Key Highlights

  • The Updated PFS lifted post-tax NPV by 129% to US$1,961 million at an 8% real discount rate, with a 39.1% post-tax IRR and 2.8-year payback.
  • The Mining Right for Bengwenyama was granted on 7 August 2026 for an initial 30 years over about 5,280 hectares.
  • DFS test work estimated full-plant chromite recovery of 85.6% against 30% in the earlier PFS, with overall PGM recovery of 87.6%.
  • Cash at 30 September 2026 was A$20.06 million, down from A$23.88 million at 30 June.

Southern Palladium Limited (ASX:SPD) reported a September 2026 quarter in which the Bengwenyama PGM-chrome project in South Africa's Bushveld Complex gained a Mining Right, new metallurgical results and, after quarter end, an updated prefeasibility study. The study, released on 13 October, put post-tax net present value at US$1,961 million at an 8% real discount rate, up 129% from US$857 million in the July 2025 optimised study. Cash at 30 September was A$20.06 million, and the company's exploration, evaluation and development payments for the quarter totalled A$1,933,331.

Updated PFS Economics

Prepared by Minxcon, the Updated PFS lifted the post-tax IRR from 26.4% to 39.1% and cut payback from first production from 3.8 years to 2.8 years. Peak funding rose 18% to US$329 million from US$279 million, which the company attributes mainly to forecast rand appreciation against the US dollar, while the rand-denominated estimate of about ZAR5.47 billion was almost unchanged. All outcomes are shown on a 100% project basis.

The realised 6E basket price assumption rose 57% to US$2,210 per ounce from US$1,406, while all-in sustaining cost including by-product credits increased 29% to US$943 per 6E ounce from US$729. The AISC margin moved from 48% to 57%. Long-term real price inputs include platinum at US$1,738 per ounce, palladium at US$1,196, rhodium at US$8,817, gold at US$3,500 and 42% chrome concentrate at US$280 per tonne CIF China. Life-of-mine 6E recovery was set at 87.5%, lifting recovered metal to 7.72 Moz from 7.50 Moz. The study carries an accuracy range of about plus or minus 15 to 25%, and its production target comprises 19% Measured, 51% Indicated and 30% Inferred resources by tonnage.

Chrome Moves to a Co-Product Role

Definitive feasibility study test work announced on 9 July 2026 estimated full-plant chromite recovery of 85.6% at a concentrate grade of 42.2% Cr2O3, compared with the 30% assumed in the earlier PFS. Overall PGM recovery was estimated at 87.6% against 85.3%, and a locked-cycle test produced a final concentrate of 505.9 g/t 6E at a 1.2% mass pull.

The Updated PFS forecasts chrome concentrate output of about 450,000 tonnes a year in Stage 1 and about 1 million tonnes a year at Stage 2 steady state, taking life-of-mine production to 17.2 Mt from 6.0 Mt. The flowsheet uses dense media separation to reject low-value waste before milling, cutting the tonnes sent to grinding by 26 to 31%. Stage 1 envisages 100,000 tonnes a month from the South Decline, expanding to 200,000 tonnes a month through the North Decline.

Mining Right and Development Preparations

South Africa's Department of Mineral and Petroleum Resources granted the Mining Right on 7 August 2026, ending a process that began with an application in October 2023. The right runs for an initial 30 years with an option to apply for renewal and covers PGMs, gold, copper, chrome, cobalt, silver and nickel. The Board has approved early box-cut and decline development, expected to start in the first quarter of 2027, subject to remaining waste management and water use permits.

Bengwenyama holds a combined JORC Mineral Resource of 40.25 Moz and a 6.29 Moz 6E Probable Ore Reserve in the UG2 reef, with a planned mine life of 33 years. Southern Palladium owns 70% of Miracle Upon Miracle Investments, which holds the project, with the Bengwenyama Traditional Council holding the remaining 30%.

Quarter-End Financial Position

Cash of A$20.06 million excludes A$1.13 million held by the 70% subsidiary, bringing combined cash and term deposits to about A$21.19 million. Drilling accounted for A$1,161,028 of quarterly expenditure, up from A$396,906 in the June quarter. Director payments totalled A$214,000, and payments to Minxcon, a related party of two directors, were about A$541,000.