In a mixing bowl, combine the powdered sugar and sweetened condensed milk. Add the peppermint extract and mix until well combined to form a dough-like consistency.
Transfer the mixture onto a piece of parchment paper and roll it out into a rectangle about 1/4 inch thick.
Using a knife or cookie cutter, cut out small circles (approximately 2 inches in diameter) from the rolled dough. Place the circles on a baking dish or cookie sheet lined with parchment paper.
Freeze the peppermint patties for about 10 minutes to firm up.
While the patties are freezing, prepare the chocolate coating. In a double boiler, melt the chocolate chips with coconut oil over low heat, stirring until smooth. If using a microwave, heat in short bursts of 30 seconds, stirring between each until melted.
Once the patties are firm, dip each one into the melted chocolate, ensuring they are completely coated. Place them back on the parchment paper to set.
Allow the chocolate to harden at room temperature or refrigerate to speed up the process, about 15-20 minutes.