JOHANNESBURG (miningweekly.com) – The Bengwenyama platinum group metals (PGM) project in South Africa’s Limpopo province has received a major uplift through a staged development plan that cuts upfront capital costs by 38%.

Staged development reduces peak funding by $173-million to $279-million, Southern Palladium MD Johan Odendaal outlined to Mining Weekly in a Zoom interview. (Also watch attached Creamer Media video.)

The Sydney- and Johannesburg-listed Southern Palladium holds a 70% interest, with the remaining 30% owned by the Bengwenyama-ya-Maswazi community.

Located on the eastern limb of South Africa’s Bushveld Complex, Bengwenyama is strategically positioned near established mining infrastructure.

The optimised prefeasibility study (PFS) values the project at R15.7-billion ($857-million) on a 100% post-tax basis, with a projected internal rate of return of 26.4%.

Importantly, the staged approach also improves the ability to further derisk key geological, technical, and operational assumptions.

The first stage of the proposed two-stage production plan begins with 100 000 oz of PGM production and ramps up to 200 000 oz/y and the second stage is designed to deliver production of 400 000 oz/y after four years for an aggregate mine life of 20 years plus.

With the first stage expected to deliver a strongly cash generative project in its own right, the option to phase the development of the mine provides a balance between unlocking project value and funding project development with minimal future dilution for shareholders. It also allows Southern Palladium to align project development with infrastructure roll-out and community readiness, ensuring a more sustainable and inclusive growth trajectory.

“The beauty of it is that we can fund the second stage of this project through the cash flow that will then be generated by the Stage 1 project,” Odendaal pointed out.

The optimised PFS was done at a basket price used in the earlier PFS, which is 7% lower than the current basket price.

Southern Palladium has also outlined several key next steps, including the anticipated award of the mining right, funded infill drilling and metallurgical testwork, the integration of the optimised PFS outcomes into a definitive feasibility study (DFS).

Mining Weekly: Can you give us more insight into the DFS work programme?

Odendaal: We kicked off the DFS earlier this year, and it will carry on for the remainder of this year, and probably into early 2026. What we need to do now is to focus on the metallurgical side. We’ve completed pitting for the met assays, and we’ve engaged a contractor to do a bit more drilling specifically for the met assays, which are more detailed than those done during the PFS. The original plan was to access the orebody via two declines, and this has now been reduced, which is what brought about the capital savings, not only on the feasibility side, but also the fact that initially we’ll only open up access in one decline, which will also give us early access. We also have an accelerated development plan in that specific decline, which will give us quite a steep ramp-up to our required tons and production.

What are the broader implications for investors and the PGMs market?

From the investor side, I think we've now already shown through the process that we deliver on what we say. Throughout the process, in terms of our exploration programme, we managed to bring in the exploration and deliver that PFS with two-thirds of our budget. What we seeing is that it's a project that's now really coming to the fore, and we’ve demonstrated, both through the PFS and this optimised study, that it's certainly a prime project that's up with the best projects in the area. We’ve managed to significantly reduce the required capital to $279-million, and the other important aspect is that this is probably the last real estate in the shallow area of the eastern limb and certainly also on the western limb of the Bushveld Complex.

MINERAL PROCESSING

Southern Palladium is evaluating the use of third-party mineral processing infrastructure in the region. If viable, this option could reduce initial capital costs further and accelerate the timeline to first production.

The Bushveld Complex contains some 72% of the world's PGM resources.

The Bengwenyama property encompasses upper group two (UG2) reef and Merensky reef, which span from the surface to a depth of 1 100 m over a downdip stretch of 10 km.

These two reefs represent primary economic deposits that are exploited by other platinum mining companies for PGMs, base metals and chrome.

Southern Palladium is focused on the UG2 reef, which is the predominantly mined reef in the area. Both reefs can be extracted through underground mining methods. The PGM ore from these reefs can be processed using conventional methods used throughout the Bushveld Complex.