Mining big-cap Chalice Mining (ASX:CHN) has executed an earn-in and joint venture (JV) agreement to earn a 70% interest in Northam Resources’ exploration licence in the West Yilgarn province of Western Australia.
The $2.27 billion market capitalisation company reports Northam’s greenfield project is contiguous with its existing West Yilgarn tenure and covers predominantly broad-acre farmland in the western Wheatbelt region of Western Australia between Kauring, Northam, and Yerecoin.
Chalice considers the region to be ‘highly prospective’ for magmatic nickel-copper-platinum group element (PGE) sulphide mineralisation, as demonstrated by its Gonneville Nickel-Copper-PGE discovery in early 2020.
Under the agreement, Chalice has made a cash payment of $150,000 as a deposit, with $100,000 being refundable if due diligence conditions are not satisfied.
Once legal, tenure, and access due diligence are complete, Chalice will pay Northam $2.45 million in cash or shares, which will effectively reimburse Northam for nickel-copper-platinum group element (PGE) exploration expenditure to date.
Chalice will then be able to earn a 51% interest in the project by spending $7 million on exploration over a 4-year period, with a minimum commitment of $2 million on exploration within 2 years.
The company will then be able to elect to earn a further 19% interest in the project by spending $10 million over a 4-year period paying Northam $1 million in cash or shares.
Chalice reports it will have a dual focus on exploring known targets and deploying its ‘proven’ exploration approach in the West Yilgarn Province to identify and explore new targets across the ‘poorly explored’ region.
As the project is contiguous to Chalice’s existing West Yilgarn tenure, the company says exploration activities can begin immediately
As the project is contiguous to Chalice’s existing West Yilgarn tenure, the company says exploration activities can begin immediately. Several land access agreements are already in place over ‘key’ target areas, which allows for non-ground disturbing exploration and access for drilling.
Chalice reports the properties are predominantly broad-acre cropping, with access expected in November-December through to May-June each year.
The company plans to follow up early-stage targets defined by Northam with low-cost surface geochemistry and ground electromagnetic (EM) surveys in the second half of 2023, which will be followed by initial drill testing in late 2023 or early 2024.
Further, Chalice plans to acquire high-resolution magnetic and gravity geophysical data in the second half of 2023 to improve its confidence in regional targeting and screen the area for additional ultramafic-mafic intrusions.
Northam’s project straddles about 120km of strike length of the Corrigin Tectonic Zone, which lies immediately east of a major crustal boundary between the South West and Younami Terranes in the Yilgarn Craton.
The project tenure was acquired by Northam prior to the Gonneville discovery, and since then, early-stage exploration has focused on nickel-copper-PGE target generation using a combination of surface geochemistry and project-wide airborne EM, with minimal ground geophysical follow-up.
Chalice reports the project hosts several known ultramafic-mafic intrusions, with proximal nickel-copper-cobalt-chromium soil anomalism and airborne EM anomalies. The company has also interpreted several other unrecognised intrusions from geophysical datasets that are potentially prospective.
Chalice Mining is an ASX 200-listed miner searching for PGE, nickel, copper, cobalt, and gold discoveries at its Julimar Project in Western Australia, which includes the tier-one-scale Gonneville magmatic nickel sulphide deposit.
On 28 June 2023, the company had about $145 million cash at hand according to its latest presentation published on the same date.
Write to Harry Mulholland at Mining.com.au
Images: Chalice Mining Ltd