Chalice Mining Cuts Costs with Breakthrough Nickel Concentrate Process at Gonneville

Metallurgical Breakthrough Simplifies Gonneville Processing

Chalice Mining Limited (ASX: CHN) has announced a significant metallurgical advancement at its 100%-owned Gonneville PGE-Ni-Cu-Co Project, located approximately 70km northeast of Perth, Western Australia. The company’s technical team has successfully developed a process to produce saleable copper and nickel flotation concentrates from low-grade sulphide composites, removing the need for a previously planned hydrometallurgical treatment step.

This breakthrough addresses a key technical challenge that had persisted since the project's inception. Previously, nickel concentrates from lower-grade ores required a complex and costly hydrometallurgical process to upgrade the product to smelter-grade. The new flotation-based flowsheet produces nickel concentrates exceeding 6% Ni grade across the entire resource spectrum, simplifying the processing route.

Economic and Operational Implications

By eliminating the hydrometallurgical circuit, Chalice expects a substantial reduction in both capital expenditure and operating costs. The 2023 Scoping Study had estimated life-of-mine hydrometallurgical capital costs at approximately A$510 million and operating costs near A$4.10 per tonne, totaling over A$1.6 billion. The new flowsheet is anticipated to significantly cut these expenses, improving project margins even with marginally lower overall metal recoveries.

Additional cost savings are expected from optimizations in the Carbon-in-Leach (CIL) leaching process, which recovers palladium and gold from flotation tails with reduced reagent consumption. Notably, these CIL operating costs may qualify for a 10% tax offset under the recently legislated Critical Minerals Production Tax Incentive, further enhancing project economics.

Technical Validation and Ongoing Work

The metallurgical testwork underpinning this breakthrough involved over 700 flotation tests across seven sulphide composites representing the full grade range of the resource. The team employed advanced reagents and refined flotation parameters to achieve smelter-grade concentrates. Concurrent magnetic separation and leaching trials have demonstrated further operational efficiencies, including power savings from High Pressure Grinding Rolls (HPGRs) and potential benefits from Vertical Roller Mills (VRMs).

Chalice is progressing its Pre-Feasibility Study (PFS), with completion targeted for mid-2025. The PFS will incorporate comprehensive variability testing and detailed engineering to refine cost estimates and optimize the staged development plan. The company is also actively engaging with potential strategic offtake and financing partners, including Mitsubishi Corporation under a non-binding memorandum of understanding.

Strategic Significance and Market Context

The Gonneville Project hosts one of the largest palladium-dominant resources in the western world, containing critical minerals essential for decarbonization, urbanization, and defense technologies. The simplification of the processing flowsheet reduces technical risk and accelerates the pathway to development, positioning Gonneville as a strategically important asset amid tightening global supply of nickel, palladium, platinum, and cobalt.

Chalice’s Managing Director and CEO, Alex Dorsch, highlighted the breakthrough as a “step change” for the project, commending the technical team’s persistence over two years to “crack the code” on the complex metallurgy. The company’s strong balance sheet, with A$90 million in cash and listed investments as of December 2024, supports ongoing study and development activities.