• Chalice lodges new resource at Gonneville, increasing indicated resources to 70%
  • MD Alex Dorsch says the company is focused on the long term potential of green metals discovery in the West Yilgarn region
  • St Barbara increasing its bargaining power in any Leonora consolidation play after soaring on a strong production update

Chalice Mining is buckling down for the long term at its Julimar nickel-copper-PGE project 70km north of Perth, with exploration success expected to keep growing its Tier-1 resource base after a major upgrade today.

The original resource posted at Gonneville in December contained a total 10Moz of Pd-Pt-Au, 530,000t of nickel, 330,000t of copper and 53,000t of cobalt, the equivalent of 1.9Mt of nickel or 17Moz of palladium.

The new one is slightly bigger, at 350Mt at 0.96g/t 3E, 0.16% nickel, 0.1% copper and 0.015% cobalt (0.58% NiEq or ~1.8g/t PdEq) it boasts 11Moz of 3E, 560,000t nickel, 360,000t copper, 54,000t of cobalt for 2Mt NiEq and 20Moz PdEq.

The bigger thing is the additional drilling has largely been infill designed to improve Chalice’s confidence in the resource. And that it has.

Gonneville is now 70% indicated, meaning the vast bulk of the resources could be converted into reserves for future feasibility studies.

The high grade component of the resource has also increased in scale, with 82Mt at 1.7g/t 3E, 0.21% Ni, 0.2% Cu and 0.02% Co for 4.5Moz 3E, 180,000t nickel, 170,000t copper and 16,000t cobalt.

A scoping study is still on track for this quarter, the first look at the potential economics of the proposed mine, while new drilling intersections at the Dampier target around 10km have Chalice hopeful of making a similar discovery beneath the Julimar State Forest.


The start of something big

That could be a concern. Chalice has approval to drill in those areas now.

While Gonneville is located between 30-700m deep on privately-owned farmland held by Chalice, local environmental opposition could hamper efforts to extract ore beneath the state forest.

Speaking to investors after the announcement this morning, Chalice’s well-practiced boss Alex is confident in the overall environmental benefits of the ‘green metals’ the company plans to extract and discover more along the newly identified West Yilgarn nickel-copper and PGE region.

“Obviously the area that we’re drilling on at the moment from Hartog to Dampier is within an existing mining licence or mining state agreement, so that that does allow for the extraction of bauxite minerals in that area already,” he said.

“And obviously we have the licence to everything other than bauxite in that area.

“And then I guess, secondly the history of that state forest, whilst we appreciate there are very high conservation values and very high recreational value in that area, what we think is that, you know, I guess that small scale discrete deposits or discrete mining activities through that state forest is overwhelmingly a positive for not only the environment, but also the region and the state.

“The world is … in desperate need for responsibly sourced metals, like what we have there at Julimar and I guess that those metals have a huge decarbonisation impact.”

Dorsch compares Gonneville and Julimar to the first discoveries at Kambalda in the 1960s, which yielded resources totalling into the millions of tonnes of nickel metal across the Eastern Goldfields.

While development studies are ongoing, drilling continues with four drill rigs onsite and $140 million in Chalice’s kitty to fund it, and Dorsch says discovery remains the main focus.

“Now that we know what we know about Dampier, we’re certainly getting indications here that Gonneville is just the starting point in terms of the total endowment of this region,” he said.

“There obviously needs to be some long term view applied to the likelihood of further exploration success. And obviously that’s what the company is really focused on rather than getting too obsessed about sort of what we have today.

“I think we’re taking a lens that … watch this space, and lead the drill and really transpire to define what the true scale of this mineral system is.”


Midstream on the cards

Chalice is facing a range of questions about the metallurgy of its Gonneville deposit, something that will be a key component of future studies.

Australia has never processed platinum group elements before, and Chalice will need to find a solution that captures the value of nickel, copper and PGEs to get the full benefit of its world class orebody.

Dorsch says processing and offtake strategies will be worked on over time. In his estimation Chalice is in the early stages of a five-year development process at Gonneville.

But one option being looked at is a midstream solution that could see Chalice make nickel precursor for the battery industry, bypassing the energy intensive smelting process typically used to process nickel sulphide concentrates into metal.

“There’s no point sort of going right to the end point at this stage, you know, looking all the way downstream but we are we are making iterative steps into the midstream,” Dorsch said.

“The first obvious place where the work is focusing on is basically, instead of selling a nickel concentrate to a smelter, can we process that nickel concentrate and generate a battery precursor product?

“That has a two-fold benefit. The first benefit is that we get much higher payabilities on metals in a product like that.

“The second benefit is obviously the CO2, the carbon intensity of the metal, reduces significantly if you can take out the smelting stage.”


Chalice Mining (ASX:CHN) share price today:



St Barbara up as it makes guidance at Gwalia

St Barbara (ASX:SBM) is on the radar of Raleigh Finlayson’s Genesis Minerals (ASX:GMD).

We know this because the $730 million capped gold miner has admitted as such to the stock exchange while Genesis has tied up a deal with another distressed gold miner Dacian (ASX:DCN).

SBM has ratcheted up its value after a well-timed strong production update sent its shares flying by 8.4% today.

After a year punctuated by struggles at its Simberi and Atlantic operations in PNG and Canada, which by all accounts it wants to move on from, SBM delivered 86,403oz in the June quarter to make its 275,000-290,000oz guidance range with full year production of 280,746oz.

191,459oz came from its flagship Gwalia operation, the key to any consolidation play in the Leonora district.


St Barbara (ASX:SBM) share price today: