JSE- and ASX-listed Southern Palladium has announced the results of a prefeasibility study (PFS) for its 70%-owned Bengwenyama project in the eastern limb of the Bushveld Complex in South Africa, which MD Johan Odendaal says marks a significant step forward in advancing the project.

Since the scoping study, Southern Palladium has identified several opportunities to enhance the physical and financial metrics, including completing the drilling programme; increasing resource confidence, identifying footwall mineralisation in the Upper Group 2 (UG2) reef; optimising the initial secondary decline to reduce development time; accelerating the production build-up; increasing average yearly production; completing chrome metallurgical tests to improve recovery understanding; changing the mining method; and significantly increasing the detail and accuracy of the technical work, Odendaal points out.

Over the first five years of the project, 87% of ore production will come from Joint Ore Reserves Committee (Jorc) compliant measured and indicated resource classifications, and 94% over the first ten years.

Jorc measured and indicated resources account for 74% of the total planned ore production over the life-of-mine.

“Additionally, we are excited to announce a maiden Jorc probable reserve of 6.29-million ounces at 6.17 g/t platinum group elements (6E) on the UG2 reef over a 1 m stoping width,” Odendaal highlights.

This maiden reserve is underpinned by the considerable mineral resource update announced in October, which saw the total resource increase to 40-million ounces, including 7.92-million ounces at 9.653 g/t PGE (6E) in the Jorc measured and indicated categories.

“This represents a notable leap in resource confidence since our initial 18.8-million ounces inferred resource reported in July 2021. The successful conversion of measured and indicated resources to probable reserves is a testament to our focused resource definition drilling programme over the past two years,” Odendaal avers.

Extensive metallurgical testing during the PFS phase has further de-risked the project, demonstrating high and consistent recoveries for both platinum group metals (PGMs) and chrome. Notably, the project’s post-tax net present value has increased by 52% to $1.059-billion, up from $698-million in the scoping study, Odendaal points out.

Capital costs for the plant and infrastructure have been refined, decreasing by 6% to $385-million. This figure includes a 15% contingency.

With an estimated all-in sustaining cost of $800/oz (6E), the Bengwenyama project will be positioned in the lowest quartile of the platinum industry cost curve, Odendaal highlights.

“The PFS results are compelling and firmly establish Bengwenyama as a Tier 1 PGM asset. The study confirms the commercial viability of the project, and we are now preparing to progress to a definitive feasibility study, which is expected to be completed in 2025.

“Additionally, during the last quarter of 2024, we will explore further value-adding opportunities ahead of the financial investment decision. We have also made progress in advancing debt financing options with the appointment of Blackbird Partners,” Odendaal says.