Southern Palladium Limited provided investors with an update on the findings of the geotechnical study conducted on the UG2 reef at the Bengwenyama Platinum Group Metal (PGM) project. This project is situated on the Eastern Limb of the world-class Bushveld Complex in South Africa. An independent geotechnical consulting group, Open House Management Solutions (OHMS), was engaged to conduct a geotechnical study for the Bengwenyama PGM project. The primary purpose of the study was to confirm the minimum allowable depth for commencing mining activities and to determine the optimal pillar layout for various mining methods. The Bengwenyama project is designed as an underground mine with an initial focus on the UG2 Reef. The geotechnical study has established that there are two viable mining options: one involving conventional mining with a 1-metre mining width and the other employing a mechanized mining approach with a mining width of up to 2.0 metres. The choice between these methods will be influenced by factors such as financial feasibility and practicality. The representative UG2 drill hole intersection widths to date range from about 43cm to 136cm with an average width of 69 cm. At this stage, indications are that there are limited areas that have chromite stringers in the hanging wall of the UG2, which so far are located in a small, localised area in the northeastern part of Eerstegeluk. The majority of the UG2 intersections have a leuconorite parting plain (LPP) as the hanging wall contact between the hanging wall pyroxenite and the UG2 reef. The footwall contact of the UG2 is either a sharp or gradational contact between the UG2 reef and the pegmatoidal or poikilitic pyroxenite. In the case of the gradational contact there is disseminated chromite within the pyroxenite resulting in the immediate footwall being mineralised and carrying low PGM grades. It is estimated that the footwall dilution will carry a grade of between 0.3 g/t and 0.5 g/t. Since the project area has the LPP as the hanging
wall contact the hanging wall dilution should be minimal and the minimum stoping width dilution will come from the low-grade footwall pyroxenite. Indications are that the minimum stope width could be around 1m based on the average UG2 Reef width of approximately 70 cm and the absence of the chromite stringers. Geotechnical test work results Core analysis indicates that there are no reef parallel structures present within 6m of the top of reef contact, leading to the conclusion that the UG2 should have a strong hang wall. The results of the test work and the core logging were used to produce rock mass classifications for the various lithologies. The classification yielded similar results for the UG2, footwall and hanging wall. The Rock Mass Rating values ranged between 82 and 84 and is considered a good rating. A beam thickness of 6m can be considered above the stoped-out areas. The analysis indicates that the originally planned 20m wide conventional stopes are expected to be stable, given the newly available rock mass characteristics. Moreover, the results indicates that, even with conservative input parameters, it is anticipated that a stope with a 25m span on dip and with a stope length of 100 m on strike, should be stable. The mining extraction rate for conventional mining will range from 91% down to 180m deep and reduces gradually to 78% at a depth of 540m. The mining extraction rate for mechanised bord and pillar mining will range from 82% down to 240m deep that reduces gradually to 67% at a depth of 540m with pillar dimensions changing to 8x10m. The recommended lay-out for conventional stoping includes gully pillars of 6m x 4m with 5m holings and the panel face length of 20m. In-stope roof-bolting is recommended with a spacing at a 1.5 m x 1.5 m elongate pattern Hydra-bolts of 1.2m length is recommended for the gullies and raises, spaced 1.0 m apart to a 2-1-2 pattern. The recommended conventional development support pattern is 1.2m long, 26mm diameter hydra-bolts, tensioned and spaced 1.0 m apart to 2-1-2 pattern. The recommended bord and pillar mechanised layout of 8m bords and 6m pillars and 1.5 m full column grouted resin bolts spaced 1.5m on average for bords and for primary development ends. Long high-capacity support such as 4.5 m long cable anchors is recommended at large excavation intersections, and in areas where these low-angled structures are intersected. It is recommended that it should be planned that at least 10% of the workings will require additional long anchor support. For the assumed charge, the empirical analysis indicates that mining should not be conducted closer than 50 linear metres below surface structures.