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Southern Palladium has launched an initial public offer in the hope to raise as much as A$19 million (~R215 million) as it moves to begin trading on the JSE next month.
The company, which is domiciled in Australia, said on Friday in an abridged prospectus and pre-listing statement that it is in the process of acquiring a 70% interest in the Bengwenyama Platinum Group Metals (PGM) project located on the Eastern limb of the Bushveld Complex in Limpopo.
Southern Pallaidum intends for the JSE to be a secondary listing while it will apply for a primary listing on the Australian Securities Exchange.
The company intends to partake in advanced stage platinum group minerals exploration and development through its proposed acquisition of a 70% interest in Miracle Upon Miracle Investments Proprietary Limited (MUM), a private South African company which holds prospecting right over the relevant properties located south of Anglo American Platinum Modikwa mine. The remaining 30% of MUM is held by an investment company owned by the Bengwenyama-ya-Maswazi community.
Southern Palladium's acquisition in MUM will be complete before listing on the JSE, the company said.
The board and management have a proven track record in the minerals industry and in PGMs. Chair of the Southern Palladium board is veteran mining executive Terence Goodlace, a former chief operating officer at Gold Fields and CEO of Impala Platinum. He has also served on the boards of several major mining companies.
The news comes as the JSE has seen an exodus of listings - 25 companies delisted in 2021 alone. It also comes as investment exploration in South Africa has severely declined in the face of red tape and policy uncertainty.
In the pre-listing statement, Southern Palladium said the formation of the company, and its listing, provides a suitable platform both to raise the necessary financial resources and to find the necessary technical resources required to advance the project. The company does not intend to hold any other interests in any other projects and has no operations in Australia or elsewhere.
The initial public offer of between 34 million and 38 million new shares at an issue price of A$0.50 (about R5.67) per share, is expected to raise between A$17 million and A$19 million.
The prospecting right for the project is valid until February 2024 and permits exploration for platinum, palladium, rhodium, ruthenium, osmium, iridium, gold, copper, nickel, chrome, cobalt and silver. The project is at an advanced stage of exploration, Southern Palladium said. "Two economic reefs – the Merensky and UG2 reefs – occur on the properties, which extend from surface to a depth of 1 100m over a distance of 10km. Both these reefs are primary economic deposits exploited by other platinum mining companies for PGMs and base metals."
Southern Palladium's initial public offer closes on 6 May with new shares to be allotted on 23 May ahead of trading on 25 May.
