Southern Palladium's new staged development path for Bengwenyama Project

SOUTHERN Palladium has released an Optimised Prefeasibility Study (OPFS) for its 70%-owned Bengwenyama Project that outlines a staged development approach that should reduce capital costs by $173 million (R3.1 billion) to $279m (R4.9bn) compared to the first study, presenting a “highly attractive option” for shareholders.

- EDWARD WEST

The board of the Australia and JSE-listed company said Thursday that the staged production option provides the best balance between unlocking project value and allows the company to fund project development with minimal future dilution for shareholders.

"We are pleased to announce the results of the OPFS for the Tier 1 Bengwenyama Project where our primary aim has been to reduce the initial capital requirement," said MD Johan Odendaal.

"The board and its consultants have evaluated a number of options and believe that a staged development provides a pragmatic and value-driven path forward.”

Project level NPV (net present value) (after tax, 100% basis) for the OPFS was estimated at $857m (A$1.3bn), and an internal rate of return was at 26.4%. A staged production proposal assumed an initial Stage 1 production rate of 100ktpa expanding after 4 years to 200ktpa.