“As those who’ve been following Chalice know, we made one of the largest palladium-nickel-copper discoveries in the Western world in 2020 – 17 million ounces of palladium, platinum and gold, 960,000 tonnes of nickel, 540,000 tonnes of copper and 96,000 tonnes of cobalt in a single, open pit,” Chalice managing director Alex Dorsch told a Resources Rising Stars lunch in Kalgoorlie on Tuesday.

“It is a phenomenal resource, and it is such a unique resource for Australia. We are effectively getting Australia into the palladium and PGM sector.”

Palladium prices fell for four straight years from 2021-24 and it was the third-worst performing commodity last year.

To the surprise of many, platinum group elements have staged a recovery this year with platinum the best-performing commodity in the first half of 2025, with palladium in fourth.

“We’re seeing the early indications of a price recovery for our primary commodity, and really the only way to play that commodity recovery is Chalice,” Dorsch said.

“The spot price is up about 30% off the lows. We’ve recovered from about US$900 an ounce to US$1200 an ounce, but the spot price is still below the marginal cost of supply at about US$1450 per ounce.”

Highly concentrated

Around 85% of the world’s palladium supply comes from Russia and South Africa, both of which Dorsch says have underinvested in their operations.

“The South African producers, during those periods where the price pulls back, they just strip the mines of any sustaining capital, and that is going to come home to roost, we think, in this cycle,” he said.

Palladium has been in deficit for 10 of the past 11 years and demand is expected to remain strong due to the popularity of hybrid vehicles.

“The idea that the oil sector and internal combustion is just going to tail off, we think that’s unrealistic,” Dorsch said.

“We think particularly in the developing world, there’s a very, very strong preference towards hybrid vehicles, and so if demand stays relatively flat, I guess the story for palladium is one of underinvestment in the supply side.”

Precious metals consultancy Metals Focus attended Shanghai Platinum Week last month and said the increasing pivot of PGM flows to China was clear.

“As governments worldwide place greater emphasis on securing critical raw materials, PGMs are increasingly viewed as strategically important,” it said.

“China’s demand profile, shaped by industrial policy and technological deployment, reinforces the case for PGMs as critical metals.

“With mine supply constrained and secondary recovery limited by structural factors, Chinese end-use demand has the ability to deepen the market shortfall, price direction and investor confidence in the years ahead.”

Dorsch believes it’s only a matter of time until incentive pricing of more than US$1500/oz returns.

“We are just such a unique investment, because we are really the only credible development project out there that can actually come online into another incentive price environment,” he said.

“As a commodity speculator and commodity investor, it’s a fantastic position to be in, because effectively, there’s no other development assets or competitors, so you really have a big moat around the company.”

Chalice shares have doubled over the past four months.

“We move with about 2.5-5 times leverage on the palladium price primarily, but just because of the size of our asset and the uniqueness of our asset it just has no peer in terms of palladium assets worldwide,” Dorsch said.

Well placed

Chalice is currently working on a prefeasibility study for its Gonneville asset outside Perth, which is due to be completed in November.

Dorsch admitted the project’s earlier flow sheet was too complex and the company was punished for it by the market.

However, earlier this year, the company reported a breakthrough after spending A$15 million on metallurgical test work.

“Finally, with the right mix of reagents, the right flotation conditions, the right grind size, we were able to make a saleable nickel concentrate from the nickel flotation stage, so we’ve stripped out a big unknown in terms of complexity and unproven tech,” Dorsch said.

“We’ve also added a magnetic separation stage because we didn’t want the reactive iron going into the CIL plant, and the added bonus of adding that step is that we found we can actually get a 65% magnetite iron ore by-product as well, which we’re in the process of bringing into the resource and adding to the financials.”

The company has a memorandum of understanding with Mitsubishi Corporation, which has been providing input into the PFS and Dorsch said the company would obviously welcome formal involvement from the Japanese giant in the project.

“The upcoming year ahead really is around offtake, finalising our regulatory approvals, financing, and then we expect to be in a position to be ready to push the button to construct this project in the late part of 2027,” Dorsch said.