Platinum Australia LimitedLevel 3, 18 Richardson Street West...

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
13 July 2006
POSITIVE RESULT FROM THE SMOKEY HILLS PROJECT FEASIBILITY STUDY
Platinum Australia Limited (ASX:PLA) (AIM:PLAA) is pleased to announce the
preliminary results from the Bankable Feasibility Study (“BFS”) confirm that the Smokey
Hills Platinum Group Metals (“PGM”) Project is extremely robust generating returns in
excess of 60% on the Base Case assumptions and in excess of 300% using current metal
prices and exchange rate.
The key preliminary results from the study are as follows:-
�� The Project delivers a return of 63% on the Base Case and 311% at Current Prices;
�� The Project achieves an NPV10 of US$74 Million on the Base Case and US$251 Million
at Current Prices;
�� The Project has a cash flow (undiscounted) of US$133 Million on the Base Case and
US$404 Million at Current Prices;
�� The Initial Capital Cost of the Project is US$41.5 Million;
�� The Cash Operating Cost is US$228/oz 4E PGM produced;
�� The Project will produce an average of 96,000 oz 4E PGM per annum over a 7 year life.
A full summary of the preliminary results are provided in Table 1 below and the underlying
assumption relating to metal prices and exchange rate are provided in Table 2.
The final results from the BFS will be available in the near future but are not expected to differ
significantly from the preliminary figures.
GRD Minproc (Pty) Ltd are the Lead Engineers for the BFS, while Snowden are responsible for
the Resource Estimate and Mining Study, SRK Consulting for Tailings and Hydro-geological
studies and Africa Geo-Environmental Services for the Environmental Study.
PLA Managing Director John Lewins said: “We are very pleased with these preliminary results
from the Smokey Hills Bankable Feasibility Study which confirm our view that the project is
extremely robust with very low capital and operating costs and therefore attractive margins
which should generate cash flow for the Company of between US$100 Million and US$260
Million during its seven year life”.
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
“We are currently completing a review process of the Bankable Feasibility Study and expect to
have this completed shortly at which point the final figures will be available, however we do not
expect these to vary significantly from these initial figures. PLA is now moving ahead to finalise
arrangements for the funding of the project and with the applications for various permits
necessary to commence operations”.
Table 1 Summary of Preliminary Results from Smokey Hills BFS
Base Case Current Prices*
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 $404 Million
Payback months 22 months 6 months
* Current Prices are as at 10/07/2006
Table 2 Metal Price and Exchange Rate Assumptions
Rand/US Dollar Exchange Rate and Metal
Prices
Base Case
Current at
10/7/2006
Exchange Rate ZAR/US$ 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
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
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 envisages commencing operations at Smokey Hills 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.
Dependent on the issuing of the necessary permits PLA proposes to commence construction
and mining operations in the December 2006 quarter with plant commissioning occurring 12
months later.
Yours faithfully
PLATINUM AUSTRALIA LIMITED
JOHN D LEWINS
Managing Director
Our Ref: ASX0659JDL
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