‘Gonneville is viable’: Goyder’s Chalice Mining halves Toodyay mine build costs but search still on for backer

Tim Goyder’s Chalice Mining has released a long-awaited pre-feasibility study outlining a cheaper way forward for its Gonneville mine near Toodyay that it hopes will win over suitors and environmental sceptics. Shares in the listed junior, made famous by its mammoth nickel-copper-platinum group elements discovery in 2020, closed 5.43 per cent to $1.66 after the market digested updated project numbers on Monday. The new blueprints have been two years in the making and set out the steps for the greenfields mining operation proposed to be built about 70 kilometres northeast of Perth on privately-owned land abutting Julimar State Forest. Revised initial costs of turning the Gonneville discovery into a producing mine have been reduced substantially under the new, smaller-scale proposed plan to $820 million from a previous $1.6 billion price tag billed in 2023. The $820m covers what Chalice says would be ‘phase one’ of the open-pit mine, which could then progress to an expanded second phase after the first four years of operations. Under the first phase Gonneville would churn out an initial 151,000 ounces a year of palladium, platinum and gold, making it a first-of-its-kind mine in Australia producing the metals group referred to as 3E precious metals. Output would be cranked up to 238koz under the second phase should it go ahead. Gonneville would also deliver a 3200tpa of nickel, lifted to 7700tpa under phase two, and 5200tpa of copper with the scope to increase to 8700tpa. However, the study leaves a big question mark of further involvement from Japanese industrials giant Mitsubishi Corporation, which agreed to partner which Chalice under a non-binding memorandum of understanding in July 2024. At the time the pair agreed to work towards potentially firming up a binding partnership or joint venture to develop the miner’s Gonneville nickel-copper-platinum group elements discovery, but only once a pre-feasibility study had been completed, then due in mid-2025. “We would like to thank Mitsubishi for their support and input to date, and we look forward to working closely with them as we progress into offtake and financing discussions,” chief executive Alex Dorsch said. The explorer has indicated it plans to pursue debt funding to advance the project. After a few years of pitching to investors, it’s hoped the new study will lead to securing funding and offtake partners. Chalice is also looking to appeal to increased government interest in bolstering Australia’s critical minerals supplies. Receiving “strategic project” status from the State Government and “major project” status from the Federal Government is hoped to aid the funding mission. Mr Dorsch told analysts on Monday Gonneville was now a “fundable and executable project”. “There is a significant pool of debt funding out there for critical minerals projects, particularly ones of scale,” he said. “We have had very, very good engagement with the export credit agencies and other sovereign debt providers already. “We’re very relaxed about pulling that funding solution together.” Listed miners have become increasingly reliant on taxpayer funded debt agencies, such as Export Finance Australia and the Northern Australian Infrastructure Facility, to plug funding gaps in new projects. Liontown Resources — prospector Tim Goyder’s other big mining venture — received $110m from the Clean Energy Finance Corporation (CEFC) and $120m from EFA in 2024 to finish building its Kathleen Valley hard-rock lithium mine in WA’s Goldfields. Environmental approvals are another hurdle to clear, and the famed discovery’s proximity south of the forest has been an area of contention among some local residents and conservation groups. Chalice is targeting first production in 2030, based on the expectation it will have funding and approvals in hand by the second half of 2028. Plans for Gonneville have been with the WA Environmental Protection Authority since April 2024. Months after, the State Government in September 2024 rejected a petition signed by more than 5200 people calling to upgrade the entire sweeping 28,600ha of forest and land north-west of Toodyay to national park status. Mr Dorsch told analysts on Monday that Chalice was “very comfortable” about securing approvals particularly given that the group owns the land it intends to develop, having spent some $45m on property in the area. The build’s locale means it will also require construction of a new 63km pipeline that would be hooked up to the Alkimos Wastewater Treatment Plant. Chalice told the market it had signed a letter of intent with Water Corporation in relation to the offtake of treated wastewater that is “currently being discharged into the ocean”. WA prospector Mr Goyder is the largest shareholder in Chalice with about 6.35 per cent, or $40.9m, worth of stock in the company. Responding to the study, Bell Potter analyst David Coates said Chalice’s new pre-feasibility work presented a “materially improved and simplified development scenario with reduced upfront costs’. “Gonneville presents as a strategic, large-scale, western critical minerals mine, aligned to western government policies to diversify, de-risk and secure critical minerals supply chains.” St Georges Terrace firm Argonaut, which rates Chalice as speculative buy, said the $820m estimated for the first phase of the project had come in 15 per cent lower than expected but unit costs had risen. “Production rates were mixed vs our forecasts, while unit costs were higher than we had expected. CHN will now advance a full feasibility study, which is due to be released in the 1HCY27,” head of research Hayden Bairstow wrote on Monday.