By: OrePulse

Southern Palladium has more than doubled the estimated value of its Bengwenyama platinum group metals project in South Africa, after an updated prefeasibility study pointed to sharply higher chrome recoveries and stronger forecast prices for the metals it plans to mine. The prefeasibility-level study is a pre-construction economic assessment, rather than a final investment decision.

The company said the updated study lifted Bengwenyama's post-tax net present value to $1.96 billion, up from $857 million in the previous study, using an 8 percent discount rate. Shares in Southern Palladium, which is listed on the Johannesburg Stock Exchange and in Australia, rose more than 10 percent in early trading on the news and are up 73 percent since the start of the year.

Bengwenyama sits on the Eastern Limb of the Bushveld Igneous Complex in South Africa, the geological formation that holds the bulk of the world's platinum group metal resources. The project has an expected mine life of 33 years.

The biggest driver of the revised valuation was an increase in projected chrome recoveries to 85.6 percent from 30 percent in the earlier study. The company attributed the improvement to a coarser grind in the processing circuit, which lifts chrome recovery while leaving platinum group metal recoveries unchanged, since the chrome and PGM streams are processed through separate circuits. Southern Palladium had first flagged the prospect of higher chrome output in April 2026, and the updated study has now put firm numbers behind that outlook.

The higher recoveries translate into significantly more chrome concentrate. Southern Palladium now expects steady-state output of about one million tons of chrome concentrate a year, up from a previous estimate of 350,000 tons a year, with first-stage production of 450,000 tons a year. Over the life of the mine, projected chrome output rises to 17.2 million tons, up from six million tons in the earlier study. The company said chrome credits reduce the project's all-in sustaining costs, adding to the economics alongside the higher recoveries and metal price assumptions.

Bengwenyama will be developed in two phases. Platinum group metal production is set to start at 200,000 ounces a year before rising to 420,000 ounces a year once the second phase is complete.

The updated study also assumes higher metal prices across the board. Southern Palladium's long-term platinum price forecast rose 45 percent to $1,738 an ounce. Its realized basket price for PGMs over the life of the mine is now put at $2,210 an ounce, an increase of 57 percent. The company's gold price assumption climbed 79 percent to about $3,500 an ounce.

A stronger rand forecast added to the project's capital needs, lifting peak funding requirements by $50 million to $329 million. The higher funding requirement reflects currency assumptions rather than a change in the physical scope of the planned mine and processing plant.

Executive chairman Roger Baxter said the increased chrome output changes how the company views the project. Bengwenyama is "no longer simply a PGM project with chrome credits, but a PGM-chrome co-product operation," he said.

Southern Palladium said the higher-grade chrome concentrate strengthens its position in talks with a smelting and refining partner over an offtake agreement for the material. The company is competing for offtake deals with the Waterberg Joint Venture, a rival Bushveld PGM project controlled by Toronto-listed Platinum Group Metals and backed by Northam Platinum and Impala Platinum.

Southern Palladium said the revised study reflects both the metallurgical change and the updated price assumptions. With chrome now contributing a larger share of projected revenue, the company said Bengwenyama's economics have shifted from a PGM project with a secondary chrome credit toward one in which chrome and platinum group metals function as co-products of comparable importance to the overall investment case.