Southern Palladium Limited announced that Scoping Study completed for the 70% owned Bengwenyama project shows very attractive economics, with results justifying the prefeasibility study (PFS) which has already commenced. These include assumptions about the availability of funding. This Scoping Study inputs and assumptions have been assessed to have a level of accuracy of +/- 30%.

While each of the modifying factors contained in the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves ("JORC Code (2012) were considered and applied, there is no certainty of eventual conversion to Ore Reserves or that the production target itself will be realised. Key Project Results. Key Results, Units, Bengwenyama, Capital Costs, Initial Capital, USDm, 408, Sustaining and Ongoing Capital, USDm, 510, Operating Costs (100% payable basis), Cash Costs, USD/6E oz, 717, Royalties, USD/6E oz, 68, Total Operating Costs, USD/6Eoz, 785, Sustaining Capital, USD/6E oz.

46, Reclamation & Off-Mine Overheads, USD/6E oz., 6, All-in Sustaining Costs (AISC), USD/6E oz, 836, Initial & Ongoing Direct Capital, USD/6Eoz. 58, All-in Costs, USD/6E ounces, 894, Financial Metrics, Total Net Revenue, USDm, 12,241, EBITDA, 5,213, Project Cashflow - Pre-Tax, USDm, 1,043, IRR - Pre-Tax, %, 24%, Tax Paid, USDm, 1,163, Project Cashflow - Post Tax, 3,132, NPV - Post Tax (8% discount rate), USDm, 698, IRR - Post Tax, %, 21%, Peak Funding Requirement, USDm, 403, Payback period (Start of Construction) - Post Tax, Years, 7.5, Payback Period (Start of Mining) - Post Tax, years, 6.5, Payback period (Start of Plant Production) - Post Tax, Years), Post Tax, Years, 4.5. Note: Initial capital is defined as all direct project capital for first four years up to and including the first metal is produced. The information in this report that relates to Exploration Targets, Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Mr. Uwe Engelmann (BSc (Zoo.

& Bot.), BSc Hons (Geol.), Pr.Sci.Nat. No. 400058/08, FGSSA).

A project stratigraphy has been developed for the Bengwenyama Project based on the completed drillholes to date. Access location trade-off was investigated with this scoping study update to determine optimal position for early production. Additional access was also investigated to increase early ramp-up production.

A mining method trade-off was completed to determine the optimal mining method for extracting ore from the UG2 reef. At this early stage the most promising location has been selected for a conceptual design that has been completed for the project. The site showed positive results due to the fact that it can cater for storage of tailings for the life of mine, as well as being a lower risk option in terms of structural integrity and long term closure considerations.

The design has been completed in accordance with GISTM requirements. Further development of the project includes the completion of the PFS work (In Including resource drilling and resource update), FS study work (In Including drilling - resource infill, geotechnical, metallurgical test work and hydrogeological) as well as FEED designs. Validation routine involved checking spatial location of drillholes collars and intersections, validity of stratigraphic logging, checking for repetition of logged intersections, reasons for the absence of analytical data, negative thicknesses and an assessment of analytical data, negative thicknessed and an assessment of the correlation of all aspects of all aspects of the correlation of the correlation of the new drilling data from the historic drilling data from the Nkwe drillhole database.

The Nkwe drillhole database was inspected for erroneous /non representative datapoints and removed based on the Nkwe database was inspected for erroneous /non representative datapoints and remove based on the Nkwe drillhole data from the Nkwe database.