Chalice Mining Share Price Sinks on Julimar Recoveries (ASX:CHN)

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The share price of copper and nickel explorer Chalice Mining Ltd [ASX:CHN] has slipped today upon the release of phase 2 test work from its Julimar Nickel-Copper-Platinum Group Element (PGE) Project.

Despite the claim of positive results, the CHN share price has sunk slightly by 4.5 cents, or 0.96%, to trade at $4.66 per share.

ASX CHN share price chart

Source: Trading View

The slip comes after a stellar run this month where the mineral explorer tacked on a little over 22% to its share price — making up for its late-January plunge.

Recoveries ‘commercially attractive’

CHN today said that results from phase 2 of its metallurgical test work at Julimar shows high palladium-nickel-copper recoveries.

Which will allow CHN to produce two commercially attractive concentrates using conventional flotation techniques.

Meaning costs can be kept down.

The composition of the two concentrates are as follows:

  • Cu-PGE Concentrate grading 24.7% copper (Cu), 173.0g/t palladium (Pd), 22.0g/t platinum (Pt), with metal recoveries of 80.9% Cu, 60.2% Pd, 37.6% Pt
  • Ni-PGE Concentrate grading 12.2% nickel (Ni), 24.1g/t Pd, 6.9g/t Pt, with metal recoveries of 70.7% Ni, 26.1% Pd, 36.3% Pt

CHN Managing Director Alex Dorsch said:

Our Julimar discovery hosts a significant amount of critical, clean energy metals such as palladium, platinum, nickel, copper and cobalt. In such a diverse metal deposit, the ability to produce high-value, commercially attractive concentrates using a simple processing flowsheet is critical.’

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Mr Dorsch further stated that the two concentrates produced are expected to be very commercially attractive to a range of customers.

A result he says is an ‘important de-risking step for Julimar’.

So, why the negative share price action?

Perhaps investors are not happy with the level of recovery that CHN is achieving.

In both concentrates, the level of platinum recovered is under 40% and palladium recoveries are not much better.

Although CHN is investigating methods to improve these recoveries.

The explorer said that sulphide processing was able to achieve recoveries of 86.3% Pd and 73.9% Pt.

What does this mean for the CHN share price?

In my books, today’s small slip is hardly a worrisome reaction to CHN’s results — given the strong run of the share price there could be a little profit-taking action there too.

Mr Dorsch said that CHN is also working hard to better understand the mineralisation styles at Julimar.

There is a lot more work do to in order to fully understand the deposit’s mineralogical, metallurgical, processing and marketing outcomes, and we continue to build that understanding ahead of the maiden Mineral Resource Estimate, targeted for mid-2021.

And with quite a strong outlook for nickel and copper over the medium term, CHN could be well positioned to continue on its upward trajectory.

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Lachlann Tierney,
For Money Morning

About Lachlann Tierney

Lachlann Tierney is an Analyst for Money Morning and has been investing for nearly a decade. With a Masters of Science from the London School of Economics, he brings a sound understanding of global markets to his writing. Lachlann is interested in emerging technologies, energy solutions and helping people invest…