Chalice share price remains frozen despite capital raise update

Chalice is seeking to bolster its balance sheet to fund its exploration activities.

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Key points

  • Chalice shares were halted this morning at $6.67
  • The company has revealed this afternoon it is conducting a $100 million institutional placement
  • The proceeds will be used towards exploration activities at Julimar and West Yilgarn

The Chalice Mining Ltd (ASX: CHN) share price remains in a trading halt this afternoon. This is despite the company providing an update in regards to its latest capital raising efforts.

At the time of writing, the mineral exploration company’s shares are frozen at $6.67.

Chalice launches institutional placement

The Chalice share price was halted this morning while the company prepared to make an announcement. In a statement to the ASX this afternoon, Chalice advised it is conducting a non-underwritten $100 million institutional placement.

The offer will see approximately 16.7 million new ordinary shares issued at a price of $6 apiece. This represents a 10% discount to the last closing price on 23 May.

The new shares to be issued under the placement account for roughly 4.7% of the company’s existing registry (355 million shares).

Chalice noted that it reserves the right to accept placement oversubscriptions within its capacity pursuant to ASX Listing Rule 7.1.

The proceeds received will be used to fund the company’s exploration activities over the next 18 months at Julimar in Western Australia. This includes advancing the Gonneville pre-feasibility study as well as undertaking reconnaissance exploration at West Yilgarn.

In addition to the $100 million, Chalice will tap into its own existing funds of $49 million to support expansion.

As such, $92 million will be allocated towards Julimar and $16 million to West Yilgarn.

Furthermore, $10 million is being set aside for corporate and $31 million for working capital and offer costs.

The new shares are expected to be allotted and issued on 30 May.

About the Chalice share price

Over the last 12 months, the Chalice share price has dropped 14%. It is also down 30% this year to date.

The company’s share price reached a 52-week low of $5.17 earlier this month before rebounding higher.

On valuation metrics, Chalice commands a market capitalisation of roughly $2.37 billion, with 355.02 million shares on issue.

Motley Fool contributor Aaron Teboneras has no position 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 Scott Phillips.

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