The Gonneville palladium project in Western Australia is strategically positioned to benefit when commodity markets rebound, with its scale, long-life potential, and second-quartile cost estimates providing a strong foundation for growth, says Chalice Mining chairperson Derek La Ferl.

Speaking to shareholders at the AGM on Thursday, La Ferla highlighted the unique appeal of the Gonneville project. “The Gonneville project is the only palladium development project of scale in the Western world.”

Located about 70 km north-east of Perth on Chalice-owned farmland, Gonneville has a rare mix of critical and strategic minerals required for decarbonisation and urbanisation, including nickel, copper, cobalt, palladium and platinum.

The combination of metals makes Gonneville especially attractive to Western governments and offtakers which are actively seeking long-term, reliable sources of critical minerals.

Gonneville stands out as a potential new supply source at a time when global reliance on Russia and South Africa for palladium has surpassed 80%. La Ferla noted that demand for palladium would continue to grow, driven by the metal’s key role in catalytic converters for hybrid and internal combustion engine vehicles.

However, he stated that many palladium producers were struggling with cost pressures, with several operations running at a loss and being forced to scale back production or place mines on care and maintenance.

Chalice believes the trend will worsen if palladium prices remain at current levels.

“We are already deep into the supply cost curve, and further reductions in supply are anticipated,” La Ferla said. “This will inevitably lead to higher prices, which will be supportive of Chalice’s share price and the long-term value of the Gonneville project.”

Last month, commonwealth Industry and Science Minister Ed Husic granted major project status to the Gonneville project. In September, Western Australian Premier Roger Cook awarded strategic project status to Gonneville project.

The project is currently in the prefeasibility study stage, with regulatory approvals progressing in parallel.