Chalice punished by sell-offs as company pushes much awaited Julimar scoping study into Q2 2023

The problem with building excitement is that disappointments hit harder.

That has been proven true today as Chalice Mining (ASX:CHN) tells the market a scoping study for its much-watched polymetals Julimar project in WA will not be published by the company until at least Q2 of next year.

The news is leading to a rebuke from shareholders today, seeing the company’s share price down -11% in mid-afternoon trades.

The pending study, which focuses primarily on the Gonneville deposit at Julimar—a nickel-copper-Platinum Group Element (PGE) play—is being delayed while an updated JORC Mineral Resource Estimate (MRE) is published for Gonneville. 

The Julimar project straddles the edge of the prolific Yilgarn Craton and contains a 1.2km strike target within a larger 8,000km2 landholding less than 100km from the Perth CBD. 

Why update now?

Recent drilling at the Gonneville deposit proved mineralisation continued beyond known boundaries, which is the ultimate factor driving Chalice towards the delay of its study based on that MRE update. 

That update will incorporate 60 recently completed infill drilling holes which confirmed the extension. 

Chalice also notes that the company needs to get more drill data before it can confidently (or not) underpin its vision for an open-pit mining operation at Gonneville. 

Metallurgy testwork also a factor 

Chalice also points to better-than-expected results from recent metallurgical testwork conducted on materials from site as a factor in its decision to extend the publication of its scoping study. 

“Recent testwork results highlight a material opportunity to deliver significant improvement to metallurgical recoveries [at Julimar,]” Chalice chief Alex Dorsch said. 

“This, combined with recent step-out drilling results to be incorporated in the resource update in Q1 next year, have given us compelling reasons to extend the scoping study in order to fully evaluate potential.” 

JP Morgan forecast

On Monday, JP Morgan outlined in a note its reasons for bullishness on Chalice, with the investment bank forecasting what it expects to be the results of the scoping study. 

JP Morgan is anticipating Chalice’s study to lean towards the construction of on-site infrastructure able to process 5Mtpa and producing copper-nickel concentrate, with an eventual expansion to a 10Mtpa operation. 

In that scenario, the bank expects the following highlights from Julimar: 

• 9,000 tonnes of nickel produced per annum 

• 23,000 tonnes of nickel equivalent by-products  

• Net Present Value of $2.1bn 

• Internal rate of return at 37% 

Macquarie Bank also has its eyes on Chalice, highlighting on Tuesday the company’s performance through 2022, with particular regard to its growth through November. 

A look at the intraday charts for Chalice on Tuesday as at 1430AEST