A metallurgical discovery eliminates a high-cost process from Chalice’s flowsheet, greatly reducing Gonneville’s technical risk and operating costs.
Chalice Mining shares are up nearly 30 per cent this morning after the company made a metallurgical breakthrough at its multi-element Gonneville project in WA.
The ASX-listed developer has turned its testwork process on its head, meaning that two saleable copper and nickel concentrates could be made from ore of any grade across the Gonneville resource.
That means Chalice can remove an expensive hydrometallurgical plant from its flowsheet, thereby curbing Gonneville’s technical risk and operating costs.
Chalice was planning to spend $260 million on the plant, but the testwork findings – combined with a downsize in Gonneville’s initial production profile – is expected to save the company $510 million in capital costs.
Managing director Alex Dorsch said the findings would simplify and accelerate Gonneville’s development pathway.
“The ability to produce a saleable nickel concentrate across the grade spectrum of the entire Gonneville resource is a major breakthrough,” Mr Dorsch said.
“This is the step change we have been hoping for over the last two years.”
Chalice was originally eyeing a two-year construction timeline at Gonneville, but Mr Dorsch believes the new findings could shorten that to around 18 months.
The company continues to target first production before the end of the decade, with the margins for a bulk-pit open mine plan looking much more attractive following today’s announcement.
Beyond the testwork optimisations, Chalice has discovered that using a conventional carbon-in-leach process can recover more palladium and gold from Gonneville’s flotation tails.
This process is expected to fall under the recently legislated Critical Minerals Production Tax Incentive, which means the company could secure a 10 per cent tax offset against its leach operating costs.
The discovery will no doubt play a central role as Chalice prepares to release a long-awaited pre-feasibility study (PFS).
The final report should reach investors by mid-2025, with more testwork and fine-tuning expected between now and the paper’s release.
There are also environmental submissions in progress as the explorer works towards a final investment decision in 2027.
Speaking with investors this morning, Mr Dorsch said the latest testwork marked a major reset for the Gonneville project as the company progressed its PFS.
“There were not many people at the outset that thought we would ever be able to upgrade a 0.15 per cent nickel head grade to sale level.
“We've really proved them wrong, and it's a credit to the team.”
Marketed as the largest palladium-nickel-copper development in the western world, Chalice’s Gonneville project is located 70 kilometres from Perth on company-owned farmland.
Geologists uncovered precious and critical minerals across the Gonneville deposit back in 2020, informing a 2023 scoping study that outlined plans for a new low-carbon critical minerals mine.
Chalice secured major project status from the federal government last year, just one month after the state government announced it would aid the developer through the approvals process.
The Tim Goyder-chaired company is expecting to spend between $1.6 billion and $2.3 billion to move Gonneville into production.
Chalice shares are trading 28.33 per cent higher for $1.54 each at 11:33 am AWST.
