Southern Palladium said yesterday that it was well funded to complete pre-feasibility studies at its Bengwenyama platinum group of metals (PGM) project in South Africa’s Bushveld Complex as it is sitting on cash reserves from its cash position of $8.34 million (R158m) as at the end of December 2023.
After recently completing scoping studies for the project, Southern Palladium is of the view that there is a well-established downstream smelting and refining process for PGM concentrates within South Africa.
And with most smelters processing the concentrate from the Eastern and Western Limbs of the Bushveld Complex situated in Rustenburg, the company believes its PGM concentrates from the project would be suitable for these facilities and it is now able to initiate discussions with potential off-take parties.
Southern Palladium has been buoyed by the Bengwenyama project’s strategic positioning in an active mining region. It will be able to leverage on existing infrastructure as well as knowledge from already operational projects in the region and will complete the pre-feasibility studies using the $8.34m reserves it has under its current cash position.
“With over 30000m of drilling completed, we are now transitioning towards the completion of a pre-feasibility study. Notably, the initial target area in Eerstegeluk has been successfully converted to indicated mineral resources by the end of 2023, marking significant progress,” said Johan Odendaal, the managing director for Southern Palladium.
Although assay results for the North Horst block were still pending, the Bengwenyama project already boasts an existing indicated and inferred mineral resource estimate of 26.2 million ounces of PGM.
To ensure the utmost standards of due diligence, added Odendaal, Southern Palladium had enlisted SRK Consulting to conduct a comprehensive review of its ongoing work on the project. The company expects to complete the pre-feasibility study at Bengwenyama in the fourth quarter of 2024.
“The Environmental Impact Assessment, a core component of the forthcoming Mining Right application, is also progressing well and remains on schedule to be submitted for review by mid-2024,” said Odendaal.
With the pre-feasibility study exploration phase coming to an end, the main activities at the Bengwenyama project have now been focused on “completion of the PFS and the Environmental Impact Assessment as part of the company’s forthcoming Environmental Impact Report (EIR) submission for the granting” of mining rights for the project.
Preliminary testing had also indicated that the Bengwenyama UG2 Reef can be treated using conventional methods. Earlier indications have been positive for “outstanding metallurgical recoveries of between 85% and 80% with concentrate grades of 130 to 250 grammes” per ton.
Scoping studies at Bengwenyama have indicated a life of mine on the UG2 reef only at an estimated 36 years for an average annual production rate of 330 000 ounces PGM. Cash costs for the project are expected at the low end of the global cost curve for PGMs.
Southern Palladium is weighing up options for the development of a shallow underground mining operation targeting the approximately 2 million tonnes per year UG2 reef via decline systems and employing a hybrid mining method utilised at neighbouring mines.
“The mill feed is characterised by a head grade of 6.55g/t (7E). Processing will involve conventional flotation and spiral plant techniques to produce a marketable PGM concentrate with an anticipated recovery rate of approximately 85% for the major metals. Additionally, a chrome concentrate will be produced for sale in export markets,” said the company.
The initial capital spend for Bengwenyama has been estimated at $408m at conservative commodity price assumptions of $1 200 per ounce for platinum, $1 100 per ounce for palladium and $5000 per ounce for rhodium. Bengwenyama will have an expected life of mine earnings before interest, tax, depreciation and amortisation totalling $5.2 billion.
BUSINESS REPORT