The premier palladium- nickel-copper development project in the western world
Resources Rising Stars Gold Coast
3-4 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
ASX:CHN 2
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 | ||
53% | Paradice (5%) | |
36% | Goldman Sachs (5%) | |
Others (26%) | ||
Capital structure | |
Shares on issue | 389M |
Market capitalisation | A$430M1 |
Trading liquidity | ~4M shares/day |
Cash balance | A$89M2 |
Listed investments | A$22M2 |
Enterprise value | A$341M1 |
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 28 August 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 | ASX:CHN | 3 |
derivative position of 46,728,282 shares on 10 Nov 2022. | ||
Why palladium and platinum? This was a common sight in the 90's, prior to the adoption of catalytic converters
Los Angeles 1998
ASX:CHN 4
Palladium and platinum based catalytic converters have driven a
remarkable improvement in air quality and health globally
Los Angeles 2020
ASX:CHN 5
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 ICE
- More palladium required in HEVs than internal combustion engine vehicles (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)
ASX:CHN 6
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% | "If there's no correction in | ||
36% | the price soon… we will | ||
have to put it on care and | |||
maintenance." Sibanye- | |||
Stillwater in reference to its US | |||
operations, March 2024 | |||
13% | |||
6% | |||
3% | |||
Russia | South Africa | North | Zimbabwe Rest of world |
America |
LBMA Palladium price (US$/oz)
3,500 | Norilsk | Ukraine | |
flooding | invasion | ||
3,000 | 'Diesel-gate' | COVID-19 | |
2,500 | pivot to | Auto destocking / | |
petrol & Pd |
2,000 | Russia dumping? |
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
ASX:CHN 7
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)
ASX:CHN 8
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, | Revenue split of ~50% Pd, ~25% Ni, |
540kt Cu, 96kt Co contained2 | ~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.
ASX:CHN 9
3. Based on the August 2023 Scoping Study 15Mtpa case adjusted for current consensus metal prices
Gonneville has significant development optionality and the priority of the ongoing PFS is to improve recoveries and finalise the starter flowsheet
Indicative study, approvals and development flowchart
~18 months | |
Pre-Feasibility Study | |
Phase 1: | Phase 2: |
Case/option assessment | Preferred Case Selection |
(starter plus expansions) | (scope and cost) |
~12 months | |
Feasibility Study | |
Final | |
Preferred Case detailed engineering, costing and | Investment |
Decision - | |
scope refinement | |
target late | |
CY26 |
Flotation and leaching testwork / | Hydrometallurgical testwork (future |
starter flowsheet design | expansions) |
Process design, | |
costing | |
Open-pit / | Mining optimisations |
underground scoping | / design, costing |
Infrastructure & other project scopes, cost estimates
Strategic collaboration and negotiations with Mitsubishi
Process engineering, scope
and cost refinement
Final mine designs
Procurement, execution readiness
Project financing and offtake
Permitting and Approvals
Today
Timeline is indicative and subject to the results of various workstreams
ASX:CHN 10