ASX- and JSE-listed Southern Palladium advises that mining consultant Minxcon has completed an internal scoping study on the Bengwenyama platinum group metals (PGMs) project, located on the eastern limb of the Bushveld Complex, in South Africa, concluding that extracting the upper group two (UG2) reef represents the best potential project development option.
This excludes the unexplored potential within the current tenement area, as well as future economic potential of extracting the Merensky reef.
As part of the scoping study, Minxcon assessed four development scenarios.
It has recommended that Southern Palladium complete its fully funded drilling programme at Bengwenyama and undertake more definitive studies.
Further, the shallow Merensky reef is recommended for potential future development, with Minxcon saying it may significantly extend the life of the mine in the area now earmarked for mining.
Southern Palladium has welcomed Minxcon’s findings and is continuing with its drilling programme to convert inferred resources and the exploration target into higher-category resources and to conclude a prefeasibility study (PFS) as quickly as possible.
The current exploration drilling and upgrade of a proportion of the existing 18.8-million-ounce resource to measured and indicated status will allow for the PFS to be completed.
Results also suggest that a mining right application should be submitted earlier than initially planned.
Trade-off studies, metallurgical test work, environmental studies and a social and labour plan will be initiated during the current quarter.
Eighteen of the originally planned 63 drill holes at the Bengwenyama PGMs project have now been completed.
Importantly, three drill holes now confirm the potential of a Far East Resource Block, an area which was originally thought not to host the UG2 reef, the company highlights.
Drilling restarted on January 12 after the contractor returned from its December break.
“We are pleased to report that our internal scoping study on the Bengwenyama PGMs project confirms our original analysis that UG2 has the best development potential, so much so that we firmly believe that a mining rights application should be submitted sooner than first envisaged.
“The scoping study highlighted the key areas of future work focus to advance the project, especially the decision on reef selection and sequence of mining. It places the emphasis on the UG2 reef, but it does not exclude mining the Merensky reef in future,” MD Johan Odendaal says.
As noted, the board has taken the decision to initiate the PFS during the current quarter.
“This is an excellent development for Southern Palladium which further underpins the company’s value,” Odendaal avers.