Southern Palladium’s Bengwenyama platinum group metal (PGM) project has moved from paper to a venture that is looming large on the horizon, says MD Johan Odendaal.

The Bengwenyama project is 70% owned by Southern Palladium and 30% by the Bengwenyama community.

Odendaal and Southern Palladium executive chairperson Roger Baxter this week briefed the investment community and media on the project with its UG2 and Merensky orebody on the eastern limb of the Bushveld Complex.

Odendaal is confident that the definitive feasibility study on the project – “the last piece of shallow real estate in the area” – will be completed in the third quarter, with the project set to break ground in June.

“We should touch the reef in February, 2027, intersecting at 80 m.”

Baxter says the Australian- and JSE-listed junior miner is fully funded to the south boxcut decline – Phase 1 – with the cash from this to fund the second phase of the project – the north decline.

The cost to develop the south decline is estimated at $279-million.

This number can drop by roughly $100-million, however, should the company process its ore at a nearby, third-party concentrator plant, which would negate the need to build such an operation on-site.

Baxter says there are plants on the Eastern Limb with capacity to spare. He expects discussions on this matter to be wrapped up in the next six months.

He also believes that the Bengwenyama project could reach steady-state production at the south decline of around 200 000 oz/y around 2030.

Odendaal emphasises that the south decline is a viable project in its own right, and that it does not exist solely to enable the north decline as the ultimate prize.

The project’s current probable ore reserve is stated as 6.29-million ounces.

Within Bengwenyama’s revenue basket, 26% will flow from platinum, 24% from palladium, 28% from rhodium and 12% from chromite, with the rest a mix of other resources.

Odendaal notes that the company will work to maximise the operation’s chrome output.

The one sticky part on the timeline is that Southern Palladium has not yet been awarded the mining right for the project from South Africa’s Department of Mineral and Petroleum Resources (DMPR).

The boxcut cannot be made without Southern Palladium first bagging the mining right.

Baxter says the company has completed all the necessary regulatory requirements and emphasises that there are no outstanding queries.

“We had discussions with the DMPR in December and January and they all point in the right direction.

“We are confident that the mining right will come through soon and that it will not affect our timeline.”

Baxter is equally optimistic about the outlook of PGM prices, which have seen a significant upswing recently.

“On a structural level platinum supply is weak and there has been very little investment in South Africa. Platinum is in a deficit and will remain so for a number of years, while palladium supply is more balanced.”

South Africa’s Bushveld Complex hosts around 72% of the world’s PGMs.