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MM’s thoughts on Chalice Mining (CHN)

Our Q&As are emailed in our Saturday Morning Report, find the answer to this question below.

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MM’s thoughts on Chalice Mining (CHN)

Hi James, A couple of easy ones for you. We have been chasing resources the last year and been going ok. Not so good ytd. My biggest worry is CHN down 24% ytd. A market cap of over 2billion low debt and tier one tenements? What are they aiming for - production themselves or will someone take them over? Where does their money come from if they have low debt? Also SHL down 18%ytd any upside? Regards Brian

Answer

Hi Brian,

Mining exploration company Chalice Mining (CHN) isn’t a miner that MM has ever bought and it has indeed been under pressure since mid-November. We believe this is a quality operation but the issue for the stock we feel is it simply ran too hard too fast getting ahead of a fair valuation – it was a well owned play.  We are neutral the stock and could easily see another 15% downside towards the $6 area. In terms of funding, they issue shares, which is called equity funding rather than debt funding.

As for Sonic Healthcare (SHL) we do see value emerging after its 22% correction from its December high, we would be comfortable accumulating into current weakness under $38.

 

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Chalice Mining (CHN)
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