Chalice Mining Limited: Could A New Flow Chart Reverse Chalice's Falling Fortunes?
- Noel Ong
- 4 days ago
- 10 min read
The Chalice Mining Limited (ASX:CHN) narrative has centered around the Julimar discovery since early 2020. I would suggest that this discovery might have sparked two years of prosperity for small cap companies.
Julimar, now better known as Gonneville (Figure 1), is a discovery of platinum group elements (PGEs), nickel, copper, cobalt, and gold, located just 70km north-east of Perth, near a town called Toodyay.
Figure 1: The Gonnevelle wheatbelt scenery. (source: Chalice Mining Limited)
The Chalice Mining journey since the 2020 discovery has gone from being the trailblazer to one that is now struggling for a new identity. Chalice was a favourite of the ASX small caps, with support coming from the retail and the institutional end. Raising money was not an issue, and management was praised for the innovation in making the discovery.
Pricing sentiment for PGE (Platinum Group Elements), nickel, and copper was strong, and the general market sentiment for the company was strong in the market. In the early days, there were rumours of the grade of the deposit being sub-economical; hence, comments started to circulate that the processing cost would not be friendly to being a profitable business.
History will show that the scoping study put an end to the speculation, and the share price chart in Figure 2 clearly shows what the market thought of the study. You can see the double dip in the share price chart, and that kind of indicated the whole market speculation process.
I felt that this was worth a review because when I was at the Future Facing Commodities Conference in Singapore, I listened to the Chalice presentation and was very surprised at the messaging of the new Flow Sheet. I am curious if this could be the turning point for Chalice.
The chapters below will help readers move around this review:
1.0 History
Over the last five years, the project has gone from being the darling of the industry to one that has had serious doubts about its economic viability, and the company is now trying to reverse the negative sentiments that have developed. As you can see below in Figure 2, the share price journey will give readers a great understanding of the journey. The drastic decline in share price came about when the company released its scoping study that showed an estimated higher capital cost and a longer time for first production.
In the early days post-discovery, I had many conversations with industry participants, and the general consensus was that the numbers may not stack up. The release of the study confirmed this narrative, and the broader market was spooked and started the share price downfall.
Figure 2: The Chalice Mining Limited share price chart as of 5th April 2025. (source: commsec)
2.0 The New Chalice Mining Story
At the Future Facing Commodities conference in Singapore, I listened to the Chalice Mining presentation, and it looks like there is a new phase of development for the Gonneville project.
Chalice Mining Limited (ASX:CHN) is now positioning itself with the new phase at the heart of the global energy transition with its flagship Gonneville Project. The Gonneville project is being described by Chalice Mining as the largest undeveloped palladium-nickel-copper resource located in the world’s best mining jurisdiction—Western Australia's Wheatbelt region (Figure 3).
The company is marketing itself as delivering a rare combination of scale, jurisdictional safety, and critical mineral exposure—precisely what investors are seeking amid today’s global supply chain and geopolitical uncertainties.
Figure 3: Gonneville PGE-Ni-Cu-Co Project. (source Chalice Mining Limited)
3.0 Resources
Over the last 5 years post-discovery in 2020, there has been no doubt about the potential of a resource; the question has always been about the grade and, hence, the ability of the company to create an economical deposit for the market.
As of the time of writing, April 2025, the project has the resources listed below:
17 Moz of contained Pd-Pt-Au (3E)
· 960 kt nickel, 540 kt copper, 96 kt cobalt
· 660 Mt @ 0.79g/t 3E, 0.15% Ni, 0.083% Cu
This deposit sits at surface (Figure 4), allowing for low-cost, shallow open-pit mining, with high-grade zones supporting strong early cash flow. A recent flowsheet breakthrough now allows for simplified, standard flotation and CIL processing, reducing capital and operating costs significantly.
Figure 4: The tier-1 scale Gonneville Resource. (source: Chalice Mining Limited)
4.0 The New Flow Sheet - The Potential Game Changer.
In my eagerness to understand where Chalice is with its business, I was pleasantly surprised by the narrative of the story. Prior to the conference, I was not thinking that there was going to be a real solution to the demise of the Chalice story, but I think the potential recovery could be in the making with the "New Flow Sheet" concept.
As I am not a metallurgist nor am I well versed with the ins and outs of the Gonneville story, looking in as a retail investor, I am thinking that this new way of processing could well be the magic pill to resurrect the fortunes of Chalice Mining.
According to Chalice, this is the game changer for their business, and that is the new flow sheet to unlock the economical value of the Gonneville deposit.
Eliminates costly hydrometallurgical steps
Reduces pre-production capex by ~A$260M
Cuts operating costs by ~A$4.10 per tonne
Enhances margins for a bulk mining strategy
The company estimates that Gonneville will be in the second quartile of the global PGE cost curve, making it one of the most competitive PGE projects in the world. Well, if this is to be true, I would think that investors need to do some serious DYOR, as if this story does turn around its ability to produce an economically viable process, this will be a nice place to put some hard-earned cash.
5.0 Why Palladium? A Contrarian Opportunity in a Changing Automotive Market
The prevailing narrative about the death of internal combustion engines (ICEs) has proven premature (Figure 5). While battery electric vehicle (BEV) adoption is flattening, hybrid vehicle production is accelerating, especially in North America, Europe, and China. These hybrids require even more palladium than ICEs, sustaining demand even as BEV growth slows.
Figure 5: Battery electric vehicle adoption has reached a plateau and demand for ICE/hybrid vehicles continues to grow (Source: China Passenger Car Association (CPCA), company data, Motor Intelligence).
If anyone has visited a car dealer that is not a sole EV car dealer, you will hear the same story being told, and that car manufacturers are moving away from full electrification. The reality has set in that the world of total vehicle electrification is not practical. Goodness me, they only realised that now? Thank goodness.
The Trump 2.0 administration in the US has repealed BEV incentives, and similar rollbacks are occurring in Europe. Hence, as the world re-equilibrates itself to a new transition of "Not 100% Vehicle Electrification," Chalice sees long-term upside in palladium as supply remains highly concentrated in Russia (45%) and South Africa (40%), both facing ageing infrastructure, geopolitical risk, and underinvestment.
Recycling volumes are dropping amid low palladium prices, amplifying potential supply deficits. Gonneville offers one of the only large-scale palladium development exposures in a safe jurisdiction, offering investors a unique hedge against geopolitical and supply chain volatility.
6.0 De-risked and Development-Ready
One of the key developments for Chalice is that since discovery, Chalice has delivered rapid progress in the form of acquiring land and regulatory approvals. In a way, the downturn in its share price is minimised as the lengthy process of gaining approvals would have created a period of "Nothing Exciting" for the market anyway.
One of the fortunate timings for the company is that they raised a lot of money prior to its share price heading south. This has allowed the company to slowly work itself into a stronger position, and if the new narrative is correct, this is a godsend.
Here is a list of Chalice's achievements:
Acquired the 22km² farmland that hosts the resource
Achieved both Strategic and Major Project Status from WA and Federal governments
Defined mine infrastructure corridors, completed TSF design, and secured strong community and regulatory support
Confirmed saleable products across all ore types and metallurgical domains
As Chalice moves into another journey to get into production, the financing discussions are expected to begin in H2 2025, with the Final Investment Decision (FID) targeted in 2027. Chalice is currently fully funded to complete its Pre-Feasibility Study (PFS) and ongoing exploration, with A$90 million in cash and listed investments on the balance sheet.
Massive Exploration Upside in the West Yilgarn Province.
7.0 The Greater Story for Chalice Mining.
While Gonneville is a standout asset in its own right, Chalice holds ~10,000km² of tenements in the West Yilgarn Province, a previously underexplored region now shown to host major mineral systems (Figure 6).
Key developments:
Over 40 copper-gold and nickel-PGE targets defined
Active drill campaigns underway at Barrabarra, Northam, and Kings
Gold-in-soil anomalies discovered (e.g., 15km anomaly at Recherche West)
Figure 6: Chalice has defined >40 Cu-Au-Ag and Ni-Cu-PGE targets in the West Yilgarn Province. (source: Chalice Mining Limited).
As the market sentiment for the company swayed away from Cahlice over the last 12 months, the creation of attention towards other projects was predicted. The company had to do something to create attention, and with the prevailing gold sentiment, it is an obvious thing to do for Chalice. The new sentiment for Chalice was the Barrabarra drilling, and you can see some of that below in Figure 7.
Figure 6: Chalice has Gold-copper focus at Barrabarra. (source: Chalice Mining Limited).
Typically, the narrative is that these targets could potentially lead to multiple Tier-1 discoveries, and Chalice is applying a modern, systematic exploration approach to unlock value across this new frontier.
Personally, the small-cap sector for the majority of the "new-age" commodity players will take time to recalibrate their position in the market. Lithium and the Rare Earth players have done their run, and they are all now narrating new stories. Chalice is the same, but as I have mentioned, the new "Flow-Sheet Story" may create some new thoughts.
8.0 Leadership with Proven Track Record
The Board of Chalice is well credentialed, so there do not look like any real issues, and in my opinion, most Boards are competent and have the sincere drive for success, which is always aligned with their own personal interests.
Hence, in a way, if the Board is listed with lots of incentives, a retail investor should be in some way comfortable that their potential investments will be aligned with the interests of the Board.
Here are the current directors of Chalice Mining:
Derek La Ferla, Non-Executive Chair – seasoned ASX 200 director, formerly with Sandfire Resources and Poseidon Nickel
Alex Dorsch, CEO – former McKinsey consultant with strong project development and capital markets experience
Garret Dixon, NED – ex-Alcoa and mining contracting executive with 30+ years in global operations
Richard Hacker, NED – strategic finance expert, former Chalice CFO
Supported by leaders across geology, metallurgy, ESG, and corporate development, Chalice has a team capable of delivering exploration success and project execution.
9.0 Sustainability at the Core
As with all astute and aspiring miners, Chalice is proactively integrating ESG into every stage of development:
Zero lost-time injuries or major safety events
38% women in workforce (above industry average)
A$10M+ contributed to local communities since 2021
Working with 70+ Traditional Owners
Commitment to no net biodiversity loss via the Gonneville Biodiversity Strategy
The company is also aligning its reporting and planning to the Task Force on Climate-related Financial Disclosures (TCFD) framework.
10.0 Investment Highlights and Upcoming Catalysts
To conclude this review, the main reason one would look at Chalice as an investment is that the company does present a rare combination of Tier-1 asset scale, financial stability, and growth potential.
Key value drivers ahead include:
✅ Palladium market recovery due to ICE/hybrid demand and constrained supply
✅ Completion of Gonneville PFS (mid-CY2025)
✅ Financing and offtake milestones (from H2 2025 onward)
✅ Exploration results across a major new mineral province
✅ Continued strong government backing and streamlined approvals
11.0 Concluding Comments From Samso
The concept of Samso Media and our content is to highlight potential investing concepts that arise because there is some angle that general media do not highlight. The mainstream content that retail investors tend to get for free is always more of highlights of the company rather than bringing to light the good, the bad, and the ugly.
For these reasons, when Samso looks at Chalice Mining now, I am thinking if this could be the catalyst or the key to Chalice halting its downward value crisis. There is a lot of bearish sentiment in the sector, and it is not necessarily at the company but more at the sector that it is in as well. The sliding nickel price and the lack of interest in the majority of the non-gold sector are definitely not helping companies like Chalice Mining.
Samso is looking for the counter-cyclical moments. As retail investors, we are always the last to know and the last to leave the sinking ship. Retail investors always take the highest risk while being told that this is the best time to take the risk.
To me, if Chalice is genuinely able to turn around the cost of processing and is able to make Gonneville work, and coupled with the trend of a rising use of hybrid vehicle systems, then I think Chalice could be in for a change in fortune. Mining projects are not created; they are discovered, and they take time to be economical before they are able to produce.
DYOR and check out my thoughts. I hope this helps readers gain some time in trying to understand a potential value proposition for something like Chalice Mining Limited.
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