quarterly report for the period

1
3rd Floor, 18 Richardson Street, West Perth PO Box 1083, West Perth
Western Australia 6005 Western Australia 6872
Telephone: (08) 9324 1491 Email: [email protected]
Facsimile: (08) 9226 4259 Website: www.platinumaus.com
Our ref: ASX0666JDL:30.5:JD
28 July 2006
QUARTERLY REPORT FOR THE PERIOD
ENDED 30 JUNE 2006
HIGHLIGHTS
Smokey Hills PGM Project Resource Reaches 1 Million Ozs
Platinum Australia Limited (ASX: PLA) (AIM: PLAA) announces that following the completion of a
review of the resource estimate for the Bankable Feasibility Study (“BFS”), the Measured and Indicated
Mineral Resource, the estimate for the Smokey Hills Platinum Group Metals (“PGM”) Project has increased
to 5.5 million tonnes at a grade of 5.6 g/t 4E PGM containing 1 million oz 4E PGM.
Positive Preliminary Results from the Smokey Hills PGM Project
PLA announces the preliminary results from the BFS, which confirm that the Smokey Hills Platinum PGM
Project would be extremely robust and would generate returns in excess of 60% on the Base Case
assumptions and in excess of 300% using current metal prices and exchange rate.
Share Placement
In May PLA finalised a Share Placement of 22.2 million new fully paid shares at an issue price of 95 cents
per share to raise A$21 million. The Placement was primarily with institutional investors in Australia and
the United Kingdom.
OPERATIONS
PLA operations were focused on the Smokey Hills PGM Project and the Kalahari Platinum Project in South
Africa. In Australia Sally Malay Mining (“SMY”) continued to work on updating the previous BFS on the
Panton PGM Project as part of PLA’s joint venture with SMY.
Smokey Hills Platinum Project
The Smokey Hills PGM Project is located on the eastern limb of the Bushveld Complex in the Limpopo
Province of South Africa, 300 kilometres north east of Johannesburg. The Project is adjacent to and up dip
from the existing Modikwa Platinum Mine owned by African Rainbow Minerals and Anglo Platinum.
The focus for PLA during the last quarter to 30 June 2006 has been finalising the BFS on the Project. As
part of this work a final review of the resource was completed during the quarter which led to an increase in
the Measured and Indicated Resource to 1 million oz 4E PGM as detailed in table 1 below.
PLATINUM AUSTRALIA LIMITED
ACN 093 417 942
2
Table 1 Smokey Hills PGM Project UG2 Reef#1 Mineral Resource#2
Tonnes#3 4E PGM 6E PGM Pt Pd Rh Au Ru Ir
Mt g/t g/t g/t g/t g/t g/t g/t g/t
Measured 3.6 5.59 6.60 2.47 2.54 0.51 0.08 0.80 0.21
Indicated 1.9 5.57 6.59 2.49 2.49 0.50 0.08 0.80 0.21
Total 5.5 5.60 6.60 2.47 2.54 0.51 0.08 0.80 0.21
#1 The UG2 Reef, as defined for this resource estimate, comprises the UG2 Chromite Layer, a 15 cm Footwall Cut and a Hangingwall Cut to the
L2 parting.
#2 All tabulated data has been rounded to one decimal place for tonnage and two decimal places for grades.
#3 After interpreted geological losses of 21% have been removed. Geological losses include potholes, dykes, faults, rolling reefs and Iron Rich
Ultramafic Pegmatite.
The BFS is being undertaken with GRD Minproc as the Lead Engineer, Snowden Mining Consultants
responsible for the Resource Estimate and Mining Study, SRK Consulting for Tailings and Hydrogeological
studies and Africa Geo-Environmental Services for the Environmental Study. The BFS was
largely completed during the quarter and the key preliminary results from the study are as follows:-
�� The Project would deliver a return of 63% on the Base Case and 311% at Current Prices;
�� The Project would achieve an NPV10 of US$74 million on the Base Case and US$251 million at
Current Prices;
�� The Project would generate a cash flow (undiscounted) of US$133 million on the Base Case and
US$404 million at Current Prices;
�� The Initial Capital Cost estimate for the Project was US$41.5 million;
�� The Cash Operating Cost would be US$228/ozs 4E PGM produced;
�� The Project would produce an average of 96,000 ozs 4E PGM per annum over a 7 year life.
A full summary of the preliminary results are provided in Table 2 below and the underlying assumptions
relating to metal prices and exchange rate are provided in Table 3.
Table 2 Summary of Preliminary Results from Smokey Hills BFS
Base Case Current Prices
(at 10/7/2006)
Reserves 4E PGM 763,000 oz
Production 4E PGM ~96,000 oz/annum
Plant Recovery 86%
Project Life 7 years
Cash Costs 4E PGM US$228/oz US$222/oz
Basket Price 4E PGM US$628/oz US$1,118/oz
Capital Cost
Initial US$ $41.5 Million $40.9 Million
Deferred US$ $12.5 Million $12.3 Million
NPV
10% US$ $74 Million $251 Million
15% US$ $56 Million $203 Million
IRR 63% 311%
Cashflow US$ $133 Million $404 Million
Payback months 22 months 6 months
3
Table 3 Metal Price and Exchange Rate Assumptions
Rand/US Dollar Exchange Rate and Metal Prices
Base Case
Current at
10/7/2006
Exchange Rate ZAR/US$ 7.0 7.19
Metal Prices US$ ZAR US$ ZAR
Platinum per oz 900 6,300 1,235 8,880
Palladium per oz 300 2,100 325 2,337
Rhodium per oz 1,000 7,000 4,550 32,715
Gold per oz 450 3,150 626 4,501
Nickel per tonne 10,000 70,000 25,950 186,581
4E Basket Price per oz 632 4,421 1,113 8,004
The final results from the BFS will be available in the near future but are not expected to differ significantly
from the preliminary figures.
Kalahari Platinum Project
The Kalplats Project is located 330 km west of Johannesburg and has an established (Indicated and Inferred)
resource of 3.4 million ounces 3E PGM, including a high grade resource of 1.4 million ounces 3E PGM at a
grade of 3.6 g/t 3E PGM. PLA believes that there is significant potential to increase the size of the resource
as all deposits appear to be open at depth and along strike and PLA have identified numerous targets from
geochemical survey work and a high resolution aeromagnetic survey completed by PLA in early 2005.
PLA are awaiting the issue of a “New Order” Prospecting Right covering the project to allow a planned Pre
Feasibility Study (“PFS”) drilling program of approximately 15,000 metres to commence.
During the period PLA undertook a significant program of re-logging existing core from the previous
drilling to aid in our re-interpretation of the deposit and provide additional input into the planning of the
drilling program.
Panton Platinum Palladium Project
The Panton Project is located in the Kimberley region of Western Australia, 60 km north of Halls Creek and
60 km south of the Sally Malay site. The Project has a (Measured + Indicated + Inferred) resource of 14.3
Mt at 5.2 g/t 7E PGM containing 2.4 million ounces 7E PGM, including a high grade resource of 10.1 Mt at
6.1 g/t 7E PGM containing 2 million oz 7E PGM.
Initial metallurgical test work completed by SMY has confirmed that the SMY grinding and flotation circuits
will be able to treat Panton ore in the initial stages of processing. Recovery of PGM’s will require a separate
circuit incorporating the Panton Process.
A scoping study for the treatment of the Panton ore using the SMY treatment facility incorporating the
Panton Process is currently under way. This study which includes capital and operating cost estimates
should be completed by the end of July 2006.
Further metallurgical test work is proposed which will require re-entry into the Panton exploration decline in
order to recover a 500t ore sample. The approvals process for this is well advanced and activities are
expected to commence in mid August, extending over an approximate eight week period.
Assuming a positive outcome from the scoping study and pilot plant test work, a decision will be made to
process a larger parcel of ore (+2,500t) at the SMY plant. It is expected that all of this work will be
completed by the end of this calendar year.
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CORPORATE
In May PLA completed a Share Placement of 22.2 million new fully paid shares at an issue price of 95 cents
per share to raise US$21 million. The Placement was managed by Bell Potter Securities Limited and the
shares were placed primarily with institutional investors in Australia and the United Kingdom.
The funds raised will be utilized to advance the Smokey Hills, Kalahari Platinum and Panton Projects,
together with general working capital.
Qualification Statement
We confirm that the exploration results and resources contained in this report are based on information
compiled by Tony Greenaway, Geology & Resources Manager of Platinum Australia Limited, who is a
member of The Australasian Institute of Mining and Metallurgy.
Tony Greenaway has more than five years experience which is relevant to the style of mineralisation and
type of deposit under consideration and to the activity which he is undertaking, to qualify as a competent
person as defined in the 2004 edition of the ‘Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves’. Tony Greenaway consents to the inclusion in the report of the
matters based on his information in the form and context in which it appears.
JOHN LEWINS
Managing Director
Glossary
3E PGM platinum + palladium + gold
4E PGM platinum + palladium + rhodium + gold
6E PGM platinum + palladium + rhodium + iridium + ruthenium + gold
7E PGM platinum + palladium + rhodium + iridium + osmium + ruthenium + gold
Au gold
Ir iridium
Pd palladium
Pt Platinum
Rh rhodium
Ru ruthenium
* The six Platinum Group Metals (PGM’s) are Platinum (Pt), Palladium, (Pd), Rhodium, (Rh), Iridium (Ir), Osmium
(Os) and Ruthenium (Ru).
Media enquiries:
Ron Marshman / John Greenhalgh
City of London PR
+44 (020) 7628 5518
Media enquiries:
Sarah Allchurch
Allchurch Communications
+61 (08) 9381 6625
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Appendix 5B
Mining Exploration Entity Quarterly Report
Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98, 30/9/2001.
Name of entity
PLATINUM AUSTRALIA LIMITED
ABN Quarter ended (“current quarter”)
99 093 417 942 June 2006
Consolidated Statement of Cash Flows
Cash flows related to operating activities
Current quarter
$A’000
Year to date
(12 months)
$A’000
1.1 Receipts from product sales and related debtors
1.2 Payments for (a) exploration and evaluation
(b) development
(c) production
(d) administration
(1,050)
(344)
(3,502)
(1,714)
1.3 Dividends received
1.4 Interest and other items of a similar nature received 213 456
1.5 Interest and other costs of finance paid
1.6 Income taxes paid
1.7 Other (provide details if material)
Net Operating Cash Flows (1,181) (4,760)
Cash flows related to investing activities
1.8 Payment for purchases of: (a) prospects
(b) equity investments
(c) other fixed assets
(19)
(106)
1.9 Proceeds from sale of: (a) prospects
(b) equity investments
(c) other fixed assets
1.10 Loans to other entities
(9) (28)
1.11 Loans repaid by other entities
1.12 Other (provide details if material)
Net investing cash flows (28) (134)
1.13 Total operating and investing cash flows
(carried forward) (1,209) (4,894)
6
1.13 Total operating and investing cash flows
(brought forward) (1,209) (4,894)
Cash flows related to financing activities
1.14 Proceeds from issues of shares, options, etc.
21,423 30,217
1.15 Proceeds from sale of forfeited shares
1.16 Proceeds from borrowings
1.17 Repayment of borrowings
1.18 Dividends paid
1.19 Other (provide detail if material) Fundraising Costs
(900) (1,480)
Net financing cash flows 20,523 28,737
Net increase (decrease) in cash held
19,314
23,843
1.20 Cash at beginning of quarter/year to date 7,557 2,546
1.21 Exchange rate adjustments to item 1.20 (589) (107)
1.22 Cash at end of quarter (refer note below) 26,282 26,282
Payments to directors of the entity and associates of the directors
Payments to related entities of the entity and associates of the related entities
Current quarter
$A'000
1.23 Aggregate amount of payments to the parties included in item 1.2 110
1.24 Aggregate amount of loans to the parties included in item 1.10 -
1.25
Explanation necessary for an understanding of the transactions
Included in cash is a bank guarantee being held as consideration for the acquisition of an interest in
the Smokey Hills Joint Venture. Release of the funds is subject to the granting of a new order right
in accordance with South African mining legislation.
Non-cash Financing and Investing Activities
2.1 Details of financing and investing transactions which have had a material effect on consolidated
assets and liabilities but did not involve cash flows
N/A
2.2 Details of outlays made by other entities to establish or increase their share in projects in which the
reporting entity has an interest
N/A
7
Financing Facilities Available
Add notes as necessary for an understanding of the position.
Amount available
$A’000
Amount used
$A’000
3.1 Loan facilities
N/A -
3.2 Credit standby arrangements
N/A -
Estimated Cash Outflows for next Quarter
$A’000
4.1 Exploration and evaluation 2,930
4.2 Development
Total
2,930
Reconciliation of Cash
Reconciliation of cash at the end of the quarter (as
shown in the consolidated statement of cash flows) to
the related items in the accounts is as follows.
Current quarter
$A’000
Previous quarter
$A’000
5.1 Cash on hand and at bank 1,491 50
5.2 Deposits at call 22,832 4,737
5.3 Bank overdraft
5.4 Other: Bank Guarantees 1.959 2,770
Total: cash at end of quarter (item 1.22) 26,282 7,557
Changes in Interests in Mining Tenements
Tenement
reference
Nature of interest
(note (2))
Interest at
beginning
of quarter
Interest at
end of
quarter
6.1 Interests in mining
tenements relinquished,
reduced or lapsed
6.2 Interests in mining
tenements acquired or
increased
8
Issued and Quoted Securities at end of Current Quarter
Description includes rate of interest and any redemption or conversion rights together with prices and dates.
Total number Number
quoted
Issue price per
security (see note 3)
(cents)
Amount paid up per
security (see note 3)
(cents)
7.1 Preference securities
(description)
7.2 Changes during quarter
(a) Increases through issues
(b) Decreases through returns
of capital, buy-backs,
redemptions
7.3 +Ordinary securities 179,015,281 179,015,281
7.4 Changes during quarter
(a) Increases through issues
(b) Decreases through returns
of capital, buy-backs
23,727,708
23,727,708
7.5 +Convertible debt securities
(description)
7.6 Changes during quarter
(a) Increases through issues
(b) Decreases through
securities matured, converted
7.7 Options (description and
conversion factor)
4,281,852
15,000
270,000
5,000,000
2,500,000
730,000
100,000
650,000
4,281,852
-
-
-
-
-
-
-
Exercise price
20 Cents
43.5 Cents
22.5 Cents
35 Cents
20 Cents
37 Cents
83 Cents
37.3 Cents
Expiry date
30 November 2006
14 March 2007
5 November 2008
10 December 2009
11 December 2009
30 November 2009
30 April 2010
24 May 2011
7.8 Issued during quarter 100,000 - 83 Cents 30 April 2010
7.9 Exercised during quarter 1,492,309 1,492,309 20 Cents 30 November 2006
7.10 Expired during quarter
7.11 Debentures
(totals only)
7.12 Unsecured notes (totals only)
Compliance Statement
1 This statement has been prepared under accounting policies which comply with accounting standards
as defined in the Corporations Act or other standards acceptable to ASX (see note 4).
2 This statement does give a true and fair view of the matters disclosed.
Sign here: ............................................................ Date: 28 July 2006
(Director / Company Secretary)
Print name: GILLIAN SWABY
9
Notes
1 The quarterly report provides a basis for informing the market how the entity’s activities have been
financed for the past quarter and the effect on its cash position. An entity wanting to disclose
additional information is encouraged to do so, in a note or notes attached to this report.
2 The “Nature of interest” (items 6.1 and 6.2) includes options in respect of interests in mining
tenements acquired, exercised or lapsed during the reporting period. If the entity is involved in a
joint venture agreement and there are conditions precedent which will change its percentage interest
in a mining tenement, it should disclose the change of percentage interest and conditions precedent
in the list required for items 6.1 and 6.2.
3 Issued and quoted securities The issue price and amount paid up is not required in items 7.1 and
7.3 for fully paid securities.
4 The definitions in, and provisions of, AASB 1022: Accounting for Extractive Industries and AASB
1026: Statement of Cash Flows apply to this report.
5 Accounting Standards ASX will accept, for example, the use of International Accounting
Standards for foreign entities. If the standards used do not address a topic, the Australian standard
on that topic (if any) must be complied with.