I thought it might be worthwhile re-visiting PLA's Panton project.
Following is an extract from last years announcement on 14/7/03...
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"Results of Panton Platinum Palladium Feasibility Study
The Directors of Platinum Australia Limited (“PLA”) have now received the preliminary results of the Feasibility Study carried out on the Panton Project. The results indicate that while the project is technically sound it is not commercially viable at the current metal prices and exchange rate.
During the term of the Feasibility Study the palladium metal price dropped from over US$600 per ounce to less than US$200 per ounce and the Australian dollar climbed from US$0.52 to US$0.65. Partially offsetting this has been an increase in the average grade of the resource at Panton and the increased value of the final product as a result of the successful development of the new metallurgical process for the recovery of PGM’s by PLA and Lonmin*. These very significant improvements have increased the value of our final products by almost 30%; however this has still not been sufficient to overcome the drop in revenue of almost 50% caused by adverse commodity price and exchange rate movements. Therefore while the project would be commercially viable at the prices and exchange rate prevailing at the start of the Feasibility Study, this is not the case currently.
The Board therefore believes that it is appropriate at this time to put the development of the Panton Project on hold until improvements are seen in the exchange rate and palladium price."
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By their own admission, the project was viable prior to the 50% drop in expected revenue due to the "adverse commodity price and exchange rate movements".
However, they also mention that "partially offsetting this has been an increase in the average grade of the resource at Panton and the increased value of the final product as a result of the successful development of the new metallurgical process for the recovery of PGM’s by PLA and Lonmin*. These very significant improvements have increased the value of our final products by almost 30%"
So...it would appear that the project effectively suffered a 20% expected revenue decline over the period of the feasibility study, which pushed the project from "economic" to "sub-economic"!
Last year, when the feasibility study decided it was "not viable at the current metal prices and exchange rates"...
The Panton Project is huge...resources as at June 2003 were 14.3Mt @ 5.2 g/t PGM + Au, 0.3% Ni and 0.08% Cu for 2.39Moz PGM+Au, 43,000t Ni and 11,000t Cu..
The overall grade has since improved by about 10%...but I can't find the current figures.
Anyway, my guess is that the project is currently "line ball" and could very well get another chance at life in the very near future...and given current commodity price and exchange rate trends, things only look to be getting better!
Cheers!
PLA Price at posting:
0.0¢ Sentiment: None Disclosure: Not Held
