Gonneville PFS Reveals A$1.4bn NPV and 2.7-Year Payback for WA Critical Minerals Mine

A Strategic Milestone for Critical Minerals

Chalice Mining Limited has released the results of its Pre-Feasibility Study (PFS) for the Gonneville Palladium-Nickel-Copper Project, located approximately 70 kilometres northeast of Perth, Western Australia. The study confirms the project’s potential as a globally competitive, long-life critical minerals mine, with an initial 23-year open-pit operation designed to generate robust financial returns and significant economic benefits.

The PFS outlines a two-stage development plan, starting with a higher-grade, lower-capital Stage 1, followed by a substantial expansion in Stage 2. This approach balances early cashflow generation with scalability and optionality, allowing Chalice to adapt to evolving market conditions and commodity prices.

Robust Financial Metrics Underpin Viability

Using conservative long-term commodity price assumptions, palladium at US$1,300 per ounce, nickel at US$18,750 per tonne, and copper at US$10,500 per tonne, the project delivers a pre-tax net present value (NPV) at an 8% discount rate of A$1.4 billion, rising to A$2.0 billion at current spot prices. The internal rate of return (IRR) is a healthy 23% pre-tax, increasing to 29% at spot prices, with an average EBITDA margin of 44%.

Capital expenditure is estimated at A$820 million, including contingency, with a rapid payback period of 2.7 years from first production. The project is forecast to generate cumulative pre-tax free cashflow of A$4.7 billion over the initial open-pit life, increasing to A$6.2 billion at spot prices.

Diverse and Strategic Mineral Production

Gonneville is set to become Australia’s first primary platinum group metals (PGM) mine and the country’s second-largest nickel mine. Annual average production is expected to include 220,000 ounces of combined palladium, platinum, and gold (3E), alongside 7,000 tonnes of nickel, 8,000 tonnes of copper, and 700 tonnes of cobalt.

The diversified revenue stream, palladium accounting for 51%, nickel 22%, copper 17%, and byproducts including platinum, gold, and cobalt making up 10%, provides resilience against commodity price volatility. Notably, the project’s all-in sustaining costs (AISC) are positioned in the second quartile of the global PGM cost curve, making it the lowest cost undeveloped PGM project in the western world.

Location, Infrastructure, and Community Support

Strategically located on Chalice-owned farmland near Perth, the project benefits from proximity to established infrastructure, including road, rail, port facilities, and power supply. The mine will be supported by a new water pipeline sourcing treated wastewater and a hybrid solar-battery-diesel power system connected to the regional grid.

Chalice has engaged extensively with local communities and Indigenous groups, with surveys indicating strong support for the project. The workforce is expected to be largely residential, providing significant employment opportunities, 1,200 full-time equivalent construction jobs and 500 operational jobs, while contributing over A$1.5 billion in royalties and taxes to government.

Environmental and Regulatory Progress

The project has secured ‘Strategic Project’ and ‘Major Project’ status from Western Australian and Commonwealth Governments, respectively, reflecting its critical minerals importance. Environmental approvals are underway, with comprehensive baseline studies and biodiversity strategies in place to ensure responsible development and no net loss of species.

The Tailings Storage Facility design meets stringent international standards, and the project incorporates a robust environmental management framework, including restoration and offset programs.

Next Steps and Upside Potential

Chalice is advancing the Feasibility Study, targeting completion in the first half of 2027, alongside environmental review document submissions and offtake negotiations. A Final Investment Decision is planned for the first half of 2028, with first production anticipated in early 2030.

Significant upside remains, with approximately half of the current resource yet to be mined, potential for underground mining beyond the open-pit phase, and additional revenue streams from an iron concentrate byproduct identified in testwork. Processing optimizations and market dynamics could further enhance project economics.