palladium, 1.1g per tonne of platinum, 1.3% nickel, 0.7% copper, and 0.07% cobalt.
  • A 13m wide ore with 4.7g per tonne of palladium, 1.0g per tonne of platinum, 0.4g per tonne of gold, 0.2% nickel, 2.2% copper, and 0.02% cobalt.
  • A 12m wide ore with 2.6g per tonne of palladium, 1.4g per tonne of platinum, 0.8g per tonne of gold, 0.2% nickel, 0.9% copper, and 0.01% cobalt.

Investors seemed to agree with the significance of the results, judging by the Chalice share price moves.

Management commentary

Chalice managing director Alex Dorsch called the discoveries “world-class”, saying:

Even after 87,000m over more than 13 months of continuous drilling, we continue to expand of the footprint of our major Julimar discovery; a quite remarkable result that demonstrates the potential world-class nature of the discovery.

He went on to add:

Given the continued expansion of the Gonneville deposit [located within the project], in particular the growth of the high-grade zones, the quantum of drilling required to define the maiden Mineral Resource is likely to grow. We are now anticipating resource definition drilling will continue into Q3 2021 and the maiden Mineral Resource will be released in late Q3 2021.

Copper, gold, and PGE commodity prices

According to the website Trading Economics, at the time of writing, copper is selling on the open market for US$4.27 per pound. Gold is trading at US$1,791.13 per troy ounce, platinum is US$1,210.19 per troy ounce, and palladium is US$2,871.20 per troy ounce.

Respectively, these metals have changed in value by 21.2%, -5.54%, 13.5%, and 17.31% since the beginning of this year. These mostly positive trends seem to be good news for the Chalice share price, which is up almost 55% over the same period.

Copper is expected to continue rising into the future as the economy improves and demand for renewable energy rises. Many expect PGE metals to follow, as they are also essential to renewable technology. Gold, on the other hand, generally has an inverse relationship to the economy. As GDP grows, in theory, gold prices should fall.

Smaller amounts of cobalt were also highlighted in this week’s announcement from Chalice. Cobalt is currently trading for US$49,750.00 per tonne and is up 54.55% in 2021.

Chalice share price snapshot

Over the past 12 months, the Chalice share price has increased by around 530%. An announcement regarding the expansion of the company’s Julimar mine on Monday also saw its share price increase.

Chalice Mining has a market capitalisation of $2.3 billion.

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Motley Fool contributor Marc Sidarous 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 Bruce Jackson.

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