Chalice Mining Limited (ASX: CHN) has taken another important step towards unlocking the commercial potential of its Gonneville project in Western Australia, commencing pilot processing alongside promising improvements to its precious metals recovery system.

The 11 November 2026 announcement marks a significant development milestone for the proposed $820 million mining operation, with simplified processing technology offering potential cost savings and improved operational efficiency.

With Gonneville carrying a modelled pre-tax valuation of $1.4 billion, successful pilot results could strengthen the project's financing prospects and bring Chalice closer to commercial production.

Key Numbers

• 5 tonnes: Representative sulphide ore undergoing continuous pilot processing.
• 45,000 tonnes: Forecast annual copper concentrate production under the pre-feasibility study.
• 95,000 tonnes: Forecast annual nickel concentrate production.
• $1.4 billion: Gonneville's pre-tax net present value at an 8% discount rate.
• $820 million: Estimated pre-production capital expenditure, supported by $53 million in cash and listed investments at 30 September 2026.

The Latest Development: A Major Step Towards Commercial Production

Chalice has commenced a laboratory-scale continuous pilot program designed to validate Gonneville's processing flowsheet and demonstrate its potential under sustained operating conditions.

The program uses approximately five tonnes of fresh sulphide ore containing 1.7 grams per tonne of combined palladium, platinum and gold, alongside 0.33% nickel and 0.28% copper.

Three valuable products are targeted: copper-precious metals concentrate, nickel-cobalt-precious metals concentrate and platinum group metal doré.

Importantly, the pilot incorporates treated wastewater from Alkimos, reflecting the proposed commercial processing conditions.

A particularly encouraging development is the simplification of the precious metals leach elution circuit from five processing steps to two.

By replacing a zinc-based stripping solution with a nickel-based alternative generated from the ore, Chalice could reduce reagent consumption, simplify operations and improve processing economics.

Although the potential financial benefits remain unquantified, the improvements provide another opportunity to strengthen Gonneville's development case.

What Stands Out: Strong Project Economics Meet Technical Progress

Gonneville's December 2025 pre-feasibility study outlined a 23-year open-pit operation capable of generating approximately $4.7 billion in cumulative pre-tax free cash flow.

The study also estimated a 23% pre-tax internal rate of return, highlighting the project's potential to deliver substantial long-term economic value.

We believe the latest processing developments could help Chalice translate those projections into a more compelling financing proposition.

Successful pilot results would provide lenders and prospective customers with greater confidence in concentrate quality, recovery performance and operating reliability.

International copper and nickel smelters have already expressed interest in Gonneville's concentrates, creating potential pathways towards future offtake agreements.

Chalice's approximately $447 million market capitalisation on 10 November also highlights the importance of understanding the project's development potential, although its pre-tax valuation cannot be directly compared with equity value without accounting for construction funding, taxes and execution risks.

What Chalice Is Doing Now

Chalice continues to advance Gonneville's engineering, environmental approvals and definitive feasibility study, targeted for completion in the second half of 2027.

The company is also exploring domestic refining opportunities, including discussions involving the Perth Mint.

Meanwhile, its recent high-grade copper-gold discovery at Kestrel in the Northern Territory adds another promising dimension to its exploration portfolio.

Although Kestrel remains at an early stage, further successful drilling could broaden Chalice's longer-term growth opportunities.

Insight: Could Processing Improvements Unlock Greater Value at Gonneville?

We see Chalice's latest milestone as an encouraging step towards converting Gonneville's substantial mineral resources into a commercially viable operation. The simplified processing circuit could improve efficiency, while successful continuous pilot testing may strengthen lender confidence and support future offtake negotiations. Combined with Gonneville's attractive pre-feasibility economics and the emerging Kestrel discovery, Chalice has several potential avenues for value creation. Funding and execution risks remain significant, but we believe continued technical progress is strengthening the company's development outlook and providing a clearer pathway towards commercialisation.

What Happens Next?

Initial flotation results are expected in early 2027, followed by complete leach pilot results during the second quarter.

Positive outcomes could support further processing optimisation and strengthen the definitive feasibility study ahead of its targeted completion in the second half of 2027.

A potential final investment decision is targeted for the first half of 2028, subject to financing, approvals and project readiness.

For Chalice, the opportunity is becoming increasingly tangible. Successful technical validation, attractive financing arrangements and continued progress at Gonneville could establish a stronger foundation for the company's next phase of growth.