The pre-feasibility study for Southern Palladium’s Bengwenyama project is on schedule for completion in October, with the company saying it holds significant cash resources to complete the process.
Despite making advances with its Bengwenyama project, Southern Palladium believes that the global platinum group metals (PGM) market will remain under-supplied over the next three years as companies in the industry, especially those in South Africa, restructure their operations to match suppressed prices of the metal.
Nonetheless, Southern Palladium is pressing ahead with its project. It said yesterday: “The pre-feasibility study remains on schedule to be completed in early Q4 2024 (and) is ongoing with continuous review by SRK. Southern Palladium remains well funded to complete the PFS from existing cash reserves.”
As at the end of June, Southern Palladium held about A$5.43 million (about R64m) in cash resources compared to A$6.85 million in the quarter to March 2024. It said this amount excludes cash held by the company’s 70% subsidiary, Miracle Upon Miracle Investments, which had A$0.79m as at the end of June quarter.
During the quarter to the end of June, Southern Palladium company’s primary focus was on the ongoing advancement of its development programme at the Bengwenyama PGM project in which it holds a direct 70% stake.
The project, located within the Bushveld Complex in a significant underground mining region with established expertise and infrastructure, undertook pre-feasibility drilling activities during the quarter. Final assay results from this will be incorporated into an updated Mineral Resource Estimate (MRE) for the Bengwenyama project.
The Bengwenyama PGM project is targeting an indicated mineral resource of sufficient size and quality to facilitate the commencement of mine planning.
“All samples for the pre-feasibility drill campaign submitted to ALS laboratories in Johannesburg have been received back from the laboratory, allowing for the next MRE to commence. Along with the completion of the drill programme, additional samples have been collected for metallurgical test work to confirm the recovery of by-product chromite from the UG2 Reef,” said the company.
Southern Palladium earlier this year completed extensive scoping studies that indicated the development of a high-grade, low-capital intensity reef underground mining operation at the Bengwenyama project with a post-tax net present value of $700m.
Southern Palladium is of the view that there is a well-established downstream smelting and refining process for PGM concentrates within South Africa. And with most smelters processing the concentrate from the Eastern and Western Limbs of the Bushveld Complex situated in Rustenburg, the company believes its PGM concentrates from the project would be suitable for these facilities and it is now able to initiate discussions with potential offtake parties.
The Bengwenyama project has been shown through scoping studies to have total mining inventory of 10.9 million ounces of PG, of which 54% have indicated status. The project has a low capital intensity profile, with about $403m in peak funding requirement, assisted by a high ore-body grade of approximately 6.55 grams per ton.
BUSINESS REPORT