Shares in junior Australian miner Southern Palladium soared 33% on Thursday after the group raised about R100m to accelerate the development of its Bengwenyama platinum group metals (PGM) project in SA.
The group on Thursday said it had received commitments for a placement of 16-million new fully paid ordinary shares at A$0.50 per share to raise A$8m before costs.
The proceeds will go towards advancing the next phase of definitive feasibility study work and staged mine development at Bengwenyama, with minimal dilution and changes to the group’s capital structure.
The group’s executive chair, Roger Baxter, said the placement was initiated and cornerstoned by one of the company’s largest shareholders, who will invest a further A$4.6m in the group.
“This strategic placement provides the group with targeted funding support at an important juncture as we execute on the transition of Bengwenyama, a tier-one PGM project globally, towards staged mine development,” Baxter said.
“We are pleased to have attracted such strong support from our existing institutional investors, led by a cornerstone investment from one of our largest shareholders, while also attracting new institutional investment — marking a vote of confidence for both the quality of the resource and our stated development strategy for the Bengwenyama PGM project.”
The miner is still conducting pre-feasibility studies on the Bengwenyama project, which has the potential to produce commodities such as palladium, rhodium, platinum and iridium. The project is on the eastern limb of the Bushveld Complex, which contains more than 70% of the world’s known PGM resources.
The company on Tuesday asked the Australian Stock Exchange to halt the trade of its shares pending an announcement regarding a capital raising, to be undertaken by way of a share placement. The trading halt was required to enable the placement to be undertaken in an orderly manner.
Baxter was appointed to the role in the latter part of 2023, bringing to the table years of mining experience. He left the Minerals Council at the end of June 2023 after 30 years with the Minerals Council, formerly the Chamber of Mines, with the past nine years as CEO.
Baxter said the placement gives the group room to speed up its PGM project.
“The targeted raise provides the company with a strong cash runway to implement our near-term project objectives, including accelerating the definitive feasibility study for a two-stage development pathway with lower upfront costs,” he said.
“In addition, the structure of the raise and the at-market pricing reflects the commitment of the company and our shareholders to support project development through disciplined capital management.”
The placement also came just a month after the mineral resources & energy department issued the group environmental authorisation — a major milestone leading to the award of the project’s mining right.
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