As an example, Gonneville’s reported gold resource of 0.03 g/t is at levels that are almost never seen in resource estimates because they are almost irrelevant, the manager said.
The copper discovery graded at 0.10 per cent is not much better because Chalice has pegged an unachievable 80 per cent recovery rate.
Nickel’s concentration of 0.16 per cent at Gonneville is lower than 0.2 per cent-odd grade that IGO’s Nova mine spews out as byproduct, fund managers pointed.
While Cobalt’s grades of 0.016 per cent weren’t even worth talking about for two fundies.
To sum it up, the bears think Chalice has struck a lot of tonnes but not enough actual, recoverable metal at Gonneville.
And that could flow on to the future earnings.
Macquarie analysts kept Chalice shares on outperform, but said the Tuesday update had 23 per cent lower contained metal than its mining inventory assumptions. They also marked down recovery rates for four of the six metals by 13 per cent to 20 per cent range, while keeping palladium steady and upgrading copper.
They cut FY25-27 earnings forecast by 18 to 27 per cent after changing their development scenario to a “staged approach”. But adding back an extended mine life meant Macquarie still has an overweight and a 9 per cent higher 12-month target price of $9.80 per share.
Meanwhile, the doubters think Chalice could end up in a Vulcan Energy style tussle with the short sellers.
Chalice Minerals did not respond to a request for comment.
Read More: Stockmarket darling Chalice Mining is not enchanting everyone