The Chalice Mining Ltd (ASX: CHN) share price returned from its trading halt on Wednesday and tumbled notably lower.
The mineral exploration company's shares ended the day 6.5% lower at $6.23.
Why did the Chalice Mining share price tumble?
The catalyst for the weakness in the Chalice Mining share price was the completion of the company's institutional placement this afternoon.
According to the release, Chalice has successfully raised approximately $100 million from institutional investors after receiving very strong support from leading domestic and international institutions.
These funds were raised at $6.00 per new share, which was a 10% discount to the Chalice Mining share price prior to its halt.
Upon completion of the placement, Chalice expects to have cash on hand of ~$141 million.
Why is Chalice raising funds?
The release explains that this capital raising means Chalice is now fully funded for the next 18 months of exploration and pre-development activities at its 100%-owned Julimar Nickel-Copper-PGE Project and the highly prospective West Yilgarn licence holding.
The Julimar Project is located ~70km north-east of Perth in Western Australia and is surrounded by world-class infrastructure. The company has been busy drilling the Gonneville deposit, which intersected shallow high-grade PGE-nickel-copper-cobalt-gold sulphide mineralisation.
This led to the release of its maiden resource last year for Gonneville, which confirmed that it is one of the largest nickel-copper-PGE sulphide discoveries worldwide. It is also the largest PGE discovery in Australian history, which management believes demonstrates the potential for Julimar to become a strategic, long-life green metals asset.
In addition, the company holds an enormous land position in the new West Yilgarn Ni-Cu-PGE Province. Management believes this gives it a first mover advantage in an almost entirely unexplored mineral province.
These certainly are exciting times for Chalice, which goes some way to explaining why the Chalice Mining share price is up over 500% since this time in 2020.
