Could you provide an overview of the Bengwenyama PGM project and key milestones to date? 

Southern Palladium listed on the ASX in June 2022, raising US$19 million in the IPO. At every step of our journey, we have outperformed expectations. Since the listing, we spent US$15 million in exploration, prooving up a 40 million oz resource (and 6 million oz reserve) at our Bengwenyama project in South Africa. At the beginning of 2024, we produced a scoping study, which was shortly followed by a PFS released in October. The PFS demonstrated Bengwenyama as a significant, tier-one, low-cost, high-grade, and close-to-surface PGM deposit. Southern Palladium is now ready to move to the DFS in 2025, with the goal of reaching a final investment decision (FID) in 2026. We completed the environmental authorization and community consultation work, and are expecting the mining right to be granted in Q2 2025. 

What can you tell us about the PGM “neighborhood” where the Bengwenyama project is located?

We are located on the Far Eastern limb of the Bushveld Complex, in what can be called a prime PGM mining real estate – with Anglo American Platinum’s Modikwa mine and African Rainbow Minerals’  Two Rivers project as our neighbors, as well as two Eskom substations nearby, the De Hoop dam next door, and top-caliber mining skills. 190,000 people have been historically employed in the PGM sector in South Africa. No other place in the world compares to South Africa’s geology for PGMs. South Africa also has the smelting and refining capacity which is an advantage compared to the  lack of this smelting/refining emerging PGM jurisdictions. South Africa dominates global platinum production, accounting for 4 million oz annual output out of the 5.6 million oz mined globally. 

Could you elaborate on the PFS results, mine plan, and capex required to develop the project?

We are mining a narrower mining width (at about 1 m stoping width as opposed to 1.2 m mined by our peers), mostly thanks to our higher grades: 6.1 g/t in our plant feed, with some higher grades at just below 10 g/t (in the reserve ore) of the 6Es - six PGMs plus gold). From the 2.4 million t/y plant, we will generate about 120,000 t/y of concentrate, processed down to 400,000 oz of 6Es. 28% of our total revenue stream will come from rhodium (which is lower-volume but higher value), 26% from palladium, 12% from chrome, 4% from iridium, and 6% from gold and base metals. The capex to develop the mine is US$450 million, spread over up to five years. Our AISC on a 6E ounce basis is in the lowest-cost quartile, at US$800/oz. 

Based on the recent PFS, we are looking at a post-tax total project EBITDA of around US$5 billion, with about US$200 million/year of free cash flow generated from year five of production onwards. Using an 8% discount rate, our post-tax NVP is US$1 billion; this is nicely leveraged to the platinum basket price, with an increase of about US$350 million for every 15% increase in the basket price. Similarly, our IRR, sitting at about 28%, is geared to higher prices, but also resilient to lower prices, with the IRR going down to about 21% for a 15% decline in the basket price. 

The Bengwenyama project has a 29-year LOM based on current resources, but the upside potential and the opportunity to increase the LOM is immense. The socioeconomic impact of developing the project is also commensurate. Bengwenyama will generate direct employment for 4,500 people; export earnings and tax revenues will benefit the country and significant opportunities and development will accrue back to the local community. Southern Palladium owns 70% of the project, while the remaining 30% stake is owned by our local partners the Bengwenyama people who are represented through the Bengwenyama Traditional Council and Royal Family. The Bengwenyama project is a flagship not just for Southern Palladium, but for South Africa. 

How could South Africa attract more exploration dollars?

The new online cadastral system is a great starting point to encourage exploration. The South African stakeholders need to work on improving access to venture capital funding in South Africa. The South African investor marketplace is not well geared towards venture capital funding. The focus on resolving the electricity, logistics and security challenges will continue to make South Africa more attractive to foreign and local investment.

*This interview was conducted in late 2024.