PLATINUM Group Metal (PGM) exploration firm Southern Palladium today published promising results from a geotechnical study of its Bengwenyama prospect.
Bengwenyama is rich in palladium and rhodium and is located south of the Modikwa PGM mine which is jointly owned by African Rainbow Minerals and Anglo American Platinum. Southern Palladium has a 70% stake in the Bengwenyama project with the balance held by Bengwenyama-ya-Maswazi, the local community.
In an update published on the JSE, where Southern Palladium has a secondary listing, the company said the geotechnical study showed less dilution at Bengwenyama, implying a higher-than-previously expected reserve grade. Mining below 50 metres would also result in less disruption to surface infrastructure. A combination of conventional and mechanised mining could also be supported by the deposit.
“All parameters are in line with existing Bushveld UG2 operations,” said Johan Odendaal, MD of Southern Palladium.
The company also confirmed its mining right application had been confirmed by South Africa’s Department of Mineral Resources. This would pave the way for environmental expert studies and consultations, it said.
However, the PGM market has deteriorated significantly since May 2022 when Southern Palladium raised raised A$19m in an initial public offering. Palladium and rhodium prices have fallen 43% and 71% respectively since that time.
At the time of its IPO, Southern Palladium estimated a metal basket price for sales for the UG2 site is about $3,331 per oz while metal mined from the Merensky reef in the orebody would be about $1,994/oz.
Shares in the company have fallen 56% in the last 12 months.