Chalice Mining founder and former chairman Tim Goyder has increased his stake in the company by $30 million, as the green metals explorer weathers fallout from its scoping study.
With the release of Chalice’s long-awaited Gonneville scoping study, the company’s share price fell from $5.08 to around the $3.80 margin. The price continued to drop, today sitting around $2.80 per share.
Despite the study modelling a 15 to 30 million tonnes per annum (Mtpa) mine, investors took a cautious approach to lower-than-expected nickel production and high price estimates for commodities.
The mine is expected to generate most of its revenue from palladium. The study assumed that the mine’s palladium would sell around US$2000 per ounce, whereas at the time the metal was trading at US$1250.
The scoping study made similar assumptions of the other metals.
But Chalice’s biggest shareholder Tim Goyder said this simply reflected the challenges of price forecasting for a mine that does not expect to reach commercial production until 2029.
“With a longer-term lens on, I believe the short-term aberrations of the market are really overdone,” he said in late August.
“In the clear light of day any of these projects are so hard to find and the true value will come through. Everyone has gone very short term on their views on capex (capital expenditure).
“They want a bed of roses with everything they touch, it is short-termism. The market has just got to get a bit real.”
Chalice managing director Alex Dorsch expressed a similar sentiment shortly after the study was released.
“There is about seven-plus years until we are actually producing any metal, so we are not talking about producing in the current commodity price environment, nor have we designed our operation in the current spot price, commodity price environment,” he said.
“We are designing a 20-year operation … we are trying to understand those long-term dynamics as best as possible.”