Latitude Hill Nickel Project
The Latitude Hill Project Farm-in and Joint Venture with Traka Resources Limited (ASX: TKL) (“Traka”) in the west Musgrave province of Western Australia is considered prospective for massive and disseminated nickel-copper-PGE sulphide mineralisation. This investment provides Chalice with a counter-cyclical investment opportunity in an under-explored frontier province where there is excellent potential to make substantial new discoveries, similar to the discovery of the Nova-Bollinger nickel-copper sulphide deposit in the Albany-Fraser Orogen.
The project consists of five tenement applications covering an area of 1,007 km² located approximately 40km south-west of the Wingellina nickel deposit in the west Musgrave Province in Western Australia.
Figure 1. Location of the Latitude Hill Project.
Geology and Exploration
The Latitude Hill Project lies in an area of widespread but thin colluvium and sand dune cover estimated at less than 10m thick. Mapping by the Geological Survey of Western Australia has identified localised outcrops of mafic intrusive rock-types that have similar character to the Bell Rock Range mafic intrusives, which are considered highly prospective for massive and disseminated nickel-copper-PGE mineralisation.
The Project represents an exciting opportunity for Chalice to capitalise on a high quality Spectrem Airborne Electromagnetic (EM) survey completed in 2012, which identified seven priority conductors (Figure 2). None of these priority conductors have been followed-up with ground-based exploration.
Of the prioritised EM targets, six have associated subtle to strong linear magnetic anomalies with a morphology consistent with shallow-plunging chonolith intrusive bodies. Chonoliths represent important host structures for orthomagmatic nickel-copper-PGE sulphide deposits, such as the Nebo-Babel nickel-copper-PGE deposits, located about 100km west of Latitude Hill.
The priority EM targets in the Latitude Hill Project have a high conductance – which is consistent with a source from bedrock sulphides. And given the lack of observed graphitic sediments in the Province, Chalice believes that these conductors are highly prospective for massive nickel-copper-PGE sulphides.
Figure 2. Aeromagnetic image showing location of Latitude Hill project tenements and priority EM conductors.
Chalice and Traka have initiated discussions with the Ngaanyatjarra Council to progress the tenements to grant. Once granted, Chalice will undertake ground EM surveying over all priority targets to better define the conductors.
The EM conductors will be tested with a program of shallow aircore traverse drilling for regolith and bedrock geochemical sampling, followed by Reverse Circulation (RC) drilling.
Chalice may earn up to 70% interest in the Latitude Hill Project by funding A$10 million worth of exploration with a minimum commitment of A$1 million within the first 12 months. Chalice may spend A$5 million within three years (including the minimum commitment) to earn 51%, at which point Traka have a one-off election to contribute to its 49% pro rata interest. If Traka elects not to contribute, Chalice may then spend another $5 million to earn a further 19% within an additional three years. If Chalice earns a 70% interest (or 51%, as the case may be), both parties will contribute proportionally to all expenditures going forward.