The Chalice Mining Ltd (ASX: CHN) share price flipped the script on yesterday's weak performance.
Shares in the metals exploration company attracted an increase of 9% to $1.95 as the curtains closed on Wednesday trading. The bright green glow followed a rocky morning for Chalice Mining shares, opening at an underwhelming $1.80 apiece — a mere 4% above its 52-week low.
Without any new developments being unearthed today, we must turn to the prior day for clues.
'World-class' is still in the works
The past year has put the Chalice Mining share price through the wringer. In the time it takes for the Earth to complete a revolution around the Sun, the Western Australia project developer has had 54.4% of its share price erased.
Yesterday, the company released its September quarterly activities report. Investors initially responded by selling down the Chalice Mining share price on Tuesday. However, it appears the market has decided to see it in a more positive light today.
It's important to note that Chalice Mining is still in the exploration and development phase. Therefore, revenue, earnings, or production figures were not the focus for the three-month period ending in September.
Typically, the focal point for explorers is the potential resource body, feasibility, and available capital.
According to the report, Chalice Mining held $130 million in cash and liquid investments at the end of the quarter. The company believes this accommodates the necessary funding for the next two years.
Furthermore, Chalice Mining CEO Alex Dorsch commented on the company's Gonneville Nickel-Copper-Platinum Group Element (Ni-Cu-PGE) project, stating:
It is important to acknowledge, however, that Gonneville remains a world-class critical minerals
project with significant development optionality – a genuine 'company-making' and globally
competitive project that we believe will ultimately transform Chalice into a major green metals
producer for many decades to come.
However, as Dorsch outlined in the report, the current economic environment is weaker than when earlier studies were completed. Demand for green metals is heavily reliant on demand for electric vehicles. That demand has notably deteriorated as consumers cut back.
Chalice is not alone. Earlier this week, ASX-listed lithium producer IGO Ltd (ASX: IGO) warned it may cut production as material supply risks are exceeding industry demand.
Long-term thinking for Chalice Mining share price
The market may have turned bullish on Chalice Mining shares on Wednesday after recognising there's still a way to go before the company reaches production. The focus then, instead, lies on whether the company is well funded and holds a quality resource.
As stated in the quarterly report, the pre-feasibility study is being targeted for completion by mid-2025.
Moreover, shareholders may have begun contemplating the implications of an external 'interest party' today.
As specified in the activities report:
After launching the strategic partnering process in April 2023, expressions of interest were received from several organisations to support the continued definition and potential development of Gonneville. Discussions with these organisations are being progressed, although there can be no assurance at this stage that the strategic partnering process will result in a transaction.
Several ASX companies involved in green commodities have attracted investments from mining big-wigs such as Gina Rinehart. Possibly, investors are beginning to contemplate whether the Chalice Mining share price is next in line.
