Boom explorer Chalice Mining (ASX:CHN) is in something of a funk, the sort of run you’d might call the yips if it were a key forward.

The company kicked plenty of bags for its investors over the first 20 months after the discovery of the Julimar nickel-copper-PGE province in March 2020, rising from 16c to almost $10.50 in the immediate aftermath of a maiden resource announcement last year.

But interest has waned in 2022, with the stock cratering 20.68% year to date amid frustrations about delays from environmental appeals against its plans to drill beneath the Julimar State Forest.

Those will be key metres of core if the clearance comes through. Both Chalice and analysts covering the stock reckon the best targets along the 26km stretch the makes up the Julimar complex lie beneath the trees.


Chalice unlocks underground potential at Gonneville

Until then Chalice bag holders can take solace in drilling beneath the Gonneville resource, where an upgrade is due before an initial scoping study this year on the economics of what is expected to be one of Australia’s biggest new nickel mines and its first PGE mining operation.

The high grade portion of the resource comes in at 74Mt at 1.8g/t platinum-palladium-gold mix, 0.22% nickel, 0.21% copper and 0.021% cobalt for a 1% nickel equivalent grade.

A string of new high-grade results reported by Chalice today of more than 0.6% NiEq grade have extended the known mineralisation 260m beyond the Gonneville pit shell, demonstrating its potential to deliver an underground operation.

They include headline hits of 3m at 10.9g/t 3E, 1% Ni, 1% Cu and 0.06% Co (5.6% NiEq) from 653m, 16.4m at 5.4g/t 3E, 0.5% Ni, 1.3% Cu and 0.03% Co (3.4% NiEq) from 667.9m and 9.1m at 4.4g/t 3E, 0.7% Ni, 0.3% Cu and 0.04% Co (2.6% NiEq) from 631.9m.

“Notwithstanding the district-scale opportunity that exists along the >30km Julimar Complex to the north, these latest drill results from Gonneville have reminded us of the obvious growth potential just at Gonneville itself,” Chalice MD Alex Dorsch said.

“Targeted drilling outside the November 2021 Mineral Resource pit shell has intersected extensive intervals of high-grade mineralisation that will be included in our next Resource update, which is on track to be delivered in June.

“This bodes well for the potential to expand the current high grade in-pit Resource.

“One of the key emerging developments at Gonneville is that the high-grade extensions we are delineating at depth continue to confirm the emerging underground potential which is likely to be a key growth avenue for us into the future. Importantly everything we drill at depth continues to remain open.”


Underground thunderground

Not only would underground resources demonstrate the long-life potential of the Gonneville deposit — before even knowing what the other 93% of the Julimar complex holds in store — they would bring a number of benefits.

Underground mines tend to be less intrusive than open pits and easier to get the community on board with, a not insignificant point given Chalice is drilling in farmland just 70km north of Perth.

They are also cleaner and typically generate fewer CO2 emissions than open cut mines.

ESG and emissions intensity will be big focuses of future mining proposals, especially for buyer of the ‘green metals’ Chalice plans to mine.

All up assay results have been received for 78 holes drilled at Gonneville which weren’t included in the last resource update in November last year, with another 55 on the way for holes drilled at Gonneville and Hartog, where Chalice has drilled eight diamond holes on low priority targets from existing cleared tracks and roads within the State Forest.

“The indications from our recent drilling are that Gonneville has the potential to be a very long life open-pit and underground mine, without taking into consideration anything we may find at our exciting targets along the Julimar Complex to the north,” Dorsch said.

“Our drilling to the north is still restricted by access constraints which we hope are resolved soon, however we are also very excited to see tantalising indications of an emerging mineralised system at the Hartog target, with several narrow intervals of ortho-magmatic nickel-copper sulphides observed in the right mafic-ultramafic rocks in recent drilling.

“This is an exciting development and the recent results reinforce the potential of the northern targets, which we plan to drill as our exploration effort expands.”


Resources fall on down day for market

While Chalice shares rose 2.3% it was a tough day for the rest of the big resources stocks, with poor market sentiment and China’s covid lockdowns weighing on metals.

The S&P ASX 200 Resources index was down 0.64% at 3.40pm AEDT today, clawing back early losses as big iron ore miner Rio Tinto (ASX:RIO) turned green.

Chalice was joined on the winner’s list by fellow PGE metals stock Zimplats (ASX:ZIM), which owns a network of platinum, palladium and other platinum group elements mines in Zimbabwe.



Monstars share price today: