SOUTHERN Palladium, a JSE-listed exploration company, said on Thursday it had raised A$16m (R185m) through an issue of shares.
The proceeds are earmarked for a definitive feasibility study and early mine works at its Bengwenyama platinum group metal (PGM) prospect.
“We are pleased to have attracted such strong support from our existing institutional investors, led by a cornerstone investment from one of our largest shareholders, while also attracting new institutional investment,” said Roger Baxter, executive chair of Southern Palladium.
“The targeted raise provides the company with a strong cash runway to implement our near-term project objectives, including accelerating the DFS for a two-stage development pathway with lower upfront costs,” he added.
Southern Palladium said it had issued 16 million shares at market; in other words, at no discount to its June 6 price of A$0.50 per share. The issue also represents a 10.5% premium to its 10 day volume-weighted average price.
Fortuitously, the company’s capital raise comes with some tailwinds as PGM prices are demonstrating some upward mobility. The platinum price has gained nearly 15% in the last seven days taking year-to-date gains for the metal to 36%. Palladium, meanwhile, is 8% higher in the last week, representing nearly 20% in gains this year.
Situated on the eastern Bushveld, Bengwenyama is estimated to contain 6.92 million ounces at a grade of 6.17g/t. As per a prefeasibility study, mine construction is planned to be from the fourth quarter of 2026 until 2029. Annual production of 400,000 ounces of platinum group metals is forecast at an all in sustaining cost of $800/oz at full tilt.
The project is scoped to cost $450m.
Despite the company’s name, Bengwenyama’s prill split is balanced towards more platinum production than palladium taking into account both UG2 and Merenskey reefs.
In May, Southern Palladium said it had received environmental authorisation for Bengwenyama, a precursor to a mining right. The EA covers underground mining as well as certain surface infrastructure.
Of the money raised, A$4m was from one of Southern Palladium’s largest shareholders as well as from “a small number” of new and existing institutional investors.
