The leading palladium- nickel-copper development project in the western world
Gold Forum Americas
SEPTEMBER 2024
A S X : C H N
Chalice Mining - a unique critical minerals explorer-developer, highly leveraged to palladium price recovery
Tier 1 scale Resource in WA - the Gonneville Project
- 100% ownership of one of the largest undeveloped PGE-Ni-Cu-Co(critical minerals) resources in the western world
- 17Moz of Pd-Pt-Au (3E), 960kt Ni, 540kt Cu, 96kt Co contained in Gonneville Resource, starting at surface1
- Pre-FeasibilityStudy and regulatory approvals underway
Compelling value, leverage and upside
- High leverage to Pd, Ni price recovery from cyclical lows
- Gonneville predicted to become the lowest cost PGE mine in the western world (after Ni-Cu-Co credits) - 2nd quartile on cost curve
- ~10,000km2 of surrounding exploration licences in new province
Strategic MOU with
- Non-bindingMOU with top tier development partner
- Intention to formalise a potential binding partnership post PFS
Strong financial position
- ~A$111M in cash and listed investments and no debt2
W E S T E R N
A U S T R A L I A
- 660Mt @ 0.79g/t Pd+Pt+Au (3E), 0.15% Ni, 0.083% Cu, 0.015% Co (refer to the Mineral Resources Estimate contained in Appendix for tonnes and grade by confidence category)
- Includes ~$22M in listed Investments at 30 June 2024
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Chalice is an ASX300 listed specialist critical minerals explorer-developer with a uniquely strong financial position and institutional register
Major shareholders3
Tim Goyder
11%
Retail/Other
Institutional Paradice (5%)
53%36% Goldman Sachs (5%) Others (26%)
Capital structure | |
Shares on issue | 389M |
Market capitalisation | A$490M1 |
Trading liquidity | ~4M shares/day |
Cash balance | A$89M2 |
Listed investments | A$22M2 |
Enterprise value | A$401M1 |
ASX:CHN 6-month performance
2.00
1.80
1.60
1.40
1.20
1.00
0.80
0.60
0.40
0.20
0.00
Research coverage
1. As of 13 September 2024; 2. As of 30 June 2024. 3. Major shareholder information is as disclosed in the last substantial shareholder notice provided to the Company. Note: Arctis Global disclosed a long equity derivative position of 46,728,282 shares on 10 Nov 2022.
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Why palladium and platinum? This was a common sight in the 90's, prior to the adoption of catalytic converters
Los Angeles 1998
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Palladium and platinum based catalytic converters have driven a
remarkable improvement in air quality and health globally
Los Angeles 2020
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Why palladium? Battery electric vehicle adoption has reached a
plateau and hybrid EV sales are growing rapidly
Battery electric vehicle (BEV) market share (China, US, Europe)
~0% | ||||||||
17% | 18% | 17% | 18% | 19% | 19% | |||
16% | ||||||||
15% | 16% | |||||||
15% | 15% | |||||||
13%
8%
Hybrid electric vehicle (HEV) market share (China, US, Europe)
120% | 11% | |||
10% | 9% | |||
9% | ||||
7% | 7% | |||
6% | 6% | |||
4% | 4% | 4% | 5% | 5% |
- Western car manufacturers are scaling back their BEV growth ambitions, and scaling up hybrid production to meet changing consumer preferences
- 57% of BYDs sales in Q2 2024 were hybrids - it is not just a western trend
- 46% of current US BEV owners considering switching back to internal combustion engines (ICE)
- More palladium required in HEVs than ICE
- The hybrid growth story is not yet reflected in consensus palladium demand forecasts
Source: China Passenger Car Association (CPCA), company data, Motor Intelligence, McKinsey Mobility Consumer Pulse 2024 (n = 36,954)
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Why palladium? Supply is concentrated in Russia and South Africa - supply risks are high, disruptions are common and recycling is subdued
- Palladium production is dominated by ageing, deep, under-invested mining complexes in Russia and South Africa
- Western mines are rapidly becoming uneconomic and are being shut, making supply concentration worse
- Weak prices and lack of investment is driving a rapid decline in recycling volumes (not growth as most are forecasting)
Global Palladium Supply Market Share (2023)
41% | ||||
36% | "Reduction of 200koz (~44%) | |||
per year from 2025…" | ||||
Sibanye-Stillwater 12 | ||||
September 2024 | ||||
13% | ||||
6% | 3% | |||
Russia | South Africa | North | Zimbabwe | Rest of world |
America |
LBMA Palladium price (US$/oz)
3,500 | Norilsk | Ukraine |
3,000 | COVID-19flooding | invasion |
'Diesel-gate' | ||
2,500 | pivot to | Auto destocking / |
petrol & Pd | ||
Russia dumping? | ||
2,000 |
1,500
1,000
500
0 Jul-18Jan-19Jul-19Jan-20Jul-20Jan-21Jul-21Jan-22Jul-22Jan-23Jul-23Jan-24Jul-24
Gonneville is the only palladium project in the western world with scale - a unique investment opportunity
Source: AME Research, LBMA = London Bullion Market Association
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PGE prices are deep into the cost curve and unsustainable - given strength of demand, pricing could revert to incentive levels in near term
PGE industry all-in sustaining cost curve (cash costs plus sustaining CapEx), net of by-product credits, US$/oz 4E 2023A1
AISC (US$/oz 4E)
2,500
2,000
1,500
1,000
500
0
-500
-1,000
Quartile 1 | Quartile 2 | Quartile 3 | Quartile 4 |
15Mtpa Case: | ||||||
~280kozpa 4E | Loss making operations | |||||
@ US$470/oz2 | ||||||
Current PGE 4E basket price (approx.)
840
Predominantly South African / Zimbabwean mines -
unit costs up 8-20% in 2023 relative to 2022
Nornickel (Russia) - negative cash costs
1,000 | 2,000 | 3,000 | 4,000 | 5,000 | 6,000 | 7,000 | 8,000 | 9,000 | 10,000 | 11,000 | 12,000 |
Cumulative 4E production (koz)
Net total cash costs (US$/oz 4E) Sustaining CapEx (US$/oz 4E)
Source: April 2024 SFA (Oxford) figures used for 2023 realised 4E cost curve data. Note: 1. 4E cost curve positioning assumes SFA Oxford 2023 actual by-product commodity prices of: Copper prices of: US$8,486/t, Nickel US$21,505/t, Iridium US$4,682/oz, Ruthenium US$464/oz, Chrome 42% CIF US$312/t. Chalice internal Cobalt prices of US$40,000/t have been assumed given not disclosed in SFA data. ZAR:USD exchange rate of 18.47 assumed. 2. AISC adjusted to reflect SFA Oxford 2023 actual by-product commodity prices (vs US$360/oz on August 2023 Scoping Study prices)
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Gonneville PGE-Ni-Cu-Co Project Overview
A new long-life,low-cost,low-carboncritical minerals project in Western Australia
Strategic MOU in July 2024 with Mitsubishi Corporation
Tier 1 development partner, intention to formalise a potential binding partnership post PFS1
Tier 1 scale sulphide Resource | Unique critical minerals asset |
17Moz of Pd-Pt-Au (3E), 960kt Ni, 540kt Cu, 96kt Co contained2
Revenue split of ~50% Pd, ~25% Ni, ~15% Cu, ~10% Au/Pt/Co3
Competitive PGE cost profile | Low-risk development location |
Predicted to become lowest cost | Mine infrastructure on ~22km2 of |
PGE producer in western world | CHN-owned farmland |
(2nd Quartile) | |
Shallow open-pit mining | Sulphide mineralogy |
Resource starts at surface, high- | Ability to produce separate Cu-PGE, |
grade feed in early years | Ni-Co-PGE concentrates and leach |
Pd from flotation tails |
- Non-bindingMOU executed on 3 July 2024 - refer to ASX Announcement for full details
- For tonnes and grade by confidence category and metal equivalent assumptions, refer to the Mineral Resources Statement in Appendix.
- Based on the August 2023 Scoping Study 15Mtpa case adjusted for current consensus metal prices
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Remodelling of the Gonneville high-grade sulphide zones has allowed investigation of selective open-pit/undergroundmining techniques
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