Southern Palladium unveils “tier one” Bengwenyama project

SOUTHERN Palladium on Thursday published a prefeasibility study of its 70% owned Bengwenyama project in which it estimated first positive cash flow some seven years after construction of the $698m is scheduled to begin.Johan Odendaal, MD of Southern Palladium described the study as “a significant step forward” in which the tier one credentials of the eastern bushveld reserve – estimated to be 6.92 million ounces at a grade of 6.17g/t – had been established.Mine construction will be from the fourth quarter of 2026 until 2029, based on the current schedule. Annual production of 400,000 ounces of platinum group metals is forecast at an all in sustaining cost of $800/oz.Despite the company’s name, production from Bengwenyama is fairly evenly split between palladium (24% of total forecast revenue), platinum (26%) and rhodium (28%). Twelve percent of revenue will be from chromite. Iridium is also present.The prefeasibility report builds on an earlier scoping study which estimated a $408m project producing 330,000 oz at an all-in sustaining cost of $836/6E oz at a post tax net present value of $700m. This NPV has been upgraded to $1.06bn.The Bengwenyama orebody neighbours Modikwa which is jointly owned by African Rainbow Minerals and Anglo American Platinum.Shares in Southern Palladium doubled in value to R7.49/share last week but are unchanged today. At the current price, the company is valued at A$66.4m (R768.5m).The prefeasibility comes amid cautious investor sentiment towards platinum group metals. The palladium price is up about 25% in the last three months but it is way off the $3,000/oz+ level of mid-2022. The rhodium price is also heavily down while platinum is yet to substantially take off despite evidence of a fundamental supply deficit in the market.The retraction in PGM prices has seen South African miners scale back on projects (as well as some production, especially in palladium). The negative market sentiment and an uncertainty about the trajectory of PGMs in the automotive market and processing capacity prompted CEOs such as Northam Platinum Holdings’ Paul Dunne to doubt whether significant new production would be built in the future.“It is highly improbable we will see new investment in new prospects especially if they don’t have processing capacity. New projects are highly improbable,” said Dunne. “Current prices remove the incentive price for new mines which will see a depletion of South Africa’s resource base. The damage has been done and depletion is inevitable,” he added.Said Odendaal: “The study confirms the commercial viability of the project, and we are now preparing to progress to a definitive feasibility study which is expected to be completed in 2025”. Southern Palladium had also appointed Syndey-headquartered firm Blackbird Partners to assist with “advancing debt financing options”.The post Southern Palladium unveils “tier one” Bengwenyama project appeared first on Miningmx.Weiter zum vollständigen Artikel bei Mining.com Weiter zum vollständigen Artikel bei Mining.com