Southern Palladium Secures Environmental Approval and Cuts Peak Funding by 38%

Environmental Approval Clears Major Regulatory Hurdle

Southern Palladium Limited (ASX – SPD) marked a significant milestone in the June 2025 quarter with the receipt of Environmental Authorisation (EA) for its flagship Bengwenyama platinum group metals (PGM) project in South Africa. This approval, granted by the Department of Mineral and Petroleum Resources, follows an extensive regulatory engagement and public participation process, and is a critical step towards the award of the Mining Right. Notably, no objections were lodged during the objection period, underscoring broad stakeholder acceptance.

Optimised Pre-Feasibility Study Highlights Strong Economics

Shortly after the quarter ended, Southern Palladium released an optimised Pre-Feasibility Study (OPFS) that reaffirms the project’s robust value proposition. The study outlines a staged development approach, starting with a 1.2 million tonnes per annum production rate expanding to 2.4 million tonnes after four years. This strategy reduces the peak funding requirement by 38% to US$279 million, significantly improving the project's fundability. The OPFS delivers a post-tax net present value (NPV) of US$857 million and an internal rate of return of 26.4%, positioning Bengwenyama as one of the most attractive PGM projects globally.

Capital Raise Supports Next Phase of Development

To underpin the next phase of project advancement, Southern Palladium successfully completed a strategic share placement, raising A$8 million at $0.50 per share; a 10.5% premium to the 10-day volume weighted average price. The placement attracted strong support from cornerstone shareholders and new institutional investors, providing the company with a healthy cash balance of nearly A$10 million. These funds will finance metallurgical, geotechnical, and infill drilling programs that feed into the upcoming Definitive Feasibility Study (DFS), expected to further de-risk the project.

Favourable Market Dynamics Bolster Project Outlook

The timing of these developments coincides with a notable upswing in PGM prices, particularly platinum, which has surged to a decade-high above US$1,420 per ounce. Structural supply deficits persist, driven by declining mine output and robust demand from jewellery, automotive catalysts, and industrial sectors. The World Platinum Investment Council forecasts continued deficits over the next five years, reinforcing the strategic value of Bengwenyama’s rich PGM resource. Southern Palladium’s conservative price assumptions in the OPFS suggest potential upside as market conditions evolve.

Looking Ahead – Drilling and Mining Right Approval

Southern Palladium plans to commence drilling activities in August 2025, with assay results to be integrated into the DFS. The company is also finalising its project execution plan, aiming for a final investment decision by mid-2026. Meanwhile, the Mining Right approval process is progressing, with the grant anticipated in the near term. These steps will be critical in transitioning Bengwenyama from a development-stage asset to a producing mine, unlocking significant shareholder value.