Southern Palladium Nears $1 Billion NPV Milestone as Mining Right Decision Looms
Southern Palladium’s March quarter report highlights strong project economics from its Bengwenyama PGM project, with a $1.06 billion NPV and a mining right decision expected in Q2 2025. The company is progressing a Definitive Feasibility Study and project optimisation to accelerate production.
- Bengwenyama PGM project positioned in lowest quartile of PGM cost curve
- Pre-Feasibility Study delivers US$1.06bn post-tax NPV and 28% IRR
- Definitive Feasibility Study underway with focus on phased development
- Mining Right Application decision expected in Q2 2025
- Global PGM market in structural deficit supports positive pricing outlook
Strong Economics Confirmed by Pre-Feasibility Study
Southern Palladium Limited (ASX: SPD) has reported a transformational March 2025 quarter, centred on advancing its flagship Bengwenyama platinum group metals (PGM) project in South Africa’s Bushveld Complex. The recently completed Pre-Feasibility Study (PFS) confirms the project’s robust economics, with a post-tax, ungeared net present value (NPV) at an 8% discount rate of US$1.06 billion and an internal rate of return (IRR) of 28%. The study also highlights a capital payback period of approximately 3.5 years from first concentrate production and an all-in sustaining cost of US$800 per 6E ounce, placing Bengwenyama in the lowest cost quartile globally.
The PFS was based on conservative long-term commodity price assumptions, platinum at US$1200/oz, palladium at US$1100/oz, and rhodium at US$6,200/oz, underscoring the project’s resilience even under cautious market scenarios. The project benefits from a high delivered grade, shallow mining depths, and a strategic location near established Tier 1 operations, enhancing its competitive positioning.
Advancing Definitive Feasibility and Project Optimisation
Following the PFS, Southern Palladium has initiated a Definitive Feasibility Study (DFS) with on-site metallurgical and geotechnical assessments underway. The company is exploring a phased development approach aimed at reducing upfront capital expenditure and shortening the production ramp-up period. Results from this optimisation work are expected in the June quarter and are intended to improve project funding attractiveness and accelerate the pathway to production.
Concurrent with technical studies, Southern Palladium is progressing key permitting activities, including applications for a Waste Management Licence and Water Use Licence. The Mining Right Application, submitted in September 2023 and accepted by the Department of Mineral Resource and Energy (DMRE) in October 2023, is anticipated to receive a decision in Q2 2025, representing a critical near-term value catalyst.
Market Dynamics and Strategic Positioning
The global PGM market is currently experiencing a structural deficit, particularly for platinum, rhodium, and ruthenium, driven by supply constraints and strong demand from automotive and industrial sectors. The World Platinum Investment Council’s latest report highlights a platinum market shortfall nearing one million ounces in 2024, with above-ground stocks projected to be depleted by 2026. Rhodium and ruthenium markets are similarly tight, with prices spiking as inventories run low.
Southern Palladium’s project is well positioned to capitalise on these dynamics, with rhodium expected to contribute around one-third of potential revenue. The company’s revenue calculations at current prices remain close to PFS assumptions, indicating strong returns despite recent price volatility.
Financial Position and Corporate Developments
As of 31 March 2025, Southern Palladium held A$2.49 million in cash, excluding A$0.74 million held by its 70% subsidiary Miracle Upon Miracle Investments (Pty) Limited. Quarterly expenditure on exploration and development totalled A$323,000. The company continues discussions with funding partners and has appointed Blackbird Partners to advance debt financing alternatives ahead of the Final Investment Decision (FID).
Payments to related parties during the quarter amounted to approximately A$454,000, including directors’ fees and project management services. Southern Palladium’s management emphasises ongoing engagement with regulators and financiers as it prepares to unlock significant near-term value through mining right approval and project optimisation.
Looking Ahead
With the Mining Right decision expected imminently and DFS results forthcoming, Southern Palladium is poised to transition from development to construction. The company’s strategic focus on a phased development approach could reduce capital intensity and accelerate production, positioning it favourably amid tightening PGM markets. Investors will be watching closely for updates on permitting, financing, and project milestones in the coming quarters.
Bottom Line?
Southern Palladium stands on the cusp of unlocking significant value as regulatory approvals and feasibility milestones converge, but financing and market volatility remain key watchpoints.
Questions in the middle?
- Will the Mining Right be granted on schedule in Q2 2025, and under what conditions?
- How will the phased development approach impact capital requirements and production timelines?
- What financing structure will Southern Palladium secure to fund construction and ramp-up?
