Southern Palladium (ASX:SPD) has completed an Optimised Prefeasibility Study (OPFS) for the Bengwenyama Platinum Group Metals Project in South Africa resulting in a new staged development strategy.
Lower capital expenditure is one area of focus that has boosted the project’s funding attractiveness, with a net present value of US$875 million ($1.34 billion) and an internal rate of return of 26.4%.
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 says the company believes a staged development provides a pragmatic and value-driven path forward.
An issue of mining rights is expected in the near-term. Meanwhile, 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 a DFS, a final investment decision will be made.
“A staged development approach for Bengwenyama, reducing peak funding requirements by US$173 million to US$279 million compared to the original PFS, presents a highly attractive option,” Odendaal says.
Odendaal notes 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,” he says.
The option to use existing mineral processing infrastructure in the area – which could result in further reductions in peak funding – is being evaluated.
The Bengwenyama Project, covering 5,280 hectares, has potential to stimulate economic growth and development in rural areas with high unemployment rates by creating job opportunities.
Write to Aaliyah Rogan at Mining.com.au
Images: Southern Palladium
