Chalice Mining
(ASX:CHN) has put a for sale sign on a big chunk of its growing Gonneville green metals prospect in WA after boosting the size of the already world scale nickel, copper, palladium, platinum, gold and cobalt project by 60% – from 350 million to 560 million tonnes.
The implied value in the expansion is in the tens of billions of dollars once mining is underway by the end of this decade.
Chalice told the ASX on Tuesday that the amount of contained metal in the Gonneville prospect is now between 44% and 54% higher than it was in the July, 2022 estimate.
Chalice said that it has now looking for a partner or partners to develop the Gonneville find and its operations and metal processing.
Gonneville is just one of a number of areas of interest along the 30-kilometre Julimar line of strike 70 kilometres north east of the WA capital.
Chalice has already found areas of interest up to 10 kilometres further north along the line of strike at Julimar.
Chalice CEO Alex Dorsch on Tuesday also tantalised investors with news of additional high assay strikes outside the Gonnville prospect area at Julimar including one intersection 193 metres long.
The strike length now defined at Gonneville is 1.9 kilometres covering ore found from the surface to a depth of 800 metres and still open at depth.
News of the updated resource estimate, which has been promised since late 2022, saw Chalice shares up nearly 9% to $6.84 after rising above $7 briefly in early trading.
The new figures cover both resources available via an open cut operation and underground, as well as a high-grade pod of ore than could be mined first.
The company said that the contained metal content in the new estimate was three million tonnes nickel equivalent or 30 million ounces palladium equivalent. That’s up 50% from the July, 2022 estimate of two million tonnes of nickel equivalent and 20 million ounces of palladium equivalent.
(Using the measure ‘equivalent’ for nickel and palladium are ways of describing the total contained metal estimate in terms of the dominant metal or metals in the find – in this case nickel and palladium.)
The 560 million tonnes are at a grade of 0.88 grams to the tonne of 3E (palladium, platinum and gold), 0.16% nickel, 0.09% copper and, 0.015% cobalt (or around 0.54% nickel equivalent or about 1.7 grams to the tonne palladium equivalent).
That compares to the previous figure last July of 350 million tonnes at 0.96g/t 3E 0.16% Ni, 0.10% Cu, 0.015% Co (about 0.58% nickel equivalent or ~1.8 grams to the tonne palladium). That gave two million tonnes of nickel equivalent and 20 million ounces of palladium equivalent.
Chalice now estimates the amount of contained nickel in the new estimate is there are 16 million ounces of 3E metals, 860,000 tonnes of nickel, 520,000 tonnes of copper and 83,000 tonnes of cobalt.
That compares with the July, 2022 estimate of 11 million ounces of 3E metals, 560,0000 tonnes of nickel, 360,000 tonnes of copper and 54,000 tonnes of cobalt.
The amount of contained nickel estimated at Gonneville is up 54%, the amount of cobalt is also up 54%, the amount of copper is 44% higher and the amount of PGE 3 metals is up 45%.
Chalice said the expanded estimate reflects the results from drill holes at Gonneville which increased the contained metal by 18% in the open pit area and by around 16% in the underground category.
An additional 14% increase “is from the application of a slightly reduced open-pit cut-off grade (reflecting updated metallurgical and economic parameters),” Chalice explained.
“As well, recent metallurgical testing has shown improved palladium recovery through the addition of flotation tails leaching,” the company pointed out.
“This work as well as work investigating improvements to flotation recoveries through staged grinding is ongoing, and therefore not factored into this resource update,” the company added.
And the high-grade pod remains an option to be mined first with its size now 27% higher at 120 million tonnes of ore at 1.6 grams of 3E metals to the tonne, 0.20% nickel, 0.18% copper and 0.017% cobalt. Chalice said that’s equal to 5.8 million ounces of 3E metals, 230,000 tonnes of nickel, 210,000 tonnes of cobalt and 20,000 tonnes of cobalt.
It is a significant mine in its own right.
“This higher-grade component affords the project significant optionality in development and remains the focus for ongoing studies evaluating the initial development phase,” Chalice said on Tuesday.
The upgraded estimate and extra drilling will now see Chalice actively look for a ’strategic partner’ or partners among end users for a minority stake and mining and operational partners.
Chalice made it clear that the partnering process is now front of mind of management.
It said the process “will explore a broad range of transactions with aim of maximising shareholder value” and will continue in parallel with the progression of development studies and has the potential to influence the optimal development plan for Gonneville.”
