Alongside production of platinum group metals (PGMs) – specifically platinum, palladium and rhodium – South Africa-focused PGMs developer Southern Palladium plans to improve its recovery of chrome from its Bengwenyama underground PGM project, said Southern Palladium nonexecutive director and mining consultancy Minxcon mining engineering director Daan van Heerden.

The currently-under-development Bengwenyama PGM project, located on the eastern limb of South Africa’s Bushveld Complex and neighbouring Modikwa platinum mine, hosts both the Upper Group 2 and Merensky reefs.

Bengwenyama contains a Joint Ore Reserves Committee-compliant resource base of more than 40-million ounces including platinum, palladium, rhodium and gold – four elements (4E).

Southern Palladium aims to break first ground in the establishment of the first decline shaft of the mine in June, subject to the granting of a mining right to proceed with the establishment of the mine.

During an investor visit to the Bengwenyama site in Limpopo last month, Van Heerden explained that current chrome prices are at “very attractive levels”, and as chrome forms part of Bengwenyama’s resource, it serves as an attractive opportunity.

“We are busy with metallurgical test work to optimise the processing circuit. Chrome recovery is one of the areas where we aim to improve, which should add significantly to the bottom line [of the business],” he said.

Bengwenyama’s prefeasibility study (PFS) indicated an in-situ chrome grade of about 29%, with a mass yield of about 13%, which Van Heerden noted was typical for chrome operations in the vicinity of the project.

“The plan is to grind coarser and to extract the chrome earlier in the process. We do not yet have final figures, but we are targeting a substantial increase in chrome yield,” he said.

Within Bengwenyama’s revenue basket, 26% of total revenue will flow from platinum, 24% from palladium, 28% from rhodium and 12% from chromite, with the remainder comprising a mix of other resources.

The project’s estimated 4E all-inclusive sustaining cost is $1 145/oz (six element [6E] – $996/oz) of platinum, palladium, rhodium and gold against a conservative prefeasibility study 4E basket price of $1 377/oz (6E $1 557/oz).

Van Heerden explained that Stage 1 of the project is limited to the mine’s South decline and modular processing plant of 100 000 t/m.

The early development project portion, entailing a boxcut and decline to reef, of Stage 1 of the project is fully funded. Stage 2 of the project consists of the North decline and processing plant upgrade to 200 000 t/m.

Southern Palladium intends to fund Stage 2 development with revenue produced as a result of Stage 1 earnings, said Southern Palladium MD Johan Odendaal.

Shareholding, Project Progress
Southern Palladium holds a 70% interest in the Bengwenyama PGM project through its subsidiary Miracle Upon Miracle Investments, with the remaining 30% owned by the local Bengwenyama-ya-Maswazi community. The community holds a further 6% direct interest in Southern Palladium, added Van Heerden.

He said this partnership with the local community was structured as a “genuine joint venture” rather than a conventional black economic empowerment arrangement.

“It has been many years since a major new platinum project has been developed in South Africa. Bengwenyama is therefore an important positive development for the country’s mining sector,” he added.

During the February site visit attended by Mining Weekly, Southern Palladium updated investors on project progress, highlighting that the company is on schedule with its development timeline while it awaits a mining right.

Any delays in obtaining this right from the Department of Mineral and Petroleum Resources could affect subsequent project milestones, investors were warned.

“If the right is delayed, the final mine plan could also be delayed. We hope to receive it soon, but at this stage it is not holding up our work,” said Van Heerden.

As part of its progress into developing Bengwenyama, Southern Palladium is currently progressing a definitive feasibility study (DFS) for the project, which is expected to be completed in the third quarter of this year and includes detailed tailings dam design, plant design and mine design optimisation.

Aligned with this, the company is conducting drilling programmes required for the feasibility study, although exploration drilling outside the mining-right area cannot proceed until the mining right is issued.

Southern Palladium plans to employ a hybrid mining approach, combining mechanised development with conventional stoping.