Any doubt in the market about the quality of Chalice Mining’s emerging world class discovery at Julimar, northeast of Perth, has just been blown away with the company surprising investors Wednesday with news of a significant expansion of the original Gonneville discovery and confirmation that it is fielding a wave of inquiries from companies in Australia and around the globe about taking an interest.
Driving that offshore interest (ie American) is the Biden Administration’s recently passed Inflation Reduction Act which in reality is the single biggest financial boost to renewables worldwide, especially for the primary source of demand: batteries and electric vehicles.
Australia (along with Canada, Chile and Mexico) is well placed to benefit from this huge spending campaign because of free trade deals we have with America, arrangements which make renewables found and produced here far more attractive for the likes of GM, Ford, VW, BMW, Tesla, Mercedes, Hyundai, Toyota, Stallantis and Renault/Nissan.
In an unexpected statement from the company on Wednesday, Chalice said it “is considering securing a strategic minority joint venture partner (or partners) to assist in developing a potential mine at Gonneville.”
“Strategic interest in the large nickel sulphide endowment at the Project has increased significantly following the passing of the US Inflation Reduction Act (IRA) bill,” Chalice said.
“Several large international trading houses, downstream battery and auto manufacturers have expressed interest to date, with the recent Inflation Reduction Act bill in the United States resulting in a significant increase in inbound interest in Julimar’s large nickel sulphide endowment.
“Chalice said that at this stage, “discussions with potential partners are preliminary in nature” and the it is more focused on delivering the Scoping Study for a Gonneville mine development in towards the end of calendar 2022.
The company also revealed what some geologists and analysts had started suspecting – that the huge 350 million tonne Gonneville copper, nickel, PGE, gold and cobalt deposit is much, much larger than first thought.
“Drilling further north has now confirmed the Gonneville Resource, discovered in early 2020 on Chalice-owned farmland, is just a small part of the Julimar Complex, Chalice said on Wednesday.
“The complex is a very large mineralised system, which Chalice believes is capable of hosting multiple discrete nickel-copper-PGE (palladium, platinum and gold) Ni-Cu-PGE deposits, as evidenced by multiple sulphide drill intersections in wide-spaced drilling to date over around a 10km of strike length
“Exploration activities are continuing across the 30-kilometre long Julimar Complex, with four diamond drill rigs currently drilling across the 10km long Hartog-Baudin strike length and two rigs continuing resource definition drilling at the Gonneville PGE-Ni-Cu-Co-Au Deposit.”
Chalice said it recently made an important breakthrough in exploration at the project, with the previously elusive northern extension of the Gonneville Intrusion interpreted at depth in an effective 2D seismic survey.
“Previous drilling in this area (at the Hartog Prospect) had failed to intersect the prospective mafic- ultramafic horizon, which drilling has now confirmed to be faulted ~650 metres to the west-north-west.
“This new Hartog segment of the Julimar Complex can now be targeted with follow-up drilling, providing a substantial pathway for growth in the Resource, which remains open along strike and at depth.
Drilling at Gonneville has confirmed the results of recent 2D seismic survey data and confirmed the continuation of the intrusion to the northwest beneath the Julimar State Forest.
The drilling work in the area has extended the mineralised zones 600 metres past the resource, with up to 0.7% nickel, 0.9% copper and 0.04% cobalt intersected. The zone is open at depth and work is continuing to better identify that.
“The vast majority of the complex is still unexplored and lies beneath a small portion of the Julimar State Forest, a 29,000-hectare area of native vegetation. State forests are managed by the Department of Biodiversity, Conservation and Attractions for a range of values including conservation and other land uses.”
“Exploration is continuing rapidly on broad spacing along the complex, targeting new high-grade Ni- Cu-PGE sulphide deposits which could add considerable value to a Gonneville mine, or potentially warrant a separate mine development.
“It is also possible that different styles of mineralisation could be intersected along the complex, potentially contributing to significant long-term value-creation that a world-class mineral district can create. “
Assays for many of the drilled holes trying to define the extension of the Gonneville prospect and other areas, are still to be confirmed by Chalice and the September quarter report will probably see many of those revealed.
But some assays from holes drilled reveal high values of nickel, copper and PGE minerals at depth – below 570 metres to around 900 metres – indicating a possible deep underground mine at some future stage, once plans for the first mining operation are finalised.
Chalice shares rose 5% to $4.17 after touching an intraday high of $4.45.
