Ground Breakers: A well-timed drill for Chalice as mining stocks push ASX higher

Chalice Mining shows growth potential at monster Gonneville nickel-copper-PGE resource with well-timed drill hits
Chairman Derek La Ferla tells AGM finding a strategic partner to develop the mine is a major priority in 2023
Miners help pull ASX 200 to 22-week high

One of the unquestioned ASX 200 darlings of the post pandemic era, Chalice Mining (ASX:CHN) has fallen back down to Earth somewhat in 2022.

Down over 40% on its end of 2021 highs, the explorer has been wading in tempestuous waters as localised community opposition to its Julimar nickel-copper-PGE discovery and a dearth of high profile news as it gets down to the nitty gritty of a scoping study have taken some steam out of its rise from small cap explorer to emerging mining giant.

But it is still heartily drilling at Julimar and its massive Gonneville deposit, regarded as the largest nickel sulphide discovery in 20 years and Australia’s first major platinum group elements find.

And a string of drill results up to 650m below its Gonneville resource was well timed, coinciding with the Tim Goyder-backed company’s AGM today.

They include some eye catching numbers like 157.5m at 1.7g/t 3E (platinum, palladium and gold), 0.2% nickel, 0.1% copper and 0.02% cobalt from 328m, 121.8m at 1.5g/t 3E, 0.2% Ni, 0.3% Cu and 0.02% Co from 395.4m, 93.8m at 1.2g/t 3E, 0.2% Ni, 0.1% Cu and 0.02% Co from 617.2m and 62.4m at 1.1g/t 3E, 0.2% Ni, 0.1% Cu and 0.02% Co from 853m.

Three diamond rigs are still down at Gonneville, located on farmland around 70km north of Perth, with resource definition and extensional drilling ongoing.

Three initial reconnaissance holes have also been drilled into the Hartog intrusion 500m north of the current Gonneville resources, intersecting “Gonneville-style magmatic sulphides”.

One of the sticky points for Chalice has been that the majority of the Julimar Complex lies not under farmland, like the 7% covered by the Gonneville resource, but beneath part of the 29,000 hectare Julimar State Forest. Chalice received approval to conduct low impact drilling there earlier this year.

Given the scale of the find, chairman Derek La Ferla told shareholders at today’s AGM one of the company’s key priorities this year is finding a ‘strategic partner’ to help develop the Julimar discovery.

“We announced recently that Chalice is considering securing a strategic minority joint venture partner (or indeed multiple partners) to assist in developing a potential mine at Gonneville and, while there can be no certainty of an outcome in this regard, securing a strategic partnership is one of our key objectives for 2023,” he said.

Chalice Mining (ASX:CHN) share price today:

Miners walk tall as prices rebound

A host of major commodities lifted overnight, led by the key LME base metals.

Copper prices climbed 1.7% to US$8013/t, with nickel up big by 4.2% to US$26,022/t and aluminium 2.1% higher at US$2429/t.

The turnaround came amid a falling US dollar and positive news out of China on real estate sector support, ANZ’s Felicity Emmett said.

“Investors shrugged off the surging COVID-19 cases and widening restrictions to focus on Beijing’s efforts to steady the economy,” she said in a note to clients.

“The call from financial regulators for banks to stabilise lending to real estate developers should see downside risks to demand lessened. This was supported by further falls in inventories for aluminium and zinc.”

The Singapore iron ore contract was up 0.28% to US$93.70/t this morning.

Chalice was the strongest performer among the large and mid-cap mining stocks, but gold, coal, lithium and battery metals performers were also among the top dogs as the materials sector lifted 0.79%, outpacing the ASX 200’s 0.68% lift to a 22-week high.

Lithium duo Ioneer (ASX:INR) and Core Lithium (ASX:CXO) rose over 3% each, with copper and nickel stocks 29Metals (ASX:29M) and Nickel Industries (ASX:NIC) both up strongly.

Among the coal stocks Whitehaven (ASX:WHC) led the large caps for the second morning in a row, with Yancoal (ASX:YAL), New Hope (ASX:NHC) and Stanmore (ASX:SMR) all in favour.

The ASX’s top two gold miners Newcrest (ASX:NCM) and Northern Star (ASX:NST) also found support on the lower US dollar, which made gold more attractive at ~US$1740/oz.