The challenge the company has – and one managing director Alex Dorsch admits is a tough problem to have – is how to define economics for a project that continues to get bigger.
The latest resource for Gonneville, announced in March, is 560 million tonnes at 0.88 grams per tonne palladium, platinum and gold (3E), 0.16% nickel, 0.09% copper and 0.015% cobalt, or 0.54% nickel equivalent or 1.7gpt palladium equivalent for contained metal of 16 million ounces of 3E, 860,000t of nickel, 520,000t of copper and 83,000t of cobalt, or 3Mt of NiEq or 30Moz PdEq.
The higher-grade sulphide component of the resource now comprises 127Mt at 1.6gpt 3E, 0.2% nickel, 0.18% copper and 0.017% cobalt, or 0.9% NiEq or 2.7gpt PdEq for 5.8Moz of 3E, 230,000t of nickel, 210,000t of copper and 20,000t of cobalt, or 1Mt NiEq, up 27%, or 2.7gt PdEq.
“We’re throwing the kitchen sink at it,” Dorsch told analysts and investors on a pre-Diggers & Dealers site visit to Julimar last week.
“We’re still trying to find the limits of the system.”
Chalice has selected two development cases for the scoping study into an open pit mine at Gonneville.
The resource pit shell is about 1.9km by 1.4km and to a depth of roughly 600m.
Chalice has considered throughput rates of everywhere from 2Mt per annum through to 30Mtpa and will provide multiple scenarios with the scoping study.
Dorsch said the company would likely stage the processing plant and suggested a potential 5-10Mtpa start-up rate which could be doubled later.
“The approach we’re taking is sort of walk before we run,” he said.
Dorsch said the aim was to maximise value, minimise risk and maintain optionality.
A strategic partnering process is underway and a data room is open.
Dorsch said the process was not driving the scoping study but could drive the future prefeasibility study.
Interested parties have been assessing the data for the past two months.
“We’re just starting to get feedback now,” Dorsch said.
Interested parties include carmarkers, cathode and battery manufacturers, trading houses and mid and large-cap miners.
“Basically the entirety of the mining industry is in there,” Dorsch said.
Bell Potter Securities analyst David Coates believes BHP, Anglo American, Glencore and Sibanye-Stillwater would all be attracted to Gonneville.
Chalice is targeting wrapping up the process by the end of this year.
The resource is defined to a depth of about 800m and remains open.
Last week, Chalice reported that it had hit wide high-grade copper-platinum group element mineralisation roughly 900m down-plunge of Gonneville.
The standout hit was 54.2m at 3.6gpt 3E, 0.21% nickel, 0.39% copper and 0.02% cobalt, or 1.7% NiEq from 1132.8m, including 49m at 3.9gpt 3E, 0.22% nickel, 0.43% copper and 0.02% cobalt (1.8% NiEq), including 9m at 10gpt 3E, 0.24% nickel, 1.2% copper and 0.02% cobalt (4.3% NiEq).
The zones are open and appear to be associated with a gabbro unit not present in up-dip drilling, which Chalice said opened up a highly prospective new horizon for exploration.
The company said there was significant high-grade underground potential beyond the 600m-deep pit shell.
Early underground mining options targeting high-grade zones from a depth of about 400m to more than 1100m, in parallel with open-pit mining, will now be investigated to determine high-level economics and the optimal drill-out strategy.
Dorsch said the scoping study was too far advanced to include the underground option.
“We’re not going to hold that back,” he said, adding that the potential underground would be incorporated into a scoping study revision or PFS.
“We’ll look at the analysis and make that call.”
Dorsch said the “guts” of the system was potentially deeper than current drilling.
“An early decline might make sense,” he said.
“The grade is driving us to consider that.”
The Gonneville resource is just 2km of the 30km-long Julimar Complex.
Gonneville was a rare first-hole discovery in March 2020 though Dorsch said it was an obvious place to drill due to the strength of the magnetic anomaly.
The discovery hole returned 19m at 9.6gpt 3E, 2.6% nickel, 1% copper and 0.1% cobalt from 48m.
“Gonneville was a very strong magnetic anomaly but there are a number of other strong magnetic anomalies along the 30km,” Dorsch said, acknowledging the company had also hit mineralisation where there was no magnetic response.
Hooley, in the Julimar State Forest, is just 5km to the north of Gonneville.
Dorsch said Hooley had identical geology to Gonneville.
The latest results included 33.5m (estimated true width 9m) at 1.4gpt 3E, 0.18% nickel, 0.21% copper and 0.01% cobalt, or 0.8% NiEq, from 358.5m, including 22.8m (ETW 6.8m) at 1.9gpt 3E, 0.24% nickel, 0.29% copper and 0.02% cobalt, or 1.1% NiEq, from 362.2m.
“It’s very, very exciting,” he said.
More broadly, Chalice now holds 8000sq.km of the newly defined West Yilgarn nickel-copper-PGE province.
The company plans to drill 10 targets later this year, subject to approvals and cropping access.
“They typically do cluster in camps, these types of deposits,” Dorsch said.
