Southern Palladium Limited released the initial Merensky reef (MR) grades on the Bengwenyama Platinum Group Metal (PGM) project located on the Eastern Limb of the world class Bushveld Complex, South Africa. In total, 21 drillholes have now been completed to date. Of these, the UG2 Reef has been encountered in 18 holes.

Two appear to have been faulted out at the expected depth, and in one case the reef was not developed. Of the 21 drillholes, eight were expected to intersect the MR as they were drilled east of the subcrop. Of these, six intersected the MR and two were faulted.

Initial Merensky Reef Results: The first Merensky reef assay results for drillholes E004, E028, E030 and E031 have been received from the accredited ALS laboratory in Johannesburg. The average sampled width for the four drillholes is 197 cm with a 3PGE+Au grade of 2.30 g/t and 6PGE+Au grade of 2.56 g/t. This is in line with the reef widths of the compliant inferred Mineral Resource Estimate (MRE) which has an average reef width of 191 cm. The grade, which has sampled only a small percentage of the lease area, is slightly lower than the inferred MRE of 2.96 g/t. Drillhole E019A intersected what is believed to be the highly weathered and friable MR, in the shallow oxidised zone, with a 3PGE + Au grade of 0.88 g/t over a sample width of 284 cm and was deemed as non- representative.

Merensky Reef: The Merensky pyroxenite, containing potentially exploitable platinum group elements, is overlain by spotted anorthosite and underlain by leucocratic norite. Mineralisation in the Merensky Reef zone includes patchy pyrrhotite and fine pyrite in the areas immediately adjacent to the top reef contact ("TRC"). In most drillholes, sampling of the Merensky Reef is guided by the presence of two chromitite stringers namely top and a bottom chromitite stringer marker.

These chromitite stringers are approximately 5 mm wide. The bulk of pyroxenite between these markers is usually low grade or totally barren. In drillhole E031 only the top chromitite stringer was developed.

Although some disseminated chromitite mineralisation was observed on the drill core, the bottom stringer marker is either poorly developed and not easily discernible or non-existent. The Merensky Reef assay results indicate that the PGE mineralisation is top and bottom loaded. 2023 Drilling Activities: A total of 43 Merensky reef samples and 98 UG2 samples (including quality control and footwall samples) were collected before the December break.

These have been dispatched to ALS Chemex South Africa (Pty) Ltd. ("ALS") and assay results are expected shortly. The drill contractors and geological staff are back on the project and drilling activities with the five drill rigs are progressing well. Productivity has improved following the implementation of action plans initiated towards the end of 2022, and the last three weeks of production have exceeded the planned meters.

UG2 and Merensky Reef Intercepts: In total, 21 drillholes have now been completed to date. Of these, the UG2 Reef has been encountered in 18 holes, 2 appear to have been faulted out at the expected depth and; in one case the reef was not developed. Of the 21 drillholes, eight were expected to intersect the MR as they were drilled east of the subcrop.

Of these, six intersected the MR and two were faulted. The 21 drillholes are spread over the entire resource and target area and have confirmed that the UG2 reef at Bengwenyama is continuous ­ a key objective of the Phase 1 drill programme. Drilling is now well underway, and the new boreholes have assisted in getting a better understanding of the orebody.

A decision was made to drill in the far east corner (Eastern Resource Block) of the orebody which was previously excluded from the planned Phase 1 drilling programme and resource estimation. Drillholes E064, E065 and E071 have all intersected the UG2 reef and confirms the UG2 reef does continue into the Eastern Resource Block.