Why is the Chalice Mining (ASX:CHN) share price struggling today?

The company’s quarterly activities update has not been well received…

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The Chalice Mining Ltd (ASX: CHN) share price is nudging into the red during afternoon trade today.

After a nifty start, Chalice Mining shares cratered as the company released its quarterly activities report for the 3 months ended September 30, 2021.

At the time of writing, the Chalice MIning share price is down 0.72% to $6.85. It was at $6.96 when the company released the report just after midday before dropping sharply on the news.

Chalice Mining share price slides following quarterly updates

From the third quarter, Chalice outlined it had a cash balance of approximately $81.3 million. It also had a further $5.1 million in listed equity investments.

The company also disposed of its main holding in O3 Mining Inc this quarter, obtaining $4.6 million from the sale.

With regards to its 100%-owned Julimar Nickel-Copper-PGE project, all assays informing the mineral resource estimate (MRE) at the site have now been reported.

Investors can expect the ‘pit-constrained’ MRE to be released in Q4 FY21, the company says.

Chalice confirmed it is also proceeding with the previously announced demerger and potential ASX listing of what it calls its “highly prospective gold assets”.

These include the company’s Pyramid Hill, Viking, and Mt Jackson gold projects. These will all be spun off into a new ASX-listed entity known as Falcon Metals Ltd.

It is proposed to trade under the ticker “ASX: FAL”, should the ASX pass all resolutions and proposals under the demerger.

The company has appointed a suite of highly skilled personnel to Falcon’s board. They have “a proven track record in making major discoveries and delivering exceptional returns to shareholders”.

Aside from this, the company continues its drilling and survey programs at each of its other major projects. These include its Hawkstone nickel-copper-cobalt project and its Barrabarra and South West nickel-copper-PGE projects, all in WA.

What’s next for Chalice Mining?

Undoubtedly, the key upcoming catalyst for the company is the spin-out of its gold assets into the newly formed Falcon Metals.

In addition, the Julimar project is set to continue studies for an initial mining development at Gonneville on private farmland. This will continue defining the “full extent of the mineralisation along the (more than) 26km long Julimar Complex”.

Chalice has since commenced step-out drilling at the site. Geotechnical, metallurgical, hydrogeological, and infrastructure drilling will commence shortly, and continue until Q1 2022.

Aside from this, metallurgical test work and support studies are now focused on optimising disseminated sulphide performance and assessing mining scenarios for its Gonneville deposit.

The Chalice Mining share price has been an outsized winner this year to date. It has posted a return of 76% since January 1, and 117% in the past 12 months.

Should you invest $1,000 in Chalice Mining right now?

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The author Zach Bristow has no positions 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 Bruce Jackson.

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