FIRST GLANCE | COMMENTOCTOBER 8, 2008Platinum Australia Limited...

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.