Southern Palladium slashes costs in major South African mine revamp

Johannesburg, July 10, 2025 – Southern Palladium (ASX: SPD | JSE: SDL) has unveiled a cost-cutting strategy for its Bengwenyama platinum group metals project in South Africa Bushveld Complex.

An optimised pre-feasibility study reveals a 38% reduction in upfront capital costs through phased development, maintaining robust economics with a R15.7 billion post-tax valuation and 26.4% internal rate of return.

The revised plan proposes two production phases, starting with 100,000 ounces of annual PGM output before scaling to 400,000 ounces within four years.

This approach trims peak funding needs to $279 million – $173 million less than original estimates – while preserving a 20-year mine life.

In a statement, Southern Palladium Managing Director, Johan Odendaal emphasised the model reduces geological and operational risks while minimising shareholder dilution.

Located near established mining infrastructure, the Bengwenyama project benefits from proximity to operational mines and processing facilities. Southern Palladium holds 70% ownership, with 30% belonging to the Bengwenyama-ya-Maswazi community.

The company is exploring third-party mineral processing partnerships to further reduce startup costs and accelerate production timelines.

Key next steps include finalizing mining rights approval, conducting metallurgical tests, and integrating study results into a definitive feasibility plan.

The project targets the UG2 reef – a primary PGM source in the Bushveld Complex that accounts for 72% of global reserves – using conventional extraction methods proven across the region.

Southern Palladium phased strategy aims to balance financial prudence with community readiness, aligning infrastructure development with local capacity building for sustainable growth.

The approach positions the dual-listed firm to capitalise on rising demand for platinum-group metals in green technologies and automotive applications.