Chalice Mining (ASX:CHN) is the latest nickel player to take steps to cut costs after the price of the battery metal again dipped sharply.
The nickel price retreated 2.6% over the course of this week to US$16,586 ($24,693) per tonne by Friday (23 August), according to Trading Economics data.
Chalice told investors this morning that in light of the current metals price environment, it has reduced the size of its board and implemented additional targeted reductions in corporate overheads and project expenditures.
The Western Australian explorer, which has a market capitalisation of $416.3 million, has cut its board to four members from six, with non-executive Directors Linda Kenyon and Jo Gaines to step down at the end of August.
Chalice will also slash its monthly cash burn from around $2.4 million per month to $1 million per month over the course of the next four months.
The move is aimed at strengthening the company’s financial position to enable it to advance its 100%-owned Gonneville Project, which Chalice says is one of the largest recent nickel sulphide discoveries globally, and the largest platinum group element (PGE) discovery in Australian history.
The project hosts about 17 million ounces of PGEs, 960,000 tonnes of nickel, 540,000 tonnes of copper, and 96,000 tonnes of cobalt.
Chalice says the reduction in monthly expenditure reflects the planned completion of key metallurgical testwork and environmental modelling activities for Gonneville by the end of 2024.
Work is continuing with the Gonneville Pre-Feasibility Study to evaluate a staged, high-grade development, including metallurgical testwork, flowsheet development, geo-met domaining and regulatory approvals.
Chalice says it remains committed to defining the optimal development pathway for the project as a priority.
The company had $111 million in cash and listed investments as of 30 June 2024.
The nickel price slump has seen multiple companies, including mining giant BHP (ASX:BHP) and junior explorer Poseidon Nickel (ASX:POS), shelve their nickel ambitions.
BHP last month revealed it was mothballing its Western Australian nickel operations, citing oversupply and lower forward consensus prices for the battery metal.
The Nickel West operations and West Musgrave project will be temporarily suspended from October 2024.
BHP said at the time that forward consensus nickel prices over the next half of the decade have fallen sharply, reflecting strong growth of alternative low-cost nickel supply.
Meanwhile, Poseidon Nickel, which has a market capitalisation of $14.9 million, deferred the planned restart of its Black Swan Nickel Project in September last year given the uncertain global markets.
Write to Angela East at Mining.com.au
Images: Chalice Mining
