FIRST GLANCE | COMMENT OCTOBER 8, 2008 Platinum Australia Limited (ASX: PLA; 1.27; AIM: PLAA) Smokey Hills Commissioning Commenced Sector Perform Above Average Risk Impact Positive - First production is now imminent. First Impression Platinum Australia (ASX: PLA; AIM: PLAA) revealed that commissioning of flagship project Smokey Hill's processing plant began on October 3rd. • Starting with Milling - According to PLA, several drives have been energised. Other areas of the plant will be commissioned over the coming weeks. • First Concentrates in November - First ore is expected to be fed over the next fortnight, with first flotation concentrate expected in early November. Transformational Opportunity PLA is the first of a small handful of PGM juniors we expect to make the transition from explorer to producer over the next few years. The recent market turmoil we believe has created a unique buying opportunity into a company which we believe possesses a number of key competitive advantages: • PLA will be a rarity amongst junior companies in that it will soon be generating cash flow, a highly-desirable characteristic given current global credit-constrained environment. • That PLA's two key projects are near-surface is important given the on-going South African electricity crisis and the industry-wide inflationary environment. The projects' resultant lower power requirements and lower costs mean PLA is a likely takeout target for larger producers seeking to swap expensive deep assets for cheaper shallower ones. • The same electricity crisis means that junior PGM companies coming into production later will find it difficult to secure a home for their concentrates, whereas PLA's is assured of one with Impala Platinum. Given the above, we have believe PLA will re-rate with time, particularly as it demonstrates its ability to make a success of Smokey Hills. We reiterate our Sector Perform, Above Average Risk ratings. RBC Capital Markets currently acts as Broker to Platinum Australia Ltd.
PLA Price at posting:
76.5¢ Sentiment: None Disclosure: Not Held
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