Read this stock and after reading it... do you think the current...

Read this stock and after reading it... do you think the current share and options prices will stay where they now are?

Sylvania Resources Limited
Level 4, HPPL House
28 – 42 Ventnor Avenue
West Perth WA 6005
Tel: (61 8) 9481 8711
ACN 091 415 968
Postal Address
PO Box 368
West Perth WA 6872
Fax: (61 8) 9324 2977
9 March 2004

The Manager

Company Announcement Office
Australian Stock Exchange Limited
Exchange Centre
20 Bond Street
Sydney NSW 2000

Dear Sir,

Re: Sylvania participates in Consortium with Aquarius Platinum to extract Platinum Group Metals (“PGM’s”) from Chromite tailing retreatment Sylvania Resources Limited (“Sylvania”) announced today that it has entered into an agreement to acquire a 25% interest in a Consortium (known as RK1) led by Aquarius Platinum Limited which will undertake a project to treat chromite tailings through a purpose built plant at its Kroondal Mine in order to extract the platinum group metals (platinum,palladium, rhodium and gold). Sylvania’s 25% interest in the Consortium will be held through its 100% owned South African subsidiary, Sylvania South Africa (Pty) Ltd.

The initial year of the project is expected to yield in excess of 20 000 ozs of platinum group metals (PGMs), growing to 28 000 ozs per year from the second year, with 25% of the production attributable to Sylvania.
The capital cost of the project, which is to be managed by Aquarius Platinum (South Africa) (Pty) Ltd, is estimated to be R28.5m (including working capital) with plant construction commencing this month and a rapid ramp-up to full production being achieved by December 2004. At R7/US$1 operating costs are expected to be US$170 per PGM oz in year one reducing to US$145 per PGM oz thereafter.

The project economics have been conservatively modelled and are very robust over a wide range of metal prices and exchange rate assumptions. An after-tax internal rate of return of 72% is generated at the current basket price of US$ 521 per PGM oz with an exchange rate of R 7/ US$ 1.

During the construction of the RK1 plant, the consortium will commence work on RK2, which will be a similar style chromite retreatment project centred on Aquarius’ Marikana Mine. Discussions relating to a proposed RK3 project are also underway.

The Directors of Sylvania see participation in this consortium as a rare opportunity to gain access to PGM cashflow, with low risk, and immediate potential for growth of the earnings stream via the development of further chromite retreatment projects.