Work on the southern decline at the Bengwenyama project is being accelerated by platinum group metals (PGM) miner Southern Palladium to reach the shallow Upper Group 2 (UG2) reef. This move aims to derisk development, support financing and advance the final investment decision, says MD Johan Odendaal, as work advances on the delivery of a definitive feasibility study (DFS) in 2026.

The DFS works programme follows the completion of an optimised prefeasibility study (OPFS) at Bengwenyama in July 2025 – a defining development that, he says, confirms both the technical and economic strength of the project.

The OPFS lays out a two-stage development plan to lower upfront capital requirements and improve project fundability.

Stage 1 targets a high-grade UG2 section that can be accessed from a vertical depth of less than 100 m. This location allows for the faster accessing of ore, quicker development and an earlier production start.

Stage 1 delivery remains on schedule, supported by optimised decline designs, belt-way integration work and progress across operational-readiness streams. Additional drilling is under way at the tailings storage facility footprint and the southern decline, with the full programme scheduled for completion in December 2025.

“Key technical workstreams also advanced this quarter to keep Stage 1 development on track, including preparation of the south site, south box-cut and the south decline down to the first UG2 intersection,” adds Odendaal.

He believes that the two-stage approach reduces project risk because future expansion can be funded in-house through early cash flows.

The prefeasibility study, completed in October 2024, followed a two-year drilling programme involving 30 000 m of exploration work, which Odendaal notes was completed on schedule and on budget.

The drilling results enabled the company to declare a probable reserve of 6.29-million ounces at a grade of 6.17 g/t for the six-element (6E) basket of platinum, palladium, rhodium, ruthenium, iridium and gold mineralisation in the deposit.

This, he says, is supported by a mineral resource of more than 40-million ounces, the geological confidence of which provides a strong base for the staged mine plan.

According to the OPFS, Bengwenyama has a net present value (NPV) of $857-million, and this valuation is directly leveraged toward stronger PGM prices, which Odendaal notes have improved in 2025, owing to market expectations of structural supply shortages.

“Platinum has drawn particular attention, with market consensus shifting towards a sustained period of tight supply. The PFS used conservative price assumptions of $1 557/6E oz. The current UG2 basket price of $2 047/oz is 31% higher.”

Because of this difference, the project model shows that every 15% uplift in the basket price adds about $ 200-million to the post-tax NPV, he adds. Recent strength in the rand, however, slightly counteracts the full impact of the higher US-dollar basket price.

Definitive Feasibility Study Progress

DFS work is also progressing well, with the mine’s development team having already started a detailed metallurgical and geotechnical drilling programme.

“We’ve planned 62 drillholes and 57 deflections, totalling more than 10 000 m,” Odendaal notes, adding that seven drill rigs are on site to collect a 140 kg UG2 bulk sample for DFS testwork.

This metallurgical sample drilling has started in the South and North blocks, with deeper UG2 intersections above 80 m “aligning with expectations”.

Further drilling in early 2026 will target shallower zones to confirm geological structure and rock competency.

The DFS is being supported by a range of technical service providers across the mining, geotechnical, metallurgy, electrical, water, environmental and infrastructure disciplines.

Odendaal adds that Bengwenyama’s operational readiness is also progressing, with work under way on explosives’ licensing, supply chain compliance, operating procedures, codes of practice, and security and medical-screening planning.

The company is assessing a hybrid engineering, procurement and construction management delivery model, and continues to evaluate processing options for early production, including toll treatment through a third party or the construction of its own plant.

“Processing scenarios are being refined into two pathways: early toll treatment or a Southern Palladium-owned plant from the start,” he explains.

In parallel, organisational planning is advancing, with Odendaal confirming that senior operational positions, including a project manager, will be filled as part of a structured handover from the project team to the future mine operations team.