Just weeks after this picture was taken in December 1979, the Maghera-born priest was dead.
Fr. Chesney (46) was never questioned by police before his sudden death from cancer in March 1980.
This new photograph - from the Derry Journal archives - was taken at a sporting event in Inishowen where the priest was based for the last few years of his life.
This week, it was revealed that the police, the Catholic Church and the state conspired to cover up Fr. Chesney's suspected role in the Claudy bombing - one of the worst atrocities of the Northern Ireland Troubles.
Nine people died in the bombings on July 31, 1972.
The NI Police Ombudsman's probe found that high-level talks led to Fr Chesney being moved out of the jurisdiction to Co. Donegal.
Al Hutchinson's report found that detectives in 1972 had concluded that Fr Chesney was an IRA leader and had been involved in the bombing.
He added that, by acquiescing to a deal between the government and the Catholic Church to move Fr Chesney to a parish in the Irish Republic, the RUC was guilty of a "collusive act".
He said this had compromised the investigation and the decision "failed those who were murdered, injured or bereaved" in the bombing.
Mr Hutchinson said some detectives' attempts to pursue Fr Chesney were frustrated ahead of a meeting between Northern Ireland Secretary William Whitelaw and the leader of Ireland's Catholics, Cardinal Conway.
There, it was agreed that the priest would be moved to a parish in Donegal, just over the border in the Irish Republic.
Fr Chesney, who denied involvement in terrorist activities to his superiors, was never arrested.
This week, the retired Bishop of Derry, Dr. Edward Daly, said he had doubts about allegations of Fr. Chesney's involvement in the IRA.
In an interview with the 'Journal', Bishop Daly said he had interviewed the priest in the 1970s and been told he was only a "verbal republican".
He said: "Father Chesney vehemently denied involvement in any kind of IRA activity to me on two occasions, in 1974, not long after I was appointed Bishop of Derry, and again in 1977. He also denied such involvement earlier to my predecessor, Bishop Neil Farren."
Meanwhile, yesterday, a former police officer who investigated Fr James Chesney in 1972 says he was prevented from arresting him by senior RUC officers.
The Special Branch detective sergeant said he was within 15 minutes of launching an operation to search Father Chesney's house.
He was told not to proceed, because "the matter was under control".
SIC: DJUK