Chalice Mining (ASX:CHN) outlined progress on its Gonneville discovery near Perth, describing the project as a large-scale palladium, nickel and copper resource with additional gold, platinum and cobalt. The company said the past year was “transformative” following the release of its pre-feasibility study (PFS), which management framed as a major step forward after a pullback in nickel and palladium markets and earlier challenges in finalizing a workable processing flowsheet.
Project scale and operating outlook
Management described Gonneville as a globally significant palladium project, citing an initial 23-year open-pit mine life and indicating that the planned mine would exploit only about half of the current resource over that period. The company presented annual production expectations of around 220,000 ounces of precious metals per year plus about 16,000 tonnes of base metals, which it also expressed as roughly 450,000 ounces per year of palladium equivalent (by value) or about 65,000 tonnes per year of copper equivalent.
PFS metrics and sensitivity to metal prices
Using base case prices, Chalice cited PFS financial metrics including an AUD 1.4 billion NPV, a 23% internal rate of return (IRR), and a payback period of less than three years. The company added that for every $100 per ounce increase in the palladium price, the project NPV increases by approximately $250 million.
Chalice also provided an update based on spot prices, which it said were roughly 30% to 70% higher than the PFS base case assumptions. With palladium cited at about $1,700 per ounce versus a $1,300 assumption in the study, management said the “spot” NPV would be around AUD 3 billion and the IRR about 38%. At those spot prices, Chalice estimated the project could generate about $420 million of free cash flow per year, with payback periods on both development stages in the range of approximately 1.5 to 1.8 years.
The company noted it runs NPVs at an 8% discount rate and suggested there may be an opportunity to lower the weighted average cost of capital over time given expectations for low-cost financing.
Development plan, reserves, and location advantages
Chalice described a two-stage development approach, beginning with a 5 million tonne-per-annum concentrator and an initial low strip ratio of 1.2. Management said the company has spent AUD 250 million de-risking the asset and cited a large resource base, including 17 million ounces of contained PGMs, 960,000 tonnes of nickel, and 500,000 tonnes of copper, plus cobalt.
The company said the PFS resulted in a significant increase in reserve confidence, with about half of the resource now converted to proven and probable reserves. It also highlighted the project’s location about 70 kilometers from Perth and said it has received “major and strategic project status” support from government. Chalice added it owns 26 square kilometers of farmland covering the proposed mine site and infrastructure footprint, which it characterized as a de-risking milestone.
Looking ahead, Chalice said it is funded to a final investment decision (FID) in the first half of 2028 and positioned the project timeline toward becoming Australia’s first PGM mine in 2030. The company said near-term priorities include permitting, securing offtake arrangements, and assembling the construction funding package.
Metallurgy and flowsheet changes
A major focus of the presentation was metallurgy. Chalice said it previously struggled to produce a saleable nickel concentrate and was “hammered” in 2023 after indicating it might need to add a pressure oxidation (POX) plant to the nickel circuit. Management said that plan has been scrapped after further work “got the float to work,” resulting in an approximately 8% nickel concentrate across the grade range.
Chalice said it has spent about AUD 15 million on metallurgical test work and stated that external experts have reviewed the results and agreed the flowsheet is “proven” and “demonstrated.” The company said it expects strong payability on a “rich copper PG” concentrate, while describing nickel concentrate payability as “not so good,” around 75% on average. It also highlighted a leach circuit to recover cyanide-soluble palladium after flotation.
Funding and exploration priorities
Chalice reported a cash and investments balance of AUD 71 million and said it believes it is funded through to FID. It also discussed government and lender interest in critical minerals funding, stating that Stage 1 capital is estimated at AUD 820 million and that it expects to fund roughly 60% to 70% of that with debt, including potential export credit agency participation. The company also referenced interest from lenders and hybrid finance providers, as well as interest in “secondary metals or minor metal streams.”
On exploration, Chalice said it continues to focus on the western Yilgarn, describing it as a relatively underexplored part of Western Australia. The company said it has about seven full-time geologists and is spending roughly $5 million to $10 million on grassroots greenfields exploration.
About Chalice Mining (ASX:CHN)
Chalice Mining Limited operates as a mineral exploration and evaluation company. It explores for gold, copper, cobalt, palladium, platinum, and nickel deposits. The company has interest in the Gonneville Nickel-Copper-PGE Project and the exploration of projects located in the West Yilgarn region of Western Australia. Chalice Mining Limited was incorporated in 2005 and is based in West Perth, Australia.
