This is an automatically generated transcript. Denver Gold Group cannot accept responsibility for mistakes, errors, omissions, or any action taken in reliance thereon. Use of this transcript is governed by Denver Gold Group’s Terms of Use.

Next company on the schedule this morning is Chalice Mining Trades on the Australian Stock Exchange under the ticker chn. And I'd like to welcome Ben Goldbloom GM corporate development to the stage. Good morning. Ben Mr Goldblum is the brings over 15 years experience in the mining industry across operations, commercial management and corporate development functions over to you, Ben. Thank you. Thanks everyone for joining you to, to listen in to talk about Chalice and the, and the Gonville project. The Gonville project is the leading palladium nickel copper development project in the western world. It's been a while since Chalice has been back at the Gold Forum and, and a big thank you to, to Tim and the team for having us back here. At this great event, I'm gonna take you through the latest developments on the project, our recent exploration targets and what else the company has been up to? So who is Chalice mining and why should you be interested in the company? We have the 100% owned Gonville project located 70 kilometers outside of Perth in the tier one location of Western Australia. It has 17 million ounces of PGES most of which is palladium. 960,000 tons of nickel, 540,000 tons of copper. This is a large deposit on anyone's measure it was discovered in 2020. We're in the middle of a, a pref feasibility study and we started the regulatory approvals process in March earlier this year. Two months ago, we signed a, an mou with Mitsubishi. Mitsubishi are a, a well known partner. They're a first choice partner to be working with on, on Gonville and they're well known for being a foundation partner. For me, some of the biggest and best binding projects around the world. Mitsubishi are gonna help us with the product mix the flow sheet and getting our products to market and all of this with the intention of forming a binding partnership at the end of the pref feasibility study in the middle of next year. As we sit today, both the palladium and nickel spot prices are sitting at cyclical lows. Gonville has scaled life and is predicted to be in the second quartile of the cost curve. We see this as some of the most compelling value and leverage to a turnaround from these cyclical lows. We have a strong balance sheet with 100 and $11 million in cash and listed investments, no debt and we are prudent with our expenditure, we are only spending money on critical project and exploration activities. Only. Our forecast expenditure is tending towards $1 million a month. And that will give us plenty of time to ride out these difficult times and be well placed for when the commodity prices do eventually recover. As history has always shown us commodity prices do always recover. Chalice is listed on the A SX and he is part of the A SX 300 with a strong institutional share registry. The stock tends to trade with a very close alignment to the spot prices of palladium and nickel. And so the last 18 months has been a very difficult period for shareholders and all involved. But our shareholders have been really stable throughout that period because they see the leverage that the project characteristics provide to a turnaround from these metal from these current metals prices. Our trading liquidity is strong. We have 4 million shares a day and we have good cell side coverage from research. So what are PGES, platinum group elements or or PG MS platinum group metals? There are rare group of metals that are close to platinum on the, on the periodic table of elements by rare when you take PGES and compare them to gold. Gold is about 30 times more abundant on the earth's crust. The main metals are platinum, palladium, iridium and rhodium amongst a couple others. But today, we're most interested in in palladium. 85% of palladium goes into catalytic converters and catalytic converters go into petrol engine vehicles or I CE S and hybrid electric vehicles, they go into these vehicles to reduce the emissions that come out of the exhaust. And so when you look at the image of the screen of the, the image on the screen of the L A skyline in in 1998 with its, with its heavy congestion and extensive highway network, this was an accepted part of life. So what have catalytic converters done will have changed this image from 1998 into this image in 2020 palladium and platinum based catalytic converters have driven a remarkable improvement in air quality and health. Globally, Western governments have taken note of this and that's why they're increasing their emission standards and adding metals like palladium onto their list of critical minerals. A common question I do get asked is that battery electric vehicles bevs don't have any emissions, won't this all be solved when we're all driving bevs? And if you'd asked me that question three years ago, the answer would have been a pretty easy. Yes. But when you look at the recent trends in in vehicle sales, the answer today is quite different. So the market share of battery electric vehicles or, or BEVS from June 21 to December, 22 went from 8% to 18%. Very strong growth. But since then, that growth has hit a plateau and has been relatively flat. Nearly 50% of USB EV and BEV owners are are considering switching back to their I CE s and then there's a large proportion of vehicle owners that are now buying hybrids. And over the last, over the last two years, the market share of hybrid electric vehicles has grown by 100 and 20%. And when you compare the equivalent hybrid electric vehicle with the equivalent I ce because the hybrid vehicles run in a more stop start nature, there is more palladium that goes into the catalytic converter in a hybrid when compared to an I CE. The surprising thing and perhaps this is the opportunity for investors is this hybrid growth story is not yet reflected in the consensus palladium demand forecasts. So palladium is produced predominantly from aging deep under invested mining complexes in Russia and South Africa. Over 80% of palladium comes from Russia, South Africa and Zimbabwe. This is a niche market. It produces about 6 million ounces of palladium every year. If you compare this to gold, gold produces about 15 times this amount. And so considering where palladium comes from the countries and the types of mines, it's no surprise that we've seen this price volatility over the last five years. This is a niche market and is very susceptible to supply shocks. In 2021 with the norsk flooding event and in 2022 with the Russian invasion of Ukraine, the price spiked to over $3000 an ounce. Today, we sit bouncing around at about $1000 an ounce. And so with these prices, we are deep deep into the cost curve. 40% of palladium operations today are not making money. And so what happens when mines are not making money? Well, they stop reinvesting with capital to maintain their com their production rates and they most definitely don't invest to increase their production rates. In reality, what's happening at these mines is they're looking to pare back their production rates, preserve the cash burn and preserve their balance sheets. And this was highlighted by the announcement of Sibanye Stillwater on the 12th of September stating that they're gonna halve their production rate at their Stillwater mine in Montana. The Gonville project will sit comfortably in the second quartile of cash costs. So even at these cyclical lows, if Gonville was in production today, it would still be making money with inflation running at 8 to 20% at most of these mines. We don't think it's gonna be too long before the palladium price recovers to a more long-term sustainable level around about $1300 an ounce and at those prices, Gonville is well back into incentive price territory. So Gonville is a new long life low costs critical minerals project in the tier one jurisdiction of Western Australia. It has a unique metals mix revenue split of 50% palladium, 25% nickel, 15% copper. The rest of it comes from gold, platinum and cobalt. So it is largely a palladium project with good support from by-product credits from the other metals. And that's what enables it to sit in the second quartile of the cash cost of the cash cost curve and be predicted to be the lowest PGE producer in the western world. In March of this year, we started the regulatory approvals process and this process has been largely derisk by the acquisition of 22 square kilometers of farmland surrounding the project. It's really important to, to emphasize that the whole development envelope of the Gonville project is on Chalice owned farmland only as I said, this is a large deposit. It occupies two kilometers along strike. We have measured and indicated resources down to 450 m. The drilling goes down to 1200 m and is still open at those depths. So what does a large deposit give you? It gives you optionality. Over a year ago, the company released a scoping study of a large bulk scale open pit and that open pit would be well suited to a high price environment. After the release of that study, the commodity prices across palladium and nickel started to fall. So what did we do? We went back to the resource remodeled the high grade portions of it with a far greater level of granularity. And those high grade lenses start right at the surface. So those high grade lenses are very amenable to a smaller starter case, open pit. The high grade resource has 59 million tons of inventory in it at about 2.5 times the grade of the global resource. And what this table shows you is that this deposit really is a choose your own adventure based on the prevailing economic environment, we'll start the project with a smaller starter case. But as time goes on and as commodity prices increase as they tend to do over time, we'll drop our cut off grade and increase the number of tons into the operation and increase our return on our investment. So on to the flow sheet and it's, it's fair to say that this is where the bulk of the focus and time has been during the pref feasibility study. We're starting with a very simple flow sheet of crushing, grinding and floatation. And this flow sheet is analogous to what IGO have at the Nova Nickel mine. It will produce a copper PGE concentrate and a nickel PGE concentrate. We get far better pay abilities in the copper PGE concentrate. So we're trying to pull as much of the palladium or PGES into that first product as possible. Any PGES that do not report to the concentrates will come out in the leaks in the leach circuit as a door. A bar. The optionality that we do have is that after after years three and beyond, we can look at further downs streaming of our nickel concentrate and we would do that via some sort of Hydromet process and produce some sort of precursor cathode product that would be well suited to a battery manufacturer. So there are two main pillars to, to tell us there's the Gonville project, which is what we've just been talking about. And then there's 10,000 square kilometers of land in the West Yorgan. If you follow the history of Chalice, the DNA of Chalice is very much to chase large packages of land that are unexplored and have frontier geology. And this is exactly what attracted us to the West Yogan. Prior to the the discovery of Gonville, this land was largely untouched. We discovered Gonville. We pegged 10,000 square kilometers of land and now we have that first mover advantage to go and explore all of that 10,000 square kilometers all to ourselves. Archaeologists have been working very hard to focus on what is the next big discovery and the main focus is on gold or copper gold targets. Now, earlier this month, we released two new exciting targets at our Barabara project. The geology at at Barabara is very similar to other Greenstone belts in the Southwest. And these are the types of Greenstone belts that holds that host large gold discoveries like the Newmont owned Boddington, which has 40 million ounces. We've got two new targets. Research West and wars which have coherent gold soil anomalies peaking at Research West at 235 P PB and peaking at war spite at 70 P PB. The plan is to start drilling into these targets later on after the cropping season later in this year. And we're gonna put 7000 m of air core drilling and pending what we find out of those holes. We're well funded to go and expand on that program. So where to from here? Well, we'll continue on with our pref feasibility study plan is to have that complete in the middle of calendar year, 2025. Continue on with the focus on the met test work and the flow sheet. We'll we will continue on in parallel with the regulatory approvals process. And at the end of that process, at the end of the pref feasibility study, we'll sit down with Mitsubishi and talk about a potentially binding commercial arrangement at that point as well. We'll commence the project, the process for project finance and for offtake drilling at the Barabara project, as I said, will start at the end of this calendar year. So if you're a believer in the slowing of battery electric vehicle sales and a subsequent recovery in the palladium price, I urge you to look around at ways to get exposure to this trade. There are not many options. Gonville has life scale and is low cost. It is clearly the leading investment opportunity to get leverage to this trade. This phrase does get thrown around a lot in our sector, but this truly is a tier one project in a tier one jurisdiction and we have 10,000 square kilometers of land which we're just getting started on with our exploration program. Thanks for listening in. Thank you very much, Ben. So with that, we have time for some questions. If you do have a question, please raise your hand and the microphone be brought over to you. Thank you. Be. There was a terrific update on progress there. I notice in terms of your process route, I think looks like Chalice's current thinking is to go to a conventional and a more simple production of metal concentrates with the base metals and PGM in there with the work that you've done today. I guess it's early days. Are you getting a feel that you can get acceptable recoveries of both base metals PMS and also acceptable pay abilities? I guess it's early days, isn't it? Yeah. So that's a good question. So we've got two main products. It's the, the copper PG concentrate and the nickel PG concentrate. So the copper PGE concentrate is nice, clean, easy to get to market. There are, there is a, a number of customers that would take that and we're getting excellent pay abilities on that one. I think probably the more the more challenging one is, is the nickel PG concentrate. If there's probably six or seven customers for the copper PG concentrate, there might be three or four for the, for the nickel PG concentrate and, and what our metallurgical team are doing is there's a bit of a trade off with pulling as much recovery as you possibly can but also maintaining the grade of that concentrate. And so that's a big part of of the focus of the pref feasibility study is to understand the domains within the deposit, do a lot of test, a lot of met, test work to properly understand how they behave in the various situations. and, and ultimately get to a concentrate that is say the the advantage that that the Gonville deposit does have is scale and size. And so if you have large volumes when you're selling to these refineries, they're, they're often more forgiving with your concentrate grades because you can provide lots of volume and they can then go and blend it with with some other customers. Thank you. We have another question back here. Thanks Ben. The location of the project has pros and cons. What, what can you flash a bit more about this strategic announcement by the government? What, what's that gonna help you actually achieve in in the process of getting it all approved? And do you think it will shorten the timeframe? Yeah, so good, good question Hayden. We were pretty excited to get this announcement out yesterday for those that have been following the stock. What, what the announcement was was the the state government of Western Australia have given us a special status. It's called special project status. And and what that allows us to do is it gives us a streamlined and prioritized pathway through the approvals process. So there will be a dedicated team within the state government. They will be assessing it only on, on Gonville. And if you, if they're deciding whether to do work on the Gonville project or a project that doesn't have this special project status, then we'll get the priority at this stage. We're not quite sure if it's gonna speed up the timelines, but it certainly gives, it gives sort of a, a message to the naysayers who say that, you know, this project will never get permitted because clearly the state government are on board and are and are willing to push it forward. I think we have time for another question. If there's anything from the audience. So Ben. yeah, it seems like a great opportunity to sort of get off cycle exposure to palladium. The looking at the palladium price. I mean, is there anything that would, we would think that maybe you'd have a kind of incremental rebound over time? Once the market realizes that maybe ev sales might be dropping or hybrids increase and whatnot or do you expect a price that could be kind of sharp? I mean, we've seen a lot of volatility in the palladium price. Do you expect a rebound to be more moderated or, or sharp? What do I expect or what do I hope for? I, we see the Zimbabwe production coming off. Do you think that's enough to kind of drive it higher? Looking at supply and demand and everything? Yeah, there's probably a couple of factors which are driving., there's one on the supply side and the, and then there's one on the, on the finance side. So on the, on the supply side, the market's been in deficit for probably three of the last four years and it's forecast to be in deficit for the next couple of years. So the question is, well, why hasn't there been a recovery already? a and when you're dealing with 40% of the market coming out of Russia, one of the largest customers for the Russians is, is the Chinese. So it's quite an an opaque market. And what we think's happening is the Russians have very large stockpiles which they're working through. And at the point where those stockpiles run out, we should expect to see a sharp, a sharp recovery. The other thing worth noting is on the financial markets. You know, it's a, it's a palladium market that produces 6 million ounces per year. On the financial markets, there's 1.5 million ounces short. So as we get little announcements along the way of either production cuts or things like what Putin said the other day, I think we're gonna see sharp closing of those short positions and we should see sharp volatility in, in the increases from where the the levels are are today. Ok. Yeah, great. Well, thank you very much. That's Chalice Mining. And thanks to you again, Ben Goldblum.