SOUTH WEST PROJECT (Chalice mining jv - ASX:CHN)
nickel, copper & PGE

Western Australia

South West Project, Western Australia (Chalice earning-in)

Introduction

The South West Project contains the Thor and Odin Prospects which sit within a tenement package (256 km²) and is located 240 km south of Perth, hosted within the Balingup Gneiss Complex. A joint venture, between Teck Cominco and BHP Billiton, first identified this area as being prospective for base and precious metals hosted within the complex. The joint venture completed surface sampling and airborne EM surveys which culminated in the discovery of a base and precious metals deposit (Kingsley Prospect) which Teck identified as a meta-VMS system in high grade metamorphic rocks. Venture’s nearby Thor prospect hosts a strong and coherent arsenic in laterite anomaly, with locally elevated levels of copper, zinc, tin, bismuth, tungsten and antimony, elements that are typically elevated in VMS systems.  

Comparison of Chalice’s Julimar and Venture’s Thor magnetic signatures and EM anomalies

South West Project Highlights:

  • Thor has a 20km long ‘Julimar lookalike’ magnetic anomaly associated with chromium rich rocks indicative of mafic-ultramafic intrusions;
  • An airborne EM survey in 2018, identified 13 targets in the southern 6.5 km of the Thor magnetic anomaly;
  • Maiden Drill Program at Thor intersected 2.4m of Massive Sulfide in TOR05 averaging 0.5% Cu, 0.05% Ni, 0.04% Co and anomalous Au & Pd (Refer ASX Announcement 21 February 2019);
  • Maiden Drill Hole at Odin intersecting Ni and Cu sulfides within a highly prospective mafic-ultramafic unit that extends over 10 strike kilometres (Refer ASX Announcement 11 May 2018).

Chalice previously generated new EM anomalies from the early stages of the ground based EM program at the Project. The new anomalies were defined over selected areas of the Julimar lookalike magnetic feature (Thor Target) as well as other interpreted mafic-ultramafic intrusions. The program is part of the first stage of the JV earn-in which Chalice may earn up to 70% by spending $3.7 million on exploration over 4 years (Refer ASX announcement 21 July 2020).

The new EM anomalies are similar strength conductors to those that yielded wide and significant palladium intervals during the early drilling phase of the Julimar Ni-Cu-PGE discovery. In addition, one of the new EM anomalies is within 10 metres of a previously drilled hole TOR04 which intersected 86 metres of disseminated sulfides (Refer ASX Announcement 21 February 2019) with anomalous levels of PGE mineralisation, making this EM conductor of particular interest Refer ASX Announcement 30 June 2021).

Chalice’s Julimar and Venture’s South West JV Project, and Venture’s 100% owned Kulin Project locations over geology

Thor is a 20km long ‘Julimar lookalike’ magnetic anomaly associated with chromium rich rocks indicative of mafic-ultramafic intrusions. A recent airborne EM survey identified 13 highly conductive anomalies within the southern 6.5km of the magnetic anomaly, of which only two have been tested by single holes in the maiden drill program (Refer ASX announcement 21 February 2019). The last hole drilled at Thor (TOR05) intersected 2.4m of Massive Sulfide averaging 0.5% Copper, 0.05% Nickel, 0.04% Cobalt and anomalous gold & palladium (Refer Figure 12 and ASX Announcement 21 February 2019).

At Odin, in the only hole drilled, Nickel and Copper sulfides were intersected within a highly prospective mafic-ultramafic unit that extends over 10 strike kilometres. This was further supported by surface sampling returning significant nickel and copper geochemical anomalies (Refer ASX Announcement 11 May 2018).

Under the option and earn-in agreement, effective as from 29th July 2020, Chalice may earn:

  • A 51% JV interest in the Project by spending $1.2 million on exploration within two years, including a minimum of $300,000 in the first year (extended to the 30th November 2021).
  • A 70% JV interest in the Project by spending a further $2.5 million on exploration over the following two years.
  • Venture can then elect to either contribute 30% or dilute to a minimum of 10% JV interest, in which case the interest automatically reverts to a 1.25% NSR royalty.
  • Venture to have a historical expenditure of $1.6M applied against the earn-in.
  • Chalice may withdraw at any time after meeting the minimum expenditure commitment. All other terms are consistent with an industry standard joint venture arrangement. The transaction is conditional upon normal due diligence in relation to legal and title. Shortly after the agreement was signed confirmation was given by Chalice that it was satisfied with the due diligence condition.
Chalice’s ground EM conductor models on magnetics over the Thor “Julimar lookalike” Target.
  • Chalice has generated new EM anomalies from the early stages of the ground based moving loop EM (MLEM) and fixed loop EM program at Venture’s South West Ni-CuPGE Project;
  • The new anomalies were defined over selected areas of the Julimar lookalike magnetic feature (Thor target) as well as other interpreted mafic-ultramafic intrusions;
  • The program is part of the first stage of the JV earn-in which Chalice may earn up to 70% by spending $3.7 million on exploration over 4 years;
  • The new EM anomalies are similar strength conductors to those that yielded wide and significant palladium intervals during the early drilling phase of the Julimar Ni-Cu-PGE discovery.
Chalice’s planned MLEM Program
at Venture’s South West Project over aeromagnetics

THE ODIN AND THOR JOURNEY

Odin Prospect – ‘books’ of muscovite indicating pegmatite occurrence

Odin

Initially, this was a newly discovered lithium target situated ~30 km south of Greenbushes, the world’s largest hard rock lithium mine (produces ≈40% of the world’s lithium and is owned 51% by Tianqi Lithium and 49% Albemarle). Odin was discovered following a detailed geological mapping and surface geochemical program, which identified a potentially lithium bearing pegmatite system.

Following two phases of surface exploration a lithium target was identified which extended over 1.9 km of strike and was up to 150m wide. The geochemistry in the laterite is analogous to Greenbushes with significantly elevated levels of tin, tantalum and niobium. In addition to the geochemistry, mapping confirmed the presence of coarse ‘books’ of muscovite within the laterite which is considered indicative of pegmatites in a deeply weathered environment.

Venture received co-funding from the Western Australian State Government to drill the first hole (ODD01) during the June 2018 quarter to test the lithium target. A total of 20 metres of pegmatites spread over several intervals was intersected within a mafic-ultramafic gneiss. The assay results received concluded that the pegmatites intersected in ODD01 did not contain significant lithium.

ODD01 also intersected disseminated Nickel-Copper sulfides within a mafic-ultramafic host unit, therefore realising the Company a new Nickel-Copper Target. The nickel-copper target was identified between two of the pegmatite zones intersected in the hole, the drilling intersected a continuous 21 metre zone of minor disseminated Nickel-Copper sulfides hosted within a mafic-ultramafic gneiss, which may represent part of a metamorphosed magmatic nickel-copper sulfide system. Hand-held XRF analyses verified the presence of elevated nickel and copper within these sulfides.

Venture’s surface sampling shows significant nickel and copper geochemical anomalies within the mafic-ultramafic target units a few kilometres to the south-west and south-east of the first hole.

Thor

Following the discovery of the main Thor target, as well as three additional anomalies to the east, the Company then worked on extending and refining the known exploration targets. This resulted in surface sampling extending the main Thor target, and also identifying additional targets to the north and south, pushing the total combined strike to over 10 km of EM and geochemical targets.

The Company later acquired the northern extension, so that Thor now encompasses some 24-strike km of prospective geology which already hosts multiple VMS Style targets.

Venture then, through the initial drilling program, confirmed the presence of VMS style mineralisation and now has a 20 km VMS target zone at Thor (Refer Figure 12). Following on a new high-resolution airborne EM survey delivered priority VMS drill targets for testing within the original Thor area (Refer Figure 12).

The second phase of drilling at the Thor Prospect intersected further massive sulfides with Copper and Zinc mineralisation. The assay results received from the last two drill holes suggest that the Company is vectoring in towards higher grade zones within the Thor VMS sequence.

Thor has seen only two single drill holes targeting two of the thirteen priority VMS drill targets delineated around the initial discovery area. Further drilling will go towards unlocking the potential of Thor’s 20km VMS target zone, believed to host Golden Grove type mineralisation.  

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