South African PGMs explorer raises $19m in IPO ahead of listing on ASX, JSE

19th May 2022 By: Chanel de Bruyn - Creamer Media Senior Deputy Editor Online

South African PGMs explorer raises $19m in IPO ahead of listing on ASX, JSE

South Africa-based minerals explorer Southern Palladium, which is focused on platinum group metals (PGMs), and which is headed up by MD Johan Odendaal and chairperson Terence Goodlace, has raised $19-million in an initial public offering (IPO) ahead of its listing on the ASX.

The company, which has a 70% interest in the Bengwenyama PGMs project on the eastern limb of the Bushveld Complex in South Africa, has also applied for a secondary listing on the JSE.

As part of the IPO, it will issue 38-million shares priced at $0.50 a share to raise the $19-million. The amount represents a market capitalisation at the IPO price of $45-million, with an enterprise value of $26-million.

The funds raised will be used to support the start of resource-definition drill programmes, a prefeasibility study and the lodgement of a mining right application for the Bengwemyama project, which has a high palladium/rhodium content.

“Along with its proximity to the world’s largest PGM mineral systems, the contiguous and near-surface Bengwenyama project has the potential for future mine and processing development with favourable economics.

“Globally, the PGM sector will continue to play a central role in supplying the green metals used to substantially reduce harmful emissions from internal combustion engines.

“I look forward to working with the Southern Palladium executive team to advance the exploration phase and studies over the next 12 to 24 months,” Goodlace comments.

The company notes that the project is one of the last undeveloped outcropping or subcropping extensions in the Eastern Limb of the Bushveld Complex.

It has a Joint Ore Reserve Committee-compliant inferred resource of 18.8-million ounces across the upper group two (UG2) and Merensky reefs.

“The characteristics of both UG2 and Merensky reefs are likely to be typical of other Tier 1 PGM orebodies in the area.

“In addition, we are excited by the fact that both reefs are near-surface, which provides us with a distinct operational advantage compared to regional peers,” says Odendaal.

Southern Palladium highlights that independent consulting group CSA Global has estimated the total resource potential of the project at between 33.9-million and 52.4-million ounces.

Should forthcoming exploration identify the project as an economic proposition, the company expects future capital and operating costs to be relatively low compared with other deeper underground mines within the Bushveld Complex.

Southern Palladium aims to declare a maiden ore reserve of two-million ounces at the project and to lodge a mining right application within two years of the IPO.

The project also has the support of the local Bengwenyama-ya-Maswazi community, which holds a 30% direct interest in the project and a further indirect interest through its 12.3% stake in Southern Palladium.