Southern Palladium’s DFS lifts chrome recovery to 85.6%, boosting Bengwenyama’s project value

Metallurgical Breakthrough Elevates Bengwenyama Project

Southern Palladium Limited (ASX:SPD) has unveiled a game-changing advance in its Definitive Feasibility Study (DFS) for the Bengwenyama platinum group metals (PGM) project in South Africa’s Bushveld Complex. Metallurgical test work completed in the June 2026 quarter demonstrated a leap in chrome recovery from a modest 30% assumed in the Prefeasibility Study (PFS) to a striking 85.6%. This improvement effectively triples the expected high-grade chrome concentrate output to about 1.05 million tonnes per annum at Stage 2, elevating chrome from a mere by-product credit to a valuable co-product alongside PGMs.

The enhanced chrome recovery, combined with a modest increase in overall PGM recovery from 85.3% to 87.6%, and a more than fourfold increase in PGM concentrate grades, fundamentally reshapes the project’s revenue profile. The PGM concentrate grade is now expected to reach approximately 444 g/t 4E, compared to 100 g/t in the earlier PFS, producing a smaller volume of higher-value concentrate that opens new avenues for smelter and refining partnerships.

Processing Simplification and Dense Media Separation Integration

The DFS incorporates a simplified conventional processing flowsheet that optimises recovery while reducing technical risk. Key to this is the integration of Dense Media Separation (DMS), which allows for the rejection of 24% to 31% of barren waste rock before milling. This pre-concentration step not only boosts feed grade from around 5.2 g/t 3E to 7.2 g/t 3E but also reduces energy consumption and operating costs by downsizing milling and flotation equipment.

The processing design now features a coarser primary grind that preserves chromite particle size, enhancing liberation and recovery through staged flotation circuits. This approach yields two independent, high-grade saleable products: a PGM concentrate and a chrome concentrate with approximately 42.2% Cr₂O₃ content.

Staged Development Strategy and Project Resilience

The project’s staged development remains intact, with Stage 1 targeting an annual production exceeding 200,000 ounces of PGMs, expanding to over 400,000 ounces in Stage 2 through development of the northern mining area. The significant increase in chrome production diversifies revenue streams, improving the project’s resilience against PGM price volatility and aligning with global stainless steel demand trends.

Southern Palladium’s Executive Chairman Roger Baxter highlighted that these metallurgical optimisations position Bengwenyama as a world-class tier-1 PGM-chrome operation capable of delivering stronger operating margins and enhanced cash flows.

Regulatory and Development Milestones

Despite technical progress, the project’s advancement remains contingent on the granting of the Mining Right by South Africa’s Department of Mineral Resource and Energy and obtaining environmental approvals under the National Environmental Management Act. Early development planning is progressing in parallel with these regulatory processes.

The DFS completion timeline has been extended to early 2027 to incorporate additional optimisation work, including evaluating the potential use of Jameson Cells technology. This technology promises lower energy use, smaller operational footprint, reduced capital costs, and further improvements in PGM recovery and concentrate quality.

Financial Position and Upcoming Activities

Southern Palladium ended the quarter with a robust cash balance of A$23.88 million, excluding nearly A$1 million held by its 70% subsidiary Miracle Upon Miracle Investments. The company spent approximately A$1.3 million on exploration and evaluation activities during the quarter, focusing on drilling, technical studies, and environmental planning.

Looking ahead, the company plans to complete Phase 2 drilling, finalise mine planning, continue metallurgical optimisation, and advance DFS engineering. Engagements with Eskom and regional water providers are ongoing to secure essential bulk electricity and water supply for the project.