Southern Palladium (ASX:SPD) has completed an Optimised Prefeasibility Study (OPFS) for its Bengwenyama Platinum Group Metals Project in South Africa, outlining a new staged development strategy. Southern Palladium is focused on the exploration and development of platinum group metals. The Bengwenyama Project has the potential to stimulate economic growth and development in rural areas with high unemployment rates by creating job opportunities.
The OPFS indicated a net present value of US$875 million ($1.34 billion) and an internal rate of return of 26.4%, bolstering the project’s funding attractiveness by focusing on lower capital expenditure. The staged production assumes an initial stage one production rate of 100,000 tonnes per year, expanding to 200,000 tonnes after four years, over a 20-year mine life.
Managing Director Johan Odendaal stated the company believes a staged development provides a pragmatic and value-driven path forward. The company anticipates an issue of mining rights in the near term. A fully funded infill drilling and metallurgical test work program will be incorporated with the OPFS results into a planned Definitive Feasibility Study (DFS). Upon completing the DFS, a final investment decision will be made.
Odendaal noted that cash costs for both stages of the project are attractive and lie within the lowest cost quartile for the global platinum group metals industry. Stage one cash costs are estimated at US$875 per ounce, reducing to US$750 per ounce for stage two. The company is evaluating the option to use existing mineral processing infrastructure in the area, which could further reduce peak funding requirements. A staged development approach reduces peak funding requirements by US$173 million to US$279 million compared to the original PFS.
