‘What we’d been hoping for’: Chalice Mining’s shares up 23 per cent on Gonneville metallurgical ‘breakthrough’

Chalice Mining’s shares went on a tear to start the week after it told investors a more efficient way to extract and separate the cluster of commodities from its proposed mixed metal mine on farmland near Toodyay had been discovered. A metallurgical breakthrough at the Gonneville platinum group element-nickel-copper-cobalt project means two saleable concentrate products can be created across the entirety of Gonneville’s mineral resource with lower operational risk and less cost, Chalice said on Monday. Chalice no longer plans to use a hydrometallurgical process and instead will focus on “simple, conventional process techniques” that have been optimised for Gonneville after “two years” of tinkering by the mining hopeful’s technical boffins. Additional palladium and gold had also been found in the waste product from carbon-in-leach testing, which could give Chalice an extra free kick. “Leaching of palladium from flotation tails and oxide is expected to classify as eligible expenditure under the critical minerals production tax incentive . . . therefore a 10 per cent tax offset should apply to these processing costs,” the company stated. “Project margins for a bulk open-pit mine plan are expected to improve significantly relative to the 2023 scoping study.” That August 2023 scoping study underwhelmed investors and combined with sagging nickel prices dragged the miner’s share price down more than 80 per cent. But there was a reprieve on Monday as Chalice’s shares surged 32 per cent to $1.58 in morning trade, before retreating slightly to finish the day up 22.9 per cent at $1.48. Managing director Alex Dorsch heralded the metallurgiacal shift as a “major breakthrough” that “fundamentally simplifies” Gonneville. “This is the step change we have been hoping for over the last two years,” he said. “Removing the need for a hydrometallurgical process materially reduces both the capital and operating costs and, together with the optimisations being introduced to the flowsheet, is expected to deliver a significant improvement in project margins across all high-grade and low-grade phases of a bulk open-pit mine plan.” “The simplified flowsheet also has much lower risk profile and gives the project a smoother and more rapid pathway to development.” Chalice is targeting a completed pre-feasibility study for Gonneville by the middle of this year. The business had $79.9 million left in the bank by the end of 2024, burning through about $3.9m during the December quarter. Gonneville attained ‘major project’ status from the Federal Government in October.