Thanks, Chrissy. I appreciate everyone's hungry. I'll try and be as quick as possible. So, as most people know, Chalice is focused on our discovery in 2020 that we made just outside of Perth here. It's a very large-scale palladium, nickel, copper resource. It also contains quite significant quantities of gold, platinum, and cobalt as well. And last year was a transformative year with the release of our pre-feasibility study after what was a pretty difficult preceding couple of years with the pullback in nickel and palladium markets. But also, we've made a big leap forward in really cracking the code on the metallurgy and the process flow sheets, which I'll talk to. So we have the best project in this metal, certainly in palladium, anywhere in the world.
It's the largest and lowest cost. It's gonna generate exceptional returns over an initial 23 years of open-pit mine life. It's gonna have very short payback, and there's a huge amount of upside as well. For every $100 an ounce on the palladium price, our NPV on the asset increases by $ 250 million. So it's a very, very nice set of financial metrics. There's a huge amount of exploration upside that we continue to explore. We're really focused still on the western part of the Yilgarn. We're obviously a Craig Oliver Award winner, and really, we stay close to our roots. You know, we have about seven full-time geologists in that team.
We're spending in the order of sort of $ 5 million- 10 million on grassroots greenfields exploration, and we think that's part of the WA that's, you know, the least explored, that western part. So very excited as to what we will come across there. Financially, a very, very strong position, AUD 71 million in cash and investments. That means we're funded to FID on Gonneville in early 2028. I'll talk to as well the significant amount of government money out there there is for critical minerals projects. So we're really expecting to crowd in a huge amount of investment, and really getting told very directly by government to make our project as big as possible. We've got a very good team.
We obviously found this deposit, and we've taken this project now six years into PFS completion, and we're really committed to take it all the way into production. And it's a compelling investment opportunity for those who are looking. You know, you may have seen palladium's had a nice run and a fantastic rebound, but Chalice share price is still lagging massively behind. And those who know the Lassonde Curve know that sort of in the permitting feasibility stage is typically where development assets go very, very cheap, and as they get closer to production, they typically re-rate significantly. So there's an opportunity there for investors sort of on the two sides.
Our largest shareholders, Tim Goyder and Adam Harvey at Paradice, two of the, I guess, best investors, I would say, in Australia for, for this type of thing. Very strong balance sheet. Like I mentioned, market cap today, about AUD 700 million, well covered by the Street, but really, people are just sort of starting to come back to the story now that we've fixed the flow sheet, now that we have a real development asset. I think, you know, we haven't yet really made a full comeback. So watch this space. The project, as most know, is just outside of Perth here.
It's gonna have a significant production profile, 220,000 oz of precious metals per year, plus around 16,000 tonnes of base metals. So if people wanna think palladium equivalents, it's about 450,000 oz a year of palladium equivalent, by value, or it's about 65,000 tonnes a year of copper equivalent. So it is a huge operation, and that is gonna trundle away for 23 years and only gonna exploit about half of the resource. So there's still gonna be another half of the resource there after 23 years. It's gonna be the lowest cost producer in the PGM space at $370 per ounce all-in sustaining cost.
That's miles ahead of our South African sort of direct competitors, and it's robust at even at the bottom of the cycle, price environment. So AUD 1.4 billion NPV, a 23% IRR, and sub-three-year payback at bottom of the cycle type prices. I'll speak to where those metrics are today at spot. They are quite frankly eye-watering. It's gonna be a two-stage development. We're gonna build a 5-million-tonne per annum concentrator. Initially, it's gonna be a low strip ratio, 1.2 strip. You don't see many of them. We've spent AUD 250 million de-risking the asset now, so we know this ore body exceptionally well. It is a huge resource, 17 million ounces contained PGMs, 960,000 tonnes of nickel, 500,000 tonnes of copper, a bit of cobalt as well.
The reserve conversion, we have about half of that in proven and probable reserve now, following the PFS. So that's a massive step. You know, in the space of essentially five years, we've taken about 280 million tonnes into proven and probable reserve. The resource is about 660 million tonnes in an open pit. It's 70 km from Perth here. We've got the full support of government, major and strategic project status. So if you're thinking sort of, what's the highest level of endorsement that the government can make? It is those two endorsements there, those two statements. We also own the farmland, so we've made a major de-risking step there. We own 26 sq km of farmland, where the mine site and the open pit and the infrastructure will sit.
It's gonna be quite a fantastic milestone, I think, for Chalice, but also for the country. It's gonna be Australia's first PGM mine in 2030. It's gonna be producing, like I said, it's funded now to FID in the first half of 2028. So really, its focus now is on permitting and finishing the permitting process, locking in offtake for the products, as well as building that funding stack for construction. It's a 50% palladium revenue stream, 22% nickel, 17% copper. That's at our base case prices. At spot prices, it's more like 60% palladium, 25% copper. It's becoming more and more copper-dominant as copper comes up.
As you can see there, the annualized production, they're huge production metrics, and relative to what's in resource, that's obviously what underpins their mine life. This is probably the operative slide for those understanding the value proposition today. Spot prices now are sort of somewhere between 30%-70% higher than our base case, which as you can see on the right-hand side there, palladium is now trading about $1,700. We assumed $1,300 on the study, and as you can see in those two orange boxes there, basically at $1,300, that's where you get the AUD 1.4 billion NPV8. The current spot NPV is about AUD 3 billion. Current IRR, about 38%.
And to put that in context, at spot prices, this will generate about $420 million of free cash flow per year. And those payback periods, you know, on both stages of investment look somewhere like 1.5-1.8 years. So, you know, if you believe spot prices are gonna persist or prices could even go much higher than spot prices, this is trading at something like 0.25 times the spot NAV or spot NPV on the asset, which is a far too big a discount to the fair value of the asset. We also run our NPVs at 8% discount rate.
We are going to be thrown very, very low-cost finance, so we think there's an opportunity to bring that WACC down from 8% as well over the long term. And like I mentioned, $250 million of NPV added for every $100 an ounce on the palladium price. So there is really no really other way to play palladium. If you like the sort of the shape of the, the metal and, and its future, then this is really for you. And speaking of the, the shape of the chart, for those who are, commodity speculators out there, obviously, you can see that 2019, 2020 period were fantastic for palladium. It came off a, a low of about $1,000 an ounce. It went to about $3,400.
But as you can see there, it stayed in the $2,500-$3,000 an ounce range for quite some time, and there was multiple geopolitical reasons there. Russia's the major producer. The other producers in South Africa are very, very deep now in their very old aging mines. So prices typically get very, very explosive in this commodity. And we've just seen, just in the last two weeks, the U.S. government's come out and said, basically, Russia was dumping on the market there, which sent the prices down from $3,000 down to $900. So they've gone and slapped a 132% tariff on that Russian palladium.
And so if you think about, you know, where else is the U.S. gonna go for palladium, there is no one else essentially ready to develop something anywhere near us. So we are in absolutely best possible position to get funding from the U.S. government, and certainly, we think that price can go far, far higher than where we are here at $1,700. And what we like about it as well, I should mention, is that, you know, even when high prices persist over three- or four-year periods like that, there's no supply that gets turned on. It's not like lithium or nickel, where you've got a whole bunch of mines that are waiting to be turned back on. In palladium, there is nothing. There is effectively nothing. There is no elasticity whatsoever in supply.
It's a very, very small market, though, 9 million ounces a year, so it's an order of magnitude smaller than gold. We've just seen tariffs, like I mentioned, on Russia, and really the story is people are buying hybrid vehicles, not battery electric vehicles. So previously, there was this view that everyone was gonna go straight into a battery electric vehicle, and that was gonna destroy palladium demand. What we've seen is people are buying hybrids, and certainly ex-China, even within China, I should say, you know, 60% of BYD sales are hybrid. So people associate, you know, China being 100% electric, it's nonsense. Even in China, people are preferencing hybrid vehicles, and that's gonna keep palladium demand very, very strong for a long time. The other bit is electronics.
So if you imagine gold is now $5,000 an ounce, there's 8 million ounces of gold used per year in electronics for plating, for connectors in chips. So you imagine that the substitutes for gold are really silver, and palladium, and obviously, that's why there is a correlation between the metals. Like, typically, if you see gold run, you see silver follow, you see platinum and palladium follow as well. So there's a lot of electronics manufacturers at the moment, particularly in the data centers, now looking at palladium as, I guess, the next obvious alternative metal. The challenge with silver, obviously, is that it corrodes, so you can't use it for long-life, sort of robust electronic applications. Palladium, very, very robust, good hardness, good resistance to corrosion, so we think that's a future really, right there for the metal.
And like I mentioned, the South Africans and the Russians are doing a hopeless job sort of maintaining production at the moment. So even with prices much, much higher, they're guiding down something like 10% year-on-year. So you can see there's going to be a significant crunch, any day now. And we're gonna sit here in the second quartile, at about $370 per ounce, the orange bar there. You can see we're gonna produce something like 3% of global supply, so it is a globally significant mine. And you can see those South Africans are, you know, shrinking, but also going up in cost. So we're just gonna see the marginal producer drive that price much, much higher in the lead up to us getting into production.
The reserve that we've got, the resource, it starts at surface. It's a fantastic ore body. As you can see there, it's about 2 km by 1 km, the pit at surface, and we're gonna mine an open pit down to 450 m at least, and that is based on bottom of the cycle price environment. We're certainly gonna go much, much deeper if you think about long-term prices getting higher than $1,300. This will go on for a very, very long time. So it's gonna start with a very nice high-grade component near surface. It's gonna be about AUD 100 a tonne NSR rock, and then over the long term, reduced to about AUD 70 a tonne over the long term.
This is where the flow sheet, I guess, where we had the major challenges through 2023-2024. For the first sort of two to three years of test where we couldn't make saleable concentrates. We had no problems creating a saleable copper con, but we had huge problems creating a saleable nickel con. So we got absolutely hammered in 2023 when we came out and said: "We're gonna need to bolt on a POX plant to the nickel circuit." Now, we've scrapped that, and we got the float to work. We've got now an 8% nickel con through the entirety of the grade range, so the recoveries here are absolutely proven, and we spent AUD 15 million on metallurgical test work.
We've had every expert around the world in this space look at this now and go, "Yes, that is a proven, demonstrated flow sheet, with all that test work." We'll get paid fantastically well in the copper con. It's a rich copper PG con. In the nickel con, it's not so good, about 75% payability, sort of average. And then we have a unique trait of our minerals, where there's actually some cyanide-soluble palladium as well, which we get with a leach circuit after floating. So, we've got a strong interest in offtake from a range of parties, but very much commercially standard, proven flow sheet now, and that's what drives the production profile.
As you can see, you know, early days, we're gonna be sort of producing 150,000 oz-180,000 oz of precious metals, ramping up in the next 10 years to sort of 200,000 oz-320,000 oz of PGMs. It's a huge, huge output, along with, obviously, the base metals. And we're gonna mine down to 450 m over 23 years in that open pit, and as you can see there, there's still half of the resource left, but also, we've drilled about 1.5 km down dip of the resource as well, and we're still hitting exactly the same grade, exactly the same sort of material. So this is not gonna be a resource-constrained project.
There is a significant annuity here if you think about those cash flows over a significant period of time. We've had great interest in critical minerals. Obviously, governments are the focus. We've got an AUD 820 million capital estimate to build the project, to build Stage 1. We're gonna do 60%-70% of that with debt, and those funding houses there, those export credit agencies are very, very much keen to provide all of that funding. Then, a huge amount of interest on secondary metals or minor metal streams. A huge amount of interest from other lenders and other hybrid finance providers as well. Unfortunately, I have run out of time, but I will jump to conclude before everyone jumps off to lunch. You know, we remain active exploring.
Thanks for staying an extra minute, but really, we've for those who think this asset is not gonna happen, think again. I guess if you'd heard that it wasn't gonna work based on the previous study, the PFS has absolutely put that to bed. Certainly happy to take people through it if they'd like more detail in person, and I'll let everyone get off to lunch. Thanks, Chris.