Johan Odendaal

SOUTHERN Palladium is a rare species on the JSE – it is an exploration stock. What’s more it’s a platinum group metals (PGM) exploration company pushing ahead with the drilling and assessment of a project at a time when the South African PGM industry is going through the floorboards. The share prices of the major PGM producers have more than halved over the past year and industry talk is of more cost-cutting and closure of non-profitable shafts.

Not a good background against which to be talking up an early-stage palladium project which, even if it proves as good as Odendaal and his colleagues are saying, is an estimated 10 years from getting into production. The response from explorers to that is, of course, that by the time their project comes on stream the market will have recovered. For now Southern Palladium is doing what all good exploration firms do which is publish promising-looking drill results and resource estimates as it works through the various stages of exploration and feasibility assessment. There was a setback in May last year when chairperson Terence Goodlace – a former Impala Platinum CEO – resigned owing to a conflict of interest with his other board positions.

He was replaced in November by former Minerals Council CEO Roger Baxter who should be able to help with Southern Palladium’s mining right application submitted in October. He’s had plenty of experience dealing with the South African government’s mining bureaucracy. South Africa needs more exploration companies like Southern Palladium, but investors would do well to heed serial developer John Teeling’s famous assessment that “high risk high reward means you will lose your money most of the time”.