An overnight surge in Southern Palladium’s share price sparked scrutiny from Australian regulators, fuelling speculation of irregular trading activity.
In an announcement on the JSE on Monday, Southern Palladium said it had received a letter from ASX regulators asking the company to either explain its abrupt share price gains or request an immediate halt to trading in its shares.
The letter followed a particularly strong trading session on the Australian Securities Exchange (ASX), where the company’s share price shot up from $0.95 to a high of $1.19 per share on Monday.
As a result, shares in the company opened 80% higher at R13.50 on the JSE, before easing slightly to R12.25 later in the morning.
The dual-listed miner, run by mining mogul Roger Baxter and valued at R1.44bn on the JSE, is no stranger to share price volatility, having posted an intraday gain of as much as 90% in early February.
Volatility raises investor concerns
However, the threat of a trading halt or even suspension from the ASX may raise doubts about the company’s standing with investors. The potential for reputational damage is particularly concerning given that the group relies partly on capital raising to bring its development projects online.
- Shares surged overnight, prompting an ASX inquiry.
- JSE price jumped 80%, reflecting the company’s volatile trading history.
- Surge linked to Bengwenyama PGM project and rising platinum/palladium prices.
- Trading halts could affect investor confidence and capital raising.
Southern Palladium responded by defending the meteoric Monday jump as a reflection of its new and improved investment case, with the group having published annual results on Friday.
The junior miner’s latest financial statements showed it narrowing its operating and headline losses by about 30% each.
Bengwenyama mine drives interest
Investor interest in the company has also been steadily building in recent months as it entered the final stages of commissioning its flagship Bengwenyama mine.
The platinum group metal (PGM) operation, located on the Eastern Limb of the Bushveld Complex, recently progressed into the definitive feasibility study phase after completing a pre-feasibility study and obtaining environmental authorisation earlier in the year.
Soaring PGM prices have also added to the firm’s appeal, with the price of platinum up more than 80% this year on suppressed supply, safe-haven demand and rising hybrid electric vehicle (EV) sales. Palladium prices have trailed close behind, chalking up nearly 45% in year-to-date gains.
Southern Palladium told regulators it was “not aware of any information concerning it that would, if known by some in the market, explain the recent trading in its securities”.
“The company considers that there has been an increased awareness of the Bengwenyama PGM project, while the increase in PGM commodity prices may also have had a positive impact on investor sentiment towards the PGM sector,” it said.
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