CHN - Chalice Mining

[Sean K]

I'm for it and will ratify it when it crosses my desk.

I'm sure Mr Market will appreciate that support.

I still don't get the raise when there's that much in the bank. Perhaps they'll explain it at some point to the sophisticated investors.

 

[finicky]

Perhaps they'll explain it at some point to the sophisticated investors

That would leave you out of the picture then ?
.. runs away

 

[Sean K]

That would leave you out of the picture then ?
.. runs away

Let me know the details when you get the call from Timmy G.

 

[finicky]

? On the blower now, he better have the right answers ..

 

[finicky]

So pretty much a done deal: turns out to be $70m @ $7.30 plus a $10m SPP after which they expect to have $150m in kitty. More than I thought. Looks mostly for drilling Gonneville to completion of a scoping study and prefeasibility plan. But also Julimar complex and wider regional drilling. They also admit that it is to be in a stronger position for a jv consideration.

 

[Sean K]

Even though I see this eventually developing into a huge mine, worth lots of dollars one day, I'm very happy to have got in around the recent lows and bailed with beer money.

This is going to take years to get into production from here with an astronomical capex. God knows how they're going to separate all the minerals in this deposit and turn what is a lot of low grade dirt into high grade metals.

I'd be suspicious of management at this stage too. Just a few weeks ago they were 'fully funded through to mid-2024', but now they're mining the market. Maybe a cunning strategic play to keep predators at bay, or handy stockpile of cash for management bonuses.

I will reconsider when the World goes into depression after China invade.

 

[finicky]

Pretty much agree with all that but could miss out on a major entering a jv with them.
I suppose you could argue that they probably really were funded through to mid 2024 with the exploration schedule that they had at that time - now to be intensified. But I also suspect we were meant to infer that a CR was not in the wings. They're all salesmen. I think this CR can only be good for current shareholders.

Held

 

[Sean K]

Pretty much agree with all that but could miss out on a major entering a jv with them.
I suppose you could argue that they probably really were funded through to mid 2024 with the exploration schedule that they had at that time - now to be intensified. But I also suspect we were meant to infer that a CR was not in the wings. They're all salesmen. I think this CR can only be good for current shareholders.

Held

Yep, the JV partner announcement will be huge. Could put a rocket in the train.

And yes, they were fully funded.

I've looked back at their last few financials to try to work out how they calculate management bonuses but couldn't find a clause that said they'd issue more shares to themselves if they mined the market unnecessarily. In fact, there doesn't seem to be any measurement bar for incentive shares at all. Maybe it's like most miners. Keep breathing and we'll load you up.

 

[finicky]

Chalice hit an intraday low of 6.77
Some satisfaction that seven directors participated in the 7.30 SPP. A few by meaningful amounts of $30,000.
But to refresh memories the last placement raising @ $6 in May 2022 white-anted the supply/demand dynamic and was immediately followed by a brutal share price deterioration by the June to $3.50!
Can't see too much crumbling in the current daily/weekly charts yet?

Held

 

[Dona Ferentes]

trendology ?
familiarology ?
nearology ?

Chalice Mining has executed an agreement with Northam Resources* whereby Chalice may earn up to a 70 per cent interest in Northam’s exploration licence holding, located east of the Gonneville Deposit in WA.

The region is almost entirely unexplored but is considered highly prospective for magmatic nickel-copper-PGE sulphide deposits, Chalice said.

Chalice has paid Northam a $150,000 cash deposit to allow the commencement of due diligence and may earn up to a 70 per cent JV interest in the project in two stages.

* Northam appears to be unlisted

 

[Knobby22]

trendology ?
familiarology ?
nearology ?

Chalice Mining has executed an agreement with Northam Resources* whereby Chalice may earn up to a 70 per cent interest in Northam’s exploration licence holding, located east of the Gonneville Deposit in WA.

The region is almost entirely unexplored but is considered highly prospective for magmatic nickel-copper-PGE sulphide deposits, Chalice said.

Chalice has paid Northam a $150,000 cash deposit to allow the commencement of due diligence and may earn up to a 70 per cent JV interest in the project in two stages.

* Northam appears to be unlisted

Interesting

 

[Sean K]

Interesting

CHN will be interesting again when it has a 4 in front of it.

This is starting to look like a lifestyle company, not a dedicated developer who wants to build a mine.

 

[houtman]

CHN will be interesting again when it has a 4 in front of it.

This is starting to look like a lifestyle company, not a dedicated developer who wants to build a mine.

I sold the last of mine early in the new year.

While doing my "where are they now" look back at my FY trades, with CHN I see that prices have dropped for their commodities.

Nickel was US$29k, now $21k
Platinum was US$1078, now $953
Palladium was US$1788, now $1284
Copper steady.

I know they use long term pricing, but the sizzle that was in the Ni price has been dowsed.

As you say, a massive project but a long way to go.

When they reported the initial discovery hole I had hoped for a higher grade deposit.
They may still find one.

 

[Sean K]

I sold the last of mine early in the new year.

While doing my "where are they now" look back at my FY trades, with CHN I see that prices have dropped for their commodities.

Nickel was US$29k, now $21k
Platinum was US$1078, now $953
Palladium was US$1788, now $1284
Copper steady.

I know they use long term pricing, but the sizzle that was in the Ni price has been dowsed.

As you say, a massive project but a long way to go.

When they reported the initial discovery hole I had hoped for a higher grade deposit.
They may still find one.

Using NiEq was cunning at the time, but unfortunately Indonesia was able to switch on 10s of 1000s of tns production at short speed to capitalise. Even though it's mostly laterite, it dumped the price. That is supposed to change around 2026 ish.

The problem with this deposit is that it's going to take some significant capex to separate the different metals. There's only a hand full of companies that can do it. CHN is not one of them.

There's no doubt though that this will end up being a very, very large hole in the ground. If The Voice allow it...

 

[finicky]

@Sean K we can only hope that your Austeyr is not handy when in such an intemperate frame of mind.

When they reported the initial discovery hole I had hoped for a higher grade deposit.

Me too - I have never got the level of the market excitement over such mediocre looking grades (to a complete amateur)

I have been a bit apprehensive at times about a major ABC type correction setting in and Sean K's target is conceivable if that's what is happening. But the wildcard is in the pack - the one that management keeps dangling to keep us attached. That being the possibility of an alliance with a financing major to develop Gonneville. This would likely come with an immediate monetary reward for shareholders if Chalice repeats what it has done more than once in the past. One thing I won't deny them is the ability to make a deal - just look back over past deals where they have flogged off an asset that they've developed - it was one of the qualities that got me into the company. Or look at the canny way they've raised capital before a severe price correction sets in - how glad are shareholders now that CHN raised @ 7.30? That's happened at least once before - although admittedly, the raises must also have catalysed the subsequent price crashes.

Held

MONTHLY

 

[Sean K]

@Sean K we can only hope that your Austeyr is not handy when in such an intemperate frame of mind.


That being the possibility of an alliance with a financing major to develop Gonneville. This would likely come with an immediate monetary reward for shareholders if Chalice repeats what it has done more than once in the past. One thing I won't deny them is the ability to make a deal - just look back over past deals where they have flogged off an asset that they've developed - it was one of the qualities that got me into the company.

It's a beautiful day in Melbourne, but my Bombers were crap last night so I might still be unsettled.

IMO, the next opportunity in this will be when it comes back in price and a major decides to pounce with a 50% + TO offer. Someone will be opportunistic and not paying overs at this stage. Just a guess though...

Looking forward to seeing a capex. This flowsheet looks like $2b to me...

 

[finicky]

My fine tuned desktop capex estimation came out at 'humungous' - way out of CHN's league agreed, but they're addressing that if you take them at their word, which is probably not a great idea for an ASX explorer.
Slide reminding of two capital returns to shareholders since 2006 as well as the Falcon Metals (FAL) spinout. Tim Goyder's not running things now though.

Held

 

[Sean K]

My fine tuned desktop capex estimation came out at 'humungous' - way out of CHN's league agreed, but they're addressing that if you take them at their word, which is probably not a great idea for an ASX explorer.
Slide reminding of two capital returns to shareholders since 2006 as well as the Falcon Metals (FAL) spinout. Tim Goyder's not running things now though.

Held

View attachment 159902

My precision laptop capex came out at frighteningly humongous. Couldn't not help to follow Goyder's dart throws.

 

[Sean K]

Suitors lining up for $2.3bn nickel explorer and developer Chalice Mining are preparing to lob their final offers by August 21, sources say.

The company’s main project is its Julimar nickel and copper project in Western Australia’s Avon region, 70km northeast of Perth.

The group’s Gonneville deposit is one of the world’s largest nickel sulphide discoveries.

It reported a net loss of $33.7m for the six months to December and is looking for a backer to fund its development through Standard Chartered.

But some believe the process could result in an acquisition of the company as a whole.

Sources say Chalice is open to several options including a partial sale of about 20 per cent of the group, or 100 per cent.

 

[Dona Ferentes]

More news on Tuesday .... of the discovery of what appears to be a whole new area of significant mineralisation.

So far, Chalice has reported a total resource at Gonneville of 560 million tonnes @ 0.88g/t 3E (palladium, platinum, and gold), 0.16% nickel (Ni), 0.09% copper (Cu), and 0.015% cobalt (Co). However, the company indicated in the latest announcement that the resource will almost certainly be increased as a result of the latest drilling.

"Exploration activities are currently focused on wide-spaced step-out and resource definition drilling at the Gonneville Deposit, with four diamond drill rigs operating,"

"Drilling is currently testing the depth extent of the Deposit well beyond the limit of the current Mineral Resource Estimate," Chalice said.

News of the new assays came less than a week after Chalice revealed in its June quarterly report that drilling had exposed the potential for Gonneville to be bigger, wider, and deeper, with no end to the mineralisation being outlined to the north of the find and at depth beyond 800 meters.

On Tuesday, Chalice released a surprise update which revealed the company had found new areas of mineralisation on top of the earlier discoveries.

"Exceptional new zones of high-grade sulphide mineralisation intersected in step-out drilling at the Gonneville Ni-Cu-PGE Deposit (that's nickel, copper, PGE palladium, platinum, and gold – and a bit of cobalt)," the company stated.

Chalice said that wide-spaced step-out drilling at the 100%-owned Gonneville Project has intersected new wide high-grade Cu-PGE zones ~900 meters down-plunge of the current Gonneville Resource. These zones are wide open and appear to be associated with a gabbro unit (a type of rock) that is not present in drilling up-dip, opening up a highly prospective new horizon for exploration.

"Step-out drilling shows the Gonneville Intrusion remains ~500 meters thick as it dips to the west-north-west – significant potential to further increase the mineralised footprint of the Deposit."

"The Gonneville Intrusion remains ~500m thick in the deepest intersection to date, and hence there is considerable potential to further expand the mineralised footprint of the Deposit," Chalice said.

"Wide-spaced drilling is assessing the potential for large-scale, high-grade sulphide zones at depth which could potentially add material value to the Project through early underground mining. The drilling is also aiming to define new Inferred Resources at the northern end of the Deposit. Promising new results have also been received from the previous phase of regional exploration drilling at the Hooley Prospect, with follow-up drilling planned in H2 2023.