Southern Palladium is coming to the pointy end of development at Bengwanyama and is preparing to move into construction, a relatively fast evolution since its $19 million ASX float in 2022.

Bengwenyama has a resource of 40.25 million ounces of 7E – comprising platinum, palladium, rhodium, gold, iridium, osmium and ruthenium.

“Even though we’re called Southern Palladium, we’re not going to be a palladium producer,” executive chairman Roger Baxter told the Africa Down Under Conference in Perth this week.

“We’re going to be a platinum group metal and chrome producer, so we’re going to be producing the entire suite of PGMs – six of them – a bit of gold, a bit of copper, a lot of chrome.

Despite the headlines, Baxter pointed out that the best performing precious metal in 2025 wasn’t actually silver or gold, but ruthenium.

“Ruthenium is used in hard disk storage technology and was up 157% last year,” he said.

“The other platinum group metals are used in a wide range of different uses, from catalytic converters, industrial applications, health applications, investment and in jewellery, so very diverse uses for these metals, and we very much see them as metals for the future, as well as being metals in the present.”

South Africa improving

South Africa does not typically have a good reputation in terms of mining investment, but Baxter, a former CEO of the Minerals Council South Africa, said things were changing.

“I can’t tell you how many times I get asked by people, don’t you have challenges on electricity supply? And I answer that question by saying, we haven’t had load shedding in South Africa for over three years,” he said.

“In fact, Eskom has got a surplus, and that surplus means that they are going back to large industrial customers and offering them cheaper prices.”

Baxter also noted that South Africa was recently upgraded by Standard and Poor’s to one notch below investment grade.

“That’s the first upgrade that’s taken place in 17 years, and we’ve also seen South Africa being removed from the Financial Action Task Force grey list at the end of last year,” he said.

“So again, it just demonstrates the progress that the country is making from an investability perspective.”

Last month, Southern Palladium was granted a 30-year mining right by the South African government.

“A lot of hard work went into that, working with government on this really important brand new project in South Africa.”

Bengwenyama

In mid-2025, Southern Palladium released an optimised prefeasibility study for Bengwenyama.

The study outlined a staged project, assuming an initial production rate of 100,000 tonnes per annum, expanding after four years to 200,000tpa.

The stage one project has a peak funding requirement of US$279 million, with the stage two expansion capital to be funded through cashflow.

The study returned a project-level post-tax net present value (8% discount rate) of US$857 million with an internal rate of return of 26.4%.

“This is a definite tier one,” Baxter said. “We define it as probably the least known, best quality, undeveloped platinum group metal project in the world.”

The definitive feasibility study is well underway, with recent metallurgical results exceeding both the PFS and the company’s expectations.

It included a near-trebling of chrome recoveries, which Baxter said could lift the project NPV to well over US$2 billion.

The DFS is due to be completed in the first quarter of next year, with a resource update due in the December 2026 quarter.

“The board is so confident of the project that we are looking at early decline development starting at the end of this year ahead of the DFS and ahead of FID,” Baxter said.

New project director Michiel Breed started with the company this week to lead that process, with contracts expected to be awarded shortly.

“We’ll be basically intersecting reef in the third quarter of next year, which is quite quick development for a PGM operation,” Baxter said.

Southern Palladium is also preparing to ramp up funding and offtake talks.

The company believes it can secure a potential pre-pay deal for the chrome production with discussions underway.

“We think a big funding chunk can come out of that, and then obviously on the PGM concentrate side, we will re-engage with the majors – we were waiting for the mining rights and for our met results before we started that process,” Baxter said.

“We’ve got staged funding at an equity level, which we’re not going to dilute our existing shareholders, and we’re engaging with the banks on debt funding options, which obviously is pretty interesting.

“We think that this is the next best project to be developed in the PGM space globally.”