Johannesburg- and Australia-listed Southern Palladium's share price on the JSE jumped by nearly 28% on August 11 after the company confirmed that South Africa's Department of Mineral and Petroleum Resources (DMPR) had granted the mining right for the company's flagship Bengwneyama platinum group metals (PGMs) project, in Limpopo.

The granting of the mining right marks the completion of a comprehensive regulatory engagement process between Southern Palladium and the DMPR following the lodgement and acceptance of the mining right application in October 2023.

"Securing the Bengwenyama mining right is a pivotal catalyst for driving the Bengwenyama project from studies to execution. With the mining right in hand, we can continue to progress the definitive feasibility study's (DFS's) completion, fast-track the project execution plan and operational readiness activities, to mobilise contractors for decline and boxcut works and start early works at the project.

"The significant improvement in our metallurgical results recently announced, including the step-change in chromite recoveries and the inclusion of a dense media separation component in the plant, combined with our mine design optimisations, means the team can confidently convert technical outcomes into constructible workstreams and turnkey schedules. The mining right materially de-risks the pathway to early development," says Southern Palladium MD Johan Odendaal.

Southern Palladium chairperson Roger Baxter adds that the granting of the mining right is the result of constructive and sustained engagement with the DMPR leadership and regulators and the Bengwenyama community and demonstrates the strength of government support and the company social licence to operate.

"The project's location in the Bushveld Complex, the premier PGM jurisdiction globally, gives the Bengwenyama project compelling geological, processing, smelting, refining and infrastructure advantages. With global demand for PGMs remaining firm, driven by multiple, large-scale industrial sectors and emerging technologies such as hard drive storage devices that use PGMs, and ongoing supportive fundamentals, the project is exceptionally well-positioned to deliver strategic, long-term value for stakeholders while continuing to prioritise responsible development and meaningful benefits for our partners, the Bengwenyama community as well as the broader region," he says.

The company notes that its board has approved the start of early boxcut and decline development before the end of this year, subject to the completion of the relevant waste management and water-use permitting processes.

Further, it says the DFS works programme is expected to be delivered in the first quarter of 2027, which is a one-quarter extension to ensure the significant value arising from recent excellent metallurgical test results is fully incorporated into the DFS plant design and optimisation work. 

Southern Palladium notes that, at full steady state Stage 2 production, the project will produce more than 400 000 oz/y of PGMs and one-million tons of high-grade chrome concentrate a year.

The company points out that experienced project director Michiel Breed and underground PGM mine manager France Modau are leading preparations for the project's execution.

Southern Palladium share price on the JSE rose by 27.8% to R23.01 a share on August 11, compared with the close of R18 a share on August 7.