Southern Palladium Limited Inc. announced that an interim UG2 Mineral Resource update at the Bengwenyama Platinum Group Metals (PGM) Project has resulted in a 39% increase in the total UG2 Mineral Resource on a 3PGE+Au (4E) basis, increasing from 8.38Moz to 11.65 Moz. A maiden Resource of 14.13Moz expressed on a 6PGE+Au (7E) basis has been established. 2.56Moz of the UG2 Reef has now been converted to an Indicated Mineral Resource at a 3PGE+ Au (4E) grade of 7.65 g/t, in line with previous grade expectations, and a 6PGE+AU (7E) grade of 9.24 g/t. UG2 3D geological model has been updated which suggests that the eastern area of the Project is less structurally complex than originally thought. Drilling is continuing with a sixth drill rig likely on site in July to increase the monthly drill meters. The sixth drill rig will be employed to investigate a second entry point for a faster production ramp up which is expected to be incorporated in an Updated Scoping Study. Submission of a Mining Right Application is on track for Third Quarter CY2023, five months ahead of the original schedule. The Phase 1 drilling programme, based on a 350m drilling grid, was approached in two stages - Phase 1a and Phase 1b. Phase 1a was designed with wider drill spacing that covered a larger area, to obtain a better understanding of the structures and grade distribution in the shallow eastern portion of Eerstegeluk. This has now been completed. Within the Phase 1a drilling grid there are areas of closer spaced drilling where assay results have confirmed the maiden Indicated Mineral Resource upgrade. Phase 1b, comprising the
remainder of the 63 planned drillholes, has commenced and will focus on closer spaced infill drilling of phase 1a, to convert additional Inferred Mineral Resource to Indicated Mineral Resource. The recent drilling programme has allowed for the validation of the historical drill hole database. A statistical analysis has been completed on the historical and new databases and has established a 96.4% correlation between the two datasets. The datasets were combined for the Mineral Resource Estimate (MRE) which used Ordinary Kriging in the estimation process. The consolidated UG2 Mineral Resource as at 30 May 2023. Geological losses have been applied and the resource is declared at a pay limit of 1.9 g/t using a 4E basket price of USD 2,654/oz. Importantly, no Mineral Resource falls below the pay limit. No mining cut has been applied at this stage as the geotechnical work still needs to be completed. However, it is envisaged that the resource mining cut will be around 1 metre based on the observation that chromitite stringers are commonly absent in the drilled area and by comparison with other mines in the area. The hanging wall contact is distinct. The LPP or the Leuconorite parting plane forms a sharp hanging wall contact with no chromitite stringers in the hanging wall. The full mining width will be determined as part of future mining studies and will incorporate dilution by low or nil grade hanging wall and footwall dilution, as is seen in most operations in the Bushveld Complex. The Bengwenyama structural model has been updated with the combined historical drillhole data and the new SPD drillhole data. The biggest change in the geological model is that the average dip of the UG2 Reef was revised down to approximately 6 degrees, from the previous measure of 12 degrees. The recent drilling has also shown that the throws on the major north/south faults and dykes in the north- eastern portion of Eerstegeluk are not as large as initially modelled. There has been a large gain in UG2 Reef towards the eastern boundary of Eerstegeluk which, in previous press releases, has been termed the Far East Block (FEB). In the previous structural model, it was assumed that the UG2 was not present in the FEB. This area has been a significant contributor (approximately 1.3Moz) to the current resource upgrade. There has also been a reduction in the Exploration Target in the "Dome" area. Recent drilling around the Dome has indicated that this is an uplifted area where the UG2 Reef is unlikely to be present. The gap in the dome area shows the area of the UG2 that has been excluded from the Exploration Target. It had not been a part of the earlier Inferred Resource. The UG2 geological and estimation models have been updated to include drilling and assaying data as at end of March 2023. The estimation model utilised 10 historical Nkwe drillholes and 24 SPD drillholes. Previously the Mineral Resource was based on an Inverse Distance estimation but with the increase in the number of drillhole data points an Ordinary Kriged estimate was now possible. The 3PGE+Au g/t resultant model with the drillhole positions used in the estimation. The statistical analysis showed that no capping was required for the estimation. The kriging neighbourhood analysis (KNA) recommended a block size of 350m with a minimum and maximum number of samples of 5 and 15 respectively for the first search volume. Three search volumes with decreasing samples were used for the estimation. All elements (Pt, Pd, Rh, Au, Ir, Os, Ru, Cu, Ni, Cr and Fe) were estimated individually as well as a combined 4E (Pt, Pd, Rh & Au) and 7E (Pt, Pd, Rh, Ir, Os, Ru & Au). The average 4E prill splits for Pt:Pd:Rh:Au of 46.2%: 42.6%: 9.9%: 1.4% were determined using these estimates. The Cr:Fe ratio of the UG2 chromitite horizon, from modelled Cr and Fe analysis, is 1.19. A density of 3.93 t/m3 was used in the tonnage estimate which was determined from the reef intersections using the Archimedes methodology.