Chalice Gold Mines (ASX: CHN) is the latest stock to get caught up in the Pilbara gold rush, with the explorer’s shares surging 40% in morning trade on news it had increased its West Pilbara gold project area and was about to kick-off a drilling campaign.
Located about 160km south of Karratha in Western Australia, the company’s West Pilbara project area has expanded 881 square kilometres to 2,271 square kilometres.
The West Pilbara project is in proximity to prospects owned by Novo Resources (TSX: NVO), Artemis Resources (ASX: ARV) and De Grey Mining (ASX: DEG), which have all reported multiple gold discoveries that sent their respective stock soaring in recent days.
Also, of note are Chalice Gold Mines’ new tenements which are 8km from Northern Star Resources’ (ASX: NTS) Paulsens gold mine which produced 55,490 ounces of gold in the 2017 financial year.
Previous rock chip samples from Chalice Gold Mines’ West Pilbara project have returned up to 9.5 grams per tonne of gold and 29% copper.
The drilling campaign at the project will include up to 6,500m of reverse core and aircore drilling at Wyloo East, Urandy, Kens Bore and Derek’s Bore gold prospects. The campaign will also include drilling at Red Hill and Wyloo West targets believed prospective for copper.
Chalice Gold Mines has a market cap of almost $62 million, with an existing asset portfolio of exploration licences in Canada, the Northern Territory and Western Australia.
About 1,390 square kilometres of the West Pilbara project is subject to a joint venture with Red Hill Iron (ASX: RHI). Chalice Gold Mines can earn a 51% stake in non-iron rights of the project area and up to 70% if Red Hill Iron elects not to contribute at this stage.
According to Chalice Gold Mines, its West Pilbara project area is “significantly under-explored for gold and base metals.”