new order right cession for smokey hills pgm

Platinum Australia Limited
Level 3, 18 Richardson Street West Perth Western Australia 6005 Australia
T: + 61 8 9324 1494 F: + 61 8 9226 4259 E: [email protected] W: www.platinumaus.com.au
ASX Release
11 September 2006
NEW ORDER RIGHT CESSION FOR SMOKEY HILLS PGM PROJECT
Platinum Australia Limited (ASX:PLA) (AIM:PLAA) is pleased to announce that it has
been granted a cession transferring the New Order Prospecting Right covering the
Smokey Hills Project to PhokaThaba Platinum (Pty) Ltd (“PhokaThaba”), the Joint
Venture company in which PLA has an 80% interest.
Commenting on the news, PLA Managing Director John Lewins said: “The issue of the cession
transfers the Prospecting Right from our Joint Venture partner, Corridor Mining Resources, to
our joint venture company, PhokaThaba. This is important as it allows PLA to submit the
application for the Mining Right in the name of PhokaThaba, the company in which we have an
80% controlling interest.”
“We have commenced preliminary engineering work on the project to enable us to order long
lead items, such as the mills, to ensure the project is developed as quickly as possible following
the issue of the Mining Right. We are hopeful of obtaining the Mining Right in late 2006 or early
2007 at which point we would commence mining and toll treatment of ore while we undertake
construction of the treatment plant. We would expect to commence commissioning of the
treatment plant and commence production of concentrates in late 2007.”
PLA is currently in discussions with a number of banks regarding the funding of the Project and
expects to issue a mandate in the near future. Following a share placement in May of this year
which raised $21 million, the Company has some $25 million in cash, sufficient to provide its
share of equity funding for the Smokey Hills Project and to fund the Pre and Bankable
Feasibility Study on the Kalplats Project.
Smokey Hills PGM Project
The Smokey Hills PGM Project is located on the eastern limb of the Bushveld Complex in the
Limpopo Province, 300 kilometres north of Johannesburg.
PLA has signed a formal Sale Agreement with Smokey Hills Platinum (Pty) Ltd (“SHP”) to
acquire up to 80% of the Project through the staged acquisition of 100% of SHP. PLA acquires
an initial 74% interest in SHP by providing $3.4 million for SHP to fund the purchase of an 80%
interest in the Project. The balance of 26% in SHP will be acquired for 15 million fully paid
shares in PLA. The balance of the Project is held 5% by the local community and 15% by
Corridor Mining Resources, a Company owned by the Limpopo Provincial Government.
PLA commenced a resource definition drilling program on the project in July 2005 and a
Bankable Feasibility Study with GRD Minproc as the Lead Engineer in October 2005.
The Company has recently completed a Bankable Feasibility Study on the project, the key
results of which were as follows:
Platinum Australia Limited
Level 3, 18 Richardson Street West Perth Western Australia 6005 Australia
T: + 61 8 9324 1494 F: + 61 8 9226 4259 E: [email protected] W: www.platinumaus.com.au
�� The Project would deliver a return of 74% on the Base Case and 670% at Average July
Prices;
�� The Project would achieve a pre tax NPV10 of US$60 Million on the Base Case and
US$230 Million at Average July Prices;
�� The Project would generate a cash flow (undiscounted) of US$139 Million on the Base Case
and US$396 Million at Average July Prices;
�� Initial Capital Cost of the Project would be US$40.5 Million;
�� Cash Operating Cost of US$226/oz 4E PGM (platinum + palladium + rhodium + gold)
produced (net of base metal credits);
�� The Project has a JORC compliant reserve of 763,000 oz 4E PGM and would produce an
average of 95,000 oz 4E PGM per annum over a 7 year life.
The BFS envisages commencing operations initially as an open cut and then progressing to an
underground mine. During the initial phase while the plant is under construction PLA proposes
to mine ore for toll treatment through a nearby plant to generate early cash flow. This phase
would last for approximately 12 months after which ore would be treated through the on-site
plant producing a flotation concentrate for sale to any one of a number of smelters in South
Africa, the nearest of which is less than 100 kilometres distant.
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.
Yours faithfully
PLATINUM AUSTRALIA LIMITED
JOHN D LEWINS
Managing Director
Ref: ASX0675JDL
Further Comments:
Mr John Lewins
Managing Director
Platinum Australia Limited
P: (08) 9324 1491
M: 0419 910 061
Media Enquiries:
Ron Marshman / John Greenhalgh
City of London Public Relations
P: +44 (020) 7628 5518
Media Enquiries:
Sarah Allchurch
Allchurch Communications
P: (08) 9381 6625
M: 0412 346 412