Chalice Mining Ltd (ASX: CHN) shares are catching the eye on Wednesday.
In morning trade, the ASX mining stock is up 8% to $1.64.
Why is this ASX mining stock racing higher?
Investors have been scrambling to buy the company's shares this morning after it made a big announcement.
According to the release, Chalice Mining and Mitsubishi Corporation have entered into a non-binding memorandum of understanding (MOU).
Mitsubishi is one of Japan's largest conglomerates and a leading global natural resources investor. Management notes that it has a long and successful track record of partnering with mining companies to fund and develop major mining projects globally. As a result, it is considered a tier-one strategic partner.
What is the MOU?
This MOU will see the parties work together with the intention of forming a potential strategic partnership to develop the ASX mining stock's 100%-owned Gonneville PGE-Nickel-Copper-Cobalt Project in Western Australia.
Management notes that the agreement establishes a general framework for collaboration on technical, financing, marketing, and offtake aspects of the project during the ongoing pre-feasibility study (PFS).
It also highlights that Mitsubishi brings a broad range of capabilities, experience and relationships across equity and debt financing, product marketing, procurement and large-scale project development.
The MOU is non-exclusive and does not restrict the ASX mining stock from entering into any other transaction involving the project.
A foundational, long-term relationship
Chalice Mining's managing director and CEO, Alex Dorsch, was very pleased with the news. He said:
We are very pleased to have executed the MOU with Mitsubishi, which marks the beginning of a foundational, long-term relationship. Mitsubishi's involvement in the Gonneville Project follows extensive due diligence and discussions over the past ~12 months and highlights the longer-term strategic nature and value of the Project as a potential large-scale, long-life and low-carbon source of critical minerals for Western markets.
From the outset of the strategic process, Mitsubishi was always considered one of the most impressive and best suited strategic partners for the Gonneville Project, based on its decades-long development, operational and trading track record. In the context of key ongoing PFS workstreams and optimisations, the MOU structure is favourable, as it provides a framework for collaboration for both parties during the PFS and allows for the progression and de-risking of the Project prior to having good faith discussions around a potential joint arrangement and investment following the completion of the PFS.
Despite today's gain, this ASX mining stock is still down ~73% over the past 12 months.
