Chalice Mining Ltd (ASX: CHN) shares could be very attractively priced for both investors and a would-be suitor.
That's the view of analysts at Bell Potter, which have reaffirmed their bullish view on this ASX 200 mineral exploration share this morning.
What is the broker saying about this ASX 200 mining share?
According to the note, the broker has responded to Chalice Mining's recent capital raising by retaining its buy rating and $12.00 price target.
Based on where this ASX 200 mining share currently trades, this implies potential upside of 64% for investors over the next 12 months.
Commenting on the capital raising, the broker said:
While CHN was already in a relatively strong funding position (with $85m at end March 2023), we believe that strengthening the balance sheet further at this time is a very positive move. It will allow management to wholly focus on project exploration and development activities, as well as the formal strategic partnering process that commenced in April 2023.
What about a potential takeover?
It is well known that Chalice Mining is interested in teaming up with someone for the Julimar project, which is home to the Gonneville deposit – the globally significant and second largest undeveloped nickel sulphide resource in Australia.
Whether it be through a partnership or an acquisition, the broker has suggested that a number of mining giants, including BHP Group Ltd (ASX: BHP), could have their eyes on this deposit. It said:
Companies we believe would be attracted to Gonneville's scale, future-facing metals exposure and strategic value include BHP Group Limited (BHP, not rated), Anglo American plc (AAL:LN, not rated), Glencore plc (GLEN:LN, not rated) and Sibanye-Stillwater (SSW:SJ, not rated). BHP in particular may benefit, due to an objective to grow its nickel sulphide business to a scale relevant to its overall business and have control of raw material supply to its downstream smelting and refining operations in WA.
There has also been speculation that Gonneville has attracted the interest of mining investors that value large-scale, strategic assets such as Hancock Prospecting Pty Ltd and Wyloo Metals, an investment vehicle of Andrew Forrest.
Time will tell what happens with this one, but it's fair to say that this ASX 200 mining share has some very attractive assets. So, a takeover would not be overly surprising.
