JP Morgan upgrades Chalice Mining price target; sees Julimar project value at $2.1bn

Mon 12 Dec 22, 10:44am (AEST)
A pindan dirt road stretches to the horizon in an unknown region of northern WA
Source: iStock

Key Points

  • JP Morgan upgrades price target to $7.30 by June 2023, an increase of 11%
  • Upgrade comes on a softening of exploration risk at key deposits, as well as what it expects to be the conclusion of an upcoming scoping study
  • JP Morgan believes Chalice mining will support a 5Mtpa concentrate operation that will be expanded in the future

JP Morgan has upgraded its price target for nickel-copper-Platinum Group Element (PGE) explorer Chalice Mining (ASX:CHN) to $7.30 in June next year; an increase of 11% over the bank’s last published target.

Chalice is developing the Julimar project not far outside of Perth, located within state forest and comprising a range of different target deposits. 

Since being staked in 2018, Julimar has consistently landed on retail investor radars.

JP Morgan’s attention fixed 

The project has landed on the bank’s radar due in part to its size. Contained within a landholding over 8,000km2, Chalice’s geology team interprets a 1.2km long strike length along the western edges of the Yilgarn Craton, a well-known geological formation in Western Australia. 

The upgrade comes as the bank softened its perception of risks attached to one deposit on-site, the Hartog target, with recent drill results shoring up confidence. Diamond drilling kicked off at Hartog in January this year. 

Chalice confirmed PGE sulphides at the Hooley target earlier this month. 

JP also points to impressive results from the Hooley target, though, notes recent data suggesting the Hooley deposit may be smaller compared to others. 

Scoping study due imminently

Chalice is also poised to release a scoping study for its Gonneville project later this month; the bank expects that study to support one of two scenarios: 

  • Infrastructure underpinning a smaller, higher grade 5 million tonnes per annum (5Mtpa) copper-nickel project producing concentrate 

  • A larger bulk 10Mtpa project “with the prospect of downstream nickel processing.” 

JP expects the study to lean towards the 5Mtpa operation, though, anticipates future studies to support an expansion to 10Mtpa. 

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% 

The bank is also expecting to see the scoping study surprise the market, potentially leading Chalice’s share price to further gain on sentiment alone. 

A look at Chalice's one year charts
A look at Chalice's one year charts


Written By

Jonathon Davidson

Finance Writer

Jonathon is a journalism graduate and avid market watcher with exposure to governance, NGO and mining environments. He was most recently hired as an oil and gas specialist for a trade publication.

Get the latest news and insights direct to your inbox

Subscribe free