|Location||West Kimberley Region, Western Australia|
|Development Stage||Early Exploration|
The King Leopold Nickel Project covers an area of ~1,800km2 in the west Kimberley region of Western Australia.
The Project covers several known areas of Ruins and Hart Dolerite which are both considered highly prospective for magmatic nickel sulphides as well as other related metals (Cu, Co, PGEs, Au, Sn, W).
The Ruins Dolerite has been demonstrated to host high-grade nickel sulphides (average 8% Ni tenor) after the Merlin discovery in 2015 at the Double Magic Project of Buxton Resources (ASX: BUX) and Independence Group (ASX: IGO).
Chalice recently acquired the highly prospective Ruins Nickel Project from private nickel explorer North West Nickel Pty Ltd (“NWN”) which forms a central part of Chalice’s wider King Leopold Project (see ASX Announcement 18th June 2019).
The Ruins Project is located immediately east of Buxton’s Double Magic Project and is considered to be highly prospective for nickel sulphides as well as other associated metals (Cu, Co, PGEs, Au, Sn, W), having similar geology and proximity to the Merlin discovery. Buxton recently entered into two option and earn-in joint venture agreements with Independence Group (“IGO”, ASX: IGO) in the region.
Buxton’s Merlin Prospect was discovered in 2015 and exploration activities have since demonstrated that Ruins Dolerite is a favourable host rock for high-grade nickel sulphides. The prospect has a very high nickel tenor (average of 8% Ni), which indicates a fertile and highly prospective mafic-ultramafic system in the area.
Chalice’s immediate focus will be ground EM over airborne EM targets identified on E04/1169 to better define targets for immediate drill testing. A maiden drill program is expected to commence in Q3 2019.
An additional detailed 1,075 line-km airborne EM survey is scheduled to commence in late June 2019 to provide the first EM coverage along an interpreted ~8km long east-west trending outcropping body of Ruins Dolerite in adjoining tenement E04/2299 to the East. Any EM conductors identified from this survey will be followed up with reconnaissance mapping, sampling and ground EM surveying.
The King Leopold Nickel Project comprises the Ruins Nickel Project (acquired from North West Nickel Pty Ltd) and several 100% owned exploration licences.
Under the acquisition agreement, Chalice acquired all the outstanding shares in NWN by issuing 7.5 million fully paid ordinary Chalice shares to NWN, effectively reimbursing NWN for costs incurred to date.
The agreement also includes contingent deferred consideration whereby, subject to the following milestones being achieved at the Ruins Project, Chalice will pay to NWN:
- A$1.75 million in cash or Chalice scrip, at Chalice’s election, within 60 days of Chalice releasing to the ASX a Mining Scoping Study or Feasibility Study in relation to the Project;
- A$4.5 million in cash or Chalice scrip, at Chalice’s election, within 60 days of commencement of commercial production and cumulative gross sales exceeding A$300 million from the Project.
Any future issuance of Chalice shares to NWN remains subject to shareholder approval, as required, and will be priced according to the 20-day Volume Weighted Average Price (VWAP) at point of milestone completion. All shares issued by Chalice are subject to a separate 12-month escrow period.
NWN holds 100% of the hard-rock mineral rights on E04/1169, 2405 and 2563 via an agreement with Waterford Bay Pty Ltd and Kimberley Alluvials Pty Ltd. NWN also has an earn-in agreement with Strategic Metals Pty Ltd whereby NWN can earn up to an 85% interest in E04/2299 and 2325 by spending A$3.25 million over 6 years.