Announcement of de-meger of gold assets from Chalice -
I haven't fully read and taken this in yet, however, spinning off the gold assets in to a stand alone company could be positive for the Julimar 'green metals' deposits etc - no longer will they be subject the vagueries of the gold price and they may find their own value - hopefully in an upwards direction!. I wonder what that means for holders - how many shares in the new venture would we be likely to get?
Extract from the announcement below.
Overview Chalice Mining Limited (“Chalice” or “the Company”, ASX: CHN | OTCQB: CGMLF) is pleased to announce that it intends to pursue a demerger of its Australian gold assets, subject to shareholder and regulatory approvals. The decision follows a strategic review of Chalice’s portfolio which concluded that a demerger of the Company’s gold projects (including the district-scale, 100%-owned Pyramid Hill Gold Project in Victoria) is the optimal structure to maximise value for our shareholders. A demerger would also allow Chalice to focus on its world-class Julimar Ni-Cu-PGE Project and the new West Yilgarn Ni-Cu-PGE Province in Western Australia. A demerger would aim to deliver Chalice shareholders a standalone, listed, Australian gold-focused exploration company with a strong balance sheet to target tier-1 gold discoveries in Victoria and WA. The demerged entity would hold the largest land position (>5,000km2) in the Bendigo Zone of Victoria, which hosts Kirkland Lake Gold’s (NYSE / TSX: KL | ASX: KLA) world-class Fosterville Gold Mine (~9Moz Au endowment) and the historic Bendigo Goldfield (>22Moz Au endowment). The entity’s portfolio would be further enhanced by Chalice’s other high-potential gold projects, including the highly prospective Viking Project in WA (where Chalice is earning up to a 70% JV interest). Key advisors have been engaged to commence preparations on the proposed demerger. The potential transaction structure will be finalised subject to receiving legal, financial and taxation advice, and communication with regulatory authorities. The potential transaction is subject to obtaining all necessary shareholder and regulatory approvals. The Company will provide further details in the coming months as these matters are progressed. Chalice is also pleased to report significant results from the latest exploration program at its Pyramid Hill Gold Project, where it has continued systematic exploration drilling activities throughout the 2020- 2021 field season. A total of 21 diamond holes for 7,300m and 1,120 AC holes for 117,000m have been completed across this exciting greenfield project since its initial staking in late 2017. A second phase of diamond drilling was completed during the recent field season at the Karri Prospect (11 holes for 3,840m), which intersected several high-grade gold zones in highly prospective, tightly folded, Castlemaine Group stratigraphy, under 50-70m of Murray Basin cover. A second phase of AC drilling was also completed at the Ironbark Prospect and an initial phase of reconnaissance AC drilling was completed on new target areas at the southern end of the Muckleford area (NW of Bendigo/Fosterville) and at the western end of the Mt William area (NE of Fosterville). Several highly encouraging shallow primary gold zones were intersected at Ironbark and several new prospects have been defined in the Muckleford area. ASX:CHN OTCQB:CGMLF Chalice Mining Limited 3 Chalice’s Managing Director, Alex Dorsch, said: “The proposed demerger provides an exciting opportunity for our shareholders to benefit from the creation of a standalone, well-funded Australian gold exploration company with a high-quality asset base in Victoria and WA. “The board has made this decision after conducting a detailed review of our portfolio in light of the enormous success we have enjoyed over the past 18 months at our flagship Julimar Nickel-CopperPGE Project in WA. The Julimar discovery has transformed the Company and unlocked a new worldclass mineral province in WA, setting Chalice firmly on course to become a globally significant player in the critical ‘green metals’ space. “This review concluded that the creation of a new gold-focused explorer would be the optimal structure to ensure that the full potential of the gold portfolio can be realised, while allowing Chalice to continue to focus on completing the resource drill-out and rapidly advancing studies at Julimar. “The compelling recent exploration results in both Victoria and WA have added further rationale to a potential demerger. Exploration activities are ramping up considerably across the new West Yilgarn Ni-Cu-PGE Province in WA following our continued success at Julimar, while recent drilling in Victoria has continued to provide excitement in the background, as outlined further in this announcement. “The recent results at Pyramid Hill are tantalising from a greenfield exploration perspective, given the immense regional endowment in the Bendigo Zone. We are also eagerly anticipating our first drill program at the Viking Project in WA in Q4 2021, where we will be following up on some shallow highgrade gold intersections. We look forward to working closely with the new entity as it scales up exploration both in Victoria and WA.”
