Chalice Mining is after a $100 million equity top up to help finance the company’s big push at its exciting Julimar prospect in WA towards a massive new global rated mining operation.
The company said Tuesday it was offering around 16.7 million shares to big end of town investors at $6 a share or an 11% discount to the last close of $6.67.
It last raised $100 million from shareholders in late 2020 and has spent much of that discovering and proving up the huge Gonneville discovery at Julimar.
Chalice said if the funding is completed, it will have $149 million on hand to spend on the next set of milestones aimed at getting the Gonneville mine started.
Chalice said the raising provide sit with around 18 months of funding for continued exploration at Julimar and across the West Yilgarn, as well as substantially advancing the pre-feasibility study for the Gonneville ‘starter mine’.
It will help fund the estimated $33 million cost of the continuing exploration, step-out and infill drilling at Gonneville, with updated Mineral Resource Estimate targeted for early July.
The current campaign at Gonneville “aims to increase confidence level of in-pit resources, define resources in an underground category and define the overall extent of the mineral system.
The new raising will finance the “completion of the Gonneville scoping study, and substantially advancing the subsequent pre-feasibility study for an initial mine development.” That is estimated to cost around $48 million.
A further $11 million will be spent on more drilling at other prospects at Julimar, such as Hartog where the campaign has already started.A further $16 million is slated to be spent on work elsewhere in the West Yilgarn both to the north of Julimar and in the southwest of WA.
Gonneville’s first resource estimate issued late in 2021 stands at 330 million tonnes of ore, grading 0.94 grams to the tonne of palladium, platinum and gold (3E), 0.16% nickel, 0.10% copper and 0.016% cobalt (roughly 0.58% nickel equivalent or around 1.6 g/t palladium equivalent).
That’s equal to 10 million ounces of 3E metals, 530,000 tonnes of nickel, 330,000 tonnes of copper and 53,000 tonnes of cobalt (roughly 1.9 million tonnes nickel equivalent or around 17 million ounces of palladium equivalent).
The new estimate in July will expand that thanks to further drilling deeper and outside the known area of mineralisation which seems to hold the potential for a significant upgrade.
Meanwhile work on the Hartog-Dampier prospect to the northeast of Gonneville is stepping up after delayed approvals for the new work were finally issued last week.
Drillng started at Hartog in January and had explored eight of 70 planned sites as of late April but Chalice’s access was restricted to existing tracks only in the state forest area.
In December, the company was granted a permit to explore further into the forest but encountered five community appeals to carry out the activities, including from the Avon and Hills Mining Awareness Group, and the Shire of Toodyay.
Those complaints have been settled and Chalice will now expand its campaign at Hartog and Dampier with more “low-impact” work in the area.
“Chalice’s drilling will not involve any mechanised clearing of vegetation and strict environmental management measures will be used to minimise impact to the environment, including the use of low-impact, small-footprint diamond rigs and comprehensive flora, fauna and cultural heritage monitoring,” the company said in a statement issued last Friday.
“These small drill rigs will navigate around trees and maximise the use of existing cleared areas in order to keep disturbance to a minimum.”
Chalice said the drill program would provide further insight into Julimar’s potential as a future ‘green metal’ supplier.
“The drill program is designed to provide an initial test of the potential for green metals, including nickel, copper, cobalt, platinum and palladium, in the area,” the company said.”
This fund raising is more important that it first looks. It is the best sign of the confidence Chalice has about the forthcoming updated resource estimate for Gonneville and other areas.
Chalice would not have risked upsetting big investors if it hadn’t been very confident of the data in the forthcoming statements and their strength.
