PLATINUM AUSTRALIA LIMITED Audio Webcast

PLATINUM AUSTRALIA LIMITED (PLAA)

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PLATINUM AUSTRALIA LIMITED (PLAA) Events

Company (Stock Code)	Date/Time	Event	Timezone: Europe/London
PLATINUM AUSTRALIA LIMITED (PLAA)	Mon, 1 Dec 2008 05:30AM 03:30PM Australia/NSW	PLA - 2008 Annual General Meeting - Mr John Lewins, MD
PLATINUM AUSTRALIA LIMITED (PLAA)	Fri, 5 Sep 2008 03:00AM 01:00PM Australia/NSW	PLA - Africa Downunder Conference Presentation - Mr John Lewins, MD
PLATINUM AUSTRALIA LIMITED (PLAA) Further Wide Zones Of Target Mineralisation	Mon, 11 Aug 2008 03:00AM 01:00PM Australia/NSW	PLA - Kalhari PLatinum Project Results - Mr John Lewins, MD
PLATINUM AUSTRALIA LIMITED (PLAA) $31.8m Commitment in Private Placement of 12M Shares	Tue, 10 Jun 2008 03:30AM 01:30PM Australia/NSW	PLA - Successful Placing to Raise A$31.8M and Addition to S&P/ASX 200 Index - Mr John Lewins, MD
PLATINUM AUSTRALIA LIMITED (PLAA)	Thu, 15 May 2008 10:00AM Australia/NSW	PLA - New Mineral Resource Estimate Doubles PGM ozs - Mr John Lewins, MD
PLATINUM AUSTRALIA LIMITED (PLAA)	Wed, 12 Mar 2008 01:30AM 11:30AM Australia/NSW	PLA - Progress Report re Smokey Hills Platinum Mine - Mr John Lewins, MD
PLATINUM AUSTRALIA LIMITED (PLAA)	Fri, 1 Feb 2008 06:55AM 04:55PM Australia/NSW	PLA - December 2007 Quarterly Report - Mr John Lewins, MD
PLATINUM AUSTRALIA LIMITED (PLAA)	Thu, 8 Nov 2007 11:00PM 09:00AM Australia/NSW	PLA - Mining Right Granted for the Smokey Hills Project - Mr John Lewins, MD
PLATINUM AUSTRALIA LIMITED (PLAA)	Tue, 18 Sep 2007 05:50AM 03:50PM Australia/NSW	PLA - High Grade PGM Mineralisation at Kalahari Project - Mr John Lewins, MD
PLATINUM AUSTRALIA LIMITED (PLAA)	Wed, 23 May 2007 04:00AM 02:00PM Australia/NSW	PLA - Drilling Results, Kalahari Project - Mr John Lewins, MD
PLATINUM AUSTRALIA LIMITED (PLAA)	Mon, 16 Apr 2007 07:15AM 05:15PM Australia/NSW	PLA - Kalplats Project Update - Mr John Lewins, MD
PLATINUM AUSTRALIA LIMITED (PLAA)	Thu, 18 Jan 2007 02:00AM 12:00PM Australia/NSW	PLA - New Mills Ordered for the Smokey Hills PGM Project - Mr John Lewins, MD
PLATINUM AUSTRALIA LIMITED (PLAA)	Thu, 14 Dec 2006 04:00AM 02:00PM Australia/NSW	PLA - Activities Update - Mr John Lewins, MD
PLATINUM AUSTRALIA LIMITED (PLAA)	Tue, 10 Oct 2006 04:45AM 02:45PM Australia/NSW	Excellence in Mining & Exploration Conference PLA - Mr John Lewins, MD
PLATINUM AUSTRALIA LIMITED (PLAA)	Fri, 23 Jun 2006 01:30AM 11:30AM Australia/NSW	AMEC Company Presentation - Mr John Lewins, Managing Director
PLATINUM AUSTRALIA LIMITED (PLAA)	Fri, 28 Nov 2008 09:00AM 09:00AM Australia/WA	Annual General Meeting QV1 Conference Centre, Level 2, 250 St Georges Terraces, Perth, WA
PLATINUM AUSTRALIA LIMITED (PLAA)	Thu, 13 Mar 2008 02:00PM 12:00AM Australia/NSW	Interim Results
PLATINUM AUSTRALIA LIMITED (PLAA)	Tue, 13 Nov 2007 01:00AM 11:00AM Australia/NSW	Annual General Meeting Royal Perth Yacht Club Perth WA
PLATINUM AUSTRALIA LIMITED (PLAA)	Wed, 14 Mar 2007 02:00PM 12:00AM Australia/NSW	Interim Results
PLATINUM AUSTRALIA LIMITED (PLAA)	Thu, 30 Nov 2006 01:00AM 11:00AM Australia/NSW	Annual General Meeting The University Club of WA, Hackett Drive, Entrance 1, Carpark 3 Crawley WA
PLATINUM AUSTRALIA LIMITED (PLAA)	Tue, 14 Mar 2006 02:00PM 12:00AM Australia/NSW	Interim Results
PLATINUM AUSTRALIA LIMITED (PLAA)	Wed, 30 Nov 2005 06:00AM 06:00AM Australia/WA	Annual General Meeting
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PLATINUM AUSTRALIA LIMITED (PLAA)

Please note: This company appears on this website as a result of its listing on the Australian Securities Exchange. Boardroom Radio does not claim any association with any company listed on this site.

PRESENTATION BY JOHN LEWINS, MANAGING DIRECTOR OF PLATINUM AUSTRALIA LIMITED (PLA)

“Africa Downunder Conference Presentation”

http://www.brr.com.au/event/51055

 

FRIDAY, SEPTEMBER 5, 2008, 1:00 PM.

 

            PLA     Well, thanks Craig, and thanks to (inaudible) (00:00:04)) for another opportunity to stand in front of you, a few more than when we started as was

10                    mentioned and give you the ongoing story of Platinum Australia.

 

                        Administers, ladies and gentlemen, it obviously gives me a great pleasure to give you the low down and the update, it’s a mix there, on Platinum Australia and where we’ve got to in the last four to five years of working in South

15                    Africa…southern Africa.

 

                        Just a little bit about Platinum Australia. We are on ASX and AIM listed company, 220 million shares at 12 million options. Our market capitalization ran about $500 million, as you’d appreciate in the current, it does tend to go

20                    up and down a bit on a daily basis. We’re an ASX 200 and AIM 100 company and we’ve got about $25 million in cash at the end of July. Our largest shareholders are New Smith Capital Fund which is a London-based fund; Perpetual Investments here in Sydney; JP Morgan in Australia and also in the UK but the top 10 shareholders would hold about 50% of the shares in the

25                    company.

 

                        I’ll start by just giving you a little bit of information on the platinum supply and demand for those who are not familiar with it. If we look at the demand side of the equation, you can see that effectively, we’ve had a good growth in

30                    demand for platinum over the last 10 years, and only in 2006 did we see a slight drop in demand. However, when you actually look at where that demand is driven, you can see that quite clearly Autocatalyst has gone from being the third largest area of demand to being the primary demand and that’s about 50%. Jewellery, on the other hand, has gone from being the

35                    major demand to actually being now the third largest area of demand, and industrial being the second.

 

                        When we look at Autocatalyst, it’s important to remember especially in this current environment that there actually two sorts of Autocatalysts that we

40                    primarily look at which is petrol and diesel. With petrol Autocatalyst, basically we can substitute platinum with palladium to a very large extent and that, in fact, has happened throughout the world, and as a result the amount of the platinum going into petrol Autocatalyst has dropped significantly.

 

45                    Diesel, on the other hand, due to the differences in engine technology actually cannot be substituted with palladium to any extent. The maximum you can substitute that it is about 25%, so as a result, the Autocatalyst demand is very much driven by diesel. When you look at diesel vehicles in the world today, in Europe, we are somewhere between 50% and 60% of all light vehicles are diesel. In the UK, it’s pushing 50%. In the US, currently it’s less than 5% and that’s one of the reasons that the US, in terms of its fuel consumption is something like 35% worth than the average in Europe. Diesel vehicles are obviously significantly more efficient in terms of use of fuel, have

5                      us pay for a smaller carbon footprint and therefore is seen overseas as an area of significant growth in places like the US where we battle with the increasing prices in energy, petrol, diesel, etc.

 

                        Likewise in Australia, we’re again…we’ve been very slow in taking up diesel

10                    vehicles. Our market here has been less than 5%, it’s growing quite significantly. Added to that, we’ve got stricter emission regulations coming in the US and Europe, and new emission regulations in many parts of the world including obviously China and India, and some of that is obviously being evident with the Olympics over the last month.

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                        When you actually look at demand by the various areas, you can see that Europe is by far the largest area of demand followed by North America, China, and then Japan. That’s pretty much as you would expect when you look at where they sit in terms of industrial capability. However, if you actually

20                    break it down and look at the individual areas, there is a quite stunning anomaly, and that is Autocatalyst as you’d expect in Europe, the largest because its mainly diesel vehicles and it’s about 2 million ounces. The US is under a million ounces and reflecting the fact that there’s far less diesel vehicles there. Japan, less than 500,000, but China 215,000 ounces are used

25                    in Autocatalyst despite that fact it’s the largest or the most rapidly growing market in vehicles in the world, and that reflects the fact that there’s almost no diesel….light diesel vehicles in China. The situation that I think many people believe will change and change quite substantially. So, we see that as a fairly strong potential for growing demand in platinum going forward.

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                        Other areas are basically glass and chemical industry which we expected to grow at about 3% per annum. Jewellery has tended to be price sensitive and obviously as the prices gone up, it’s dropped although it has actually increased in the last twelve months, and China is the biggest market, by far,

35                    for that area of demand. Then, we’ve got new applications such as Fuel Cell, biomedical, etc., etc. If you look at the demand that you can see there for platinum and you try to sort of work out the sort of profile of a person that we’re looking for to target. Basically, we’re looking for a Revhead who drives an SUV, 6 litres, but is environmentally conscious, has switched from petrol to

40                    diesel. He’s, obviously, going to be working in the US or Europe because they have the strictest emissions. He’s got a very high maintenance wife, she loves platinum jewellery. He’s got a TV in every room ….flat screen TV, and he smokes, and he’s got cancer for the third time which uses Platinum drugs. Basically, we’re targeting the Americans. I can say that when I’m in African

45                    Downunder.

 

                        Okay, looking at the supply side, obviously dominated by South Africa and again we’ve seen the growth matching the growth in demand except that we basically had a short fall for nine of the last 10 years. Last year was the first year that we’ve seen South African production drop since way back in the 2000, and that was reflective of number technical issues. It was not as many people think driven by any power issues, because we didn’t have those power issues showing themselves in 2007, so we were about half-a-million

5                      ounces short in 2007, and we’re talking about a market of about 7 million ounces, so it’s a fairly significant number. The projections for this year are that that will increase and impart due to issues relating to power.

 

                        When you look at supply going forward, the only significant potential to

10                    increase production at this point in time is from South Africa producing 80% to 85% of the world’s platinum currently and over 90% of the world’s resource.

 

                        Zimbabwe has some potential but obviously that is limited by the current situation in the country. Our other resources are really secondary or by

15                    product from primarily the nickel and copper.

 

                        Operations in South Africa do, however, face some very significant cost pressures and we’ve seen that in their recent round of reporting from Anglo, Impala, Aquarius, etc., etc. where costs are going up at 20% to 30% per

20                    annum. As the Director General mentioned,  we do face some significant power supply constraints until after 2012, 2013. I point out that  South Africa is like many other countries in that….China for instance, is also facing some fairly significant power constraints at this point time.

 

25                    Looking at the power issues and this is from an Eskom Presentation that shows where Eskom sees the power demand going over the next 20 years and obviously there’s a fairly strong growth in South Africa as you would expect. That’s roughly where we are right now and I think, as the Director General mentioned, we are in a fairly critical position at this point in time. It is,

30                    I think, being managed relatively well, but going forward we have additional power supply coming in and as was mentioned two major power stations being built currently, which is Medupi and the Bravo, which has now been renamed. But, basically, until about 2016, we think that there would be continuing constraints in South Africa in terms of power and that is going to

35                    have to be managed. South Africa is one of the lowest cost suppliers of power n the world today. We’re looking at something less than $0.03 per kilowatt hour which is probably a A$0.25 will be paid here in Australia. So, power is an important issue in the cost especially for deeper mines where a large percentage of the costs relate to operating within the mining

40                    environment. I’ll come back to that one.

 

                        So, we’ve set the scene and now talk a little bit about Platinum Australia itself. We have three projects, all of which are fairly well advanced. Smokey Hills is our most advanced project. There’s 1-million-ounce resource. We are looking

45                    for production of about 95,000 to 100,000 ounces. We have been in construction of that mine since November last year and we’re due to start commissioning it this month. We started mining, I think, in January this year. Kalahari Platinum, our second project with a current resource of 4.2 million ounces, and we’re looking to develop that as an open pit operation of 250,000 to 300,000 ounces a year. Feasibility study is due for completion next month. It is unique in South Africa and that it is a Platinum project that is not in the Bushveld, it’s actually in the Stella Layered Intrusive in the Kalahari region. Then our third project is the Panton Project which is here in Australia. We had

5                      at least to have one in Australia, otherwise. we have to change our name. It’s 2.4 million-ounce resource. It’s the largest resource in Australia. We’re targeting a 50,000 ounce a year operation and we’re currently in the process of updating a feasibility study on that.

 

10                    Looking at South African, which is obviously the main focus for us at this point time, our two projects, one, Smokey Hills is on the eastern limb of Bushveld, over here, and our second project, as I mentioned, Kalahari Platinum, not in the Bushveld, which is this area here, over here on what’s called the Kraaipan Greenstone Belt in the Stella Layered Intrusive.

15

                        Smokey Hills, strangely enough, very inventive name… actually two hills and in winter when they burn wood to keep warm, it’s relatively smoky as well. As you can see, basically we have a reef outcropping all the way around one hill and halfway around the other. Dipping into the page here, at about 13

20                    degrees and this is Modikwa ground, it’s an ARM-Anglo joint venture mine producing about 300,000 ounces a year currently.

 

                        In terms of the ownership structure, Platinum Australia owns just under a 70% of the project. The balance is held by a variety of BEE interest. We have a

25                    consortium of Black Economic Empowerment parties, the largest of which is local community which has 9% of this project. We sold the majority of our interests on a commercial basis and as a result of the terms under that, we retained about 85% economic interest in the project. Within that consortium, they include local, provincial, and national BEE parties. We’ve attempted to

30                    try and make sure that we don’t stick with the usual suspects as I believe they are referred to by the department.

 

                        In terms of finance and development, initial capital cost about US$52 million. Debt finance is by Standard Bank of South Africa about US$37 million. The

35                    equity contribution came from cash reserves which we’ve completed although we retained also an overrun facility and we’ve drawn down about US$30 million of that debt and we’re about to draw down the balance. So, the project is obviously well advanced. We did commit to this project very early. We actually ordered our mills in December 2006, just after we had applied for a

40                    Mining Right. The idea of being that it would be a 12-month delivery and therefore we wanted to make sure we could hit the ground drilling. We awarded the EPCM Contract in July of 2007. The Mining Right was issued on the 7th of November 2007. The Director General did, however, fly to me that it was coming and that I should be on sites within with two weeks which I had

45                    promised him, and so we actually got on site on the 19th of November which was two days shorter the two weeks I’d promised, and we actually started work on that day. We signed an offtake with Impala in December and we started open pit mining in January of this year.

 

                        One of our issues obviously that I did flag is power and we tried to be proactive in looking at the power issue. We have installed generating capacity sufficient to be able run the entire operation independent of Eskom. We do have a contract with Eskom for power. They currently have connected us with

5                      about 2 megawatts of power, which is our initial construction power with the balance due to be connected late this year or early next year. It’s still being finalized and that will give us an ability to run entirely on Eskom, but should any issues arise we can run without that Eskom power entirely.

 

10                    In terms of the impact of that if we have to run entirely on Diesel, it would cost us about $80 an ounce, which is relatively low by industry standards and the reason for that cost is simply is that Smokey Hills is an open-pit underground project and the underground is basically we’re putting drives into the side of the hill on-reef, so we’ve got no shafts, we’ve got no declines, no cooling

15                    systems required, so our power consumption is probably the lowest in the industry in terms of kilowatt hours per ounce.

 

                        Underground mining contractor is on site setting a set up their facilities on site. Commissioning is due to start this month with full production being

20                    headed in December. As many would be aware, when you deal with the banks, on of their issues is hedging so we have been required to put some hedging in place. We got about 15% of our platinum hedged at about US$2,000 an ounce for five years. Some of our shareholders criticized us for doing that a couple of months ago, those same shareholders seem to think

25                    we’re pretty smart today.

 

                        In terms of the project itself, the BFS in July, you can see that it was an extremely attractive project as we saw it. As of today, it is a far more attractive project driven obviously by a significant increase in metal prices.

30                    Obviously, our capital has grown up from when we’ve completed the study as of the operating costs, but even at today’s prices, the metal price is almost double that which we allowed for as our base case in the feasibility study and generates about US$90 million per annum EBITDA for a project that cost a little bit over US$50 million. We think is reasonably attractive, and it does

35                    show that small projects…. small can be beautiful.

 

                        Our second project, which is our main project, the Kalahari Platinum or Kalplats Project which is not obviously to be mistaken for Kopats which you find in the fields around the project. It’s a joint venture with ARM Platinum.

40                    We’re earning 49%, they’re obviously our BEE partner. With 300 kilometres or just over 300 kilometres West of Johannesburg, we’re almost called the Kraaipan Greenstone Belt. We’re 45 kilometres from the nearest mine which is the Kalgold Mine, which is on the other lake of the Kraaipan Greenstone Belt. Generally, good infrastructure, the roads are within about 10 kilometres

45                    to 15 kilometres are pretty flat. We do have grid power already on site, although obviously not enough to run the mine and that I guess is one of our issues going forward. It is a layered intrusive, so the genesis is basically the same as Bushveld, the large magma chambers slowly cooling, series of layers of reefs precipitating out, and some of these being rich in PGMs. In the case of the Stella Layered Intrusive, these are magnetite reefs rather than chromatite reefs and that obviously is very positive. We’re looking at the concentrate you produce because we have no chrome in our concentrate which is an issue in smelting. It’s 12 kilometres strike length but has 46,000

5                      metres drilled before we became involved in the project and seven deposits identified. The deposit themselves, only two had been actually been modelled and that was the crater on Orion. There were crater up here and Orion, may be modelled down to 200 metres and crack was the only other one that had been defined down to that depth. The rests significantly shallower, but every

10                    single one of them open to depth and we obviously saw that as a major potential for expansion and the resource at that time was 3.4 million ounces.

 

                        This is what it looks like, so basically very simplistic. That’s about a 50-metre wide envelope of mineralisation and that contains the total resource running

15                    at about 1.5 grams per tonne, but our focus, however, is on the three high-grade resource, MR Reef which runs at about 2.5 grams per tonne, the LM Reef which runs at just over 3 grams per tonne, and then the UM Reef which runs a little bit over 4 grams per tonne. Cumulatively, 7 metres to 10 metres at about 3.5 grams per tonne open pit. When you compare that with many of

20                    the underground operations in South Africa, you can be mining 1.5 metres at 3 grams. This is open pit, 7 metres to 10 metres at 3.5.

 

                        Initial resource update which was completed by Snowden, basically crux…. we’ve more than doubled ounces by increasing the strike length of the project

25                    by some 800 metres. Crater in Orion, we’ve increased by about 10% from that which was previously modelled. So overall from the three resources we’ve done so far which were all already estimated down to 200 metres, we’ve added almost 800,000 ounces.

 

30                    So in summary, the project we’re looking at has a capital cost of around US$200 million. Operating cost around US$300 an ounce, that’s a relatively low operating cost. Current basket value is about US$1,000 an ounce. We’re looking for 250,000 to 300,000 ounces a year. Stand alone power is being looked at as an option, although we believe that we’ll be able to get into a

35                    situation of a combined Eskom and our own power, which is very much, so the Eskom are encouraging companies to move. We’re looking at multiple open pit. Flotation concentrates to smelter, and importantly this is an open pit, so we’re looking at rapid start of production. We finished our feasibility study in the next month or so. We’ll be looking to put a Mining Right application in

40                    very soon after that, and we would expect to get the Mining Right within about twelve months, which would allow us to start development towards the end of next year and be in production late 2010 or early 2011.

 

                        Some of the other prospects that we’ve got to be developed post our

45                    feasibility study, there are outside of the seven deposits I’ve spoken about so far, Scorpio, Mira, Sirius South, Pointer, Vela…there a myriad of other prospects within this 12 kilometres that we will be focusing on over the next twelve months to enhance the resource that we’ve already defined.

 

                        In addition to the 12 kilometres that I’ve been talking about which is this area in red here, we have a joint venture covering a further 38 kilometres of strike length on the Kraaipan Greenstone Belt. It’s a joint venture, it’s a 50:50 joint venture with ARM, we are the managers of this as well, and this is some of

5                      the first aeromagnet we flew. This is the 12 kilometres we’ve been talking about. There’s a major fault structure here and we believe that this is a continuation of the layered intrusive and certainly the aeromag and some of our soil geochem tend to reinforce that. So, we will be drilling in this area here in the coming months having now completed our resource definition drilling

10                    on the main project up here. That’s the most (inaudible) (00:22:24) hole that we’ve drilled so far, as you can see it, it is just North of the fault, so we are fairly  bullish on the extension area as well.

 

                        More recently, we have also announced that we’ve acquired, in joint venture

15                    with Batsalani, which is one of our BEE partners from the Smokey Hills project, a further 26 kilometres of strike length which is 51:49 joint venture.  By spending some of the funding on that, we can increase to about 70% holding, so the total strike length we’re now looking at is 76 kilometres on that particular area.

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                        Last but not least is our Panton Project which is here in Western Australia which of course, is the closest bit of Australia to Africa. It’s the most advanced PGM project in Australia. The total resource is 2.4 million ounces including a top reef resource of 10 million tonnes at 6 grams per tonne over about 2

25                    metres. We developed our own process is as patented process in combination with Lonmin….or is that (inaudible) (00:23:34) finished yet?  No, no, it’s still going.

 

                        So, in joint venture with one of the larger companies, we developed our own

30                    Panton process to maximize the volume of material that we get from the project. We get about 80% term recovery into 90% payable metal. We finished the feasibility study on the project in 2003, and basically, it didn’t meet our financial hurdles. Since that time, of course, metal prices have more than doubled and therefore we’re updating the feasibility study. What we’re

35                    looking at is basically an open pit for 3 to 4 years and then going underground about 50,000 ounces and there producing a high-grade concentrate which is able to be treated in places like China and Japan.

 

                        That is our production profile as we see ourselves moving forward, basically

40                    about 50,000 ounces this year moving to something in the order of 240,000 ounces out of South Africa by 2010 and 2011.

 

                        Last but not the least, I’ll put that one up for as long as possible so that everybody can read it, that’s a bit that says, it really did sound fantastic and I

45                    can assure you that it is. South Africa, is a country that Australian companies can work in and can be successful in, and if you look at our Smokey Hills Project, we actually started drilling on that project in 2005 and we’re coming into production. It had never been drilled and we’re coming into production in 2008. That is what can be done in countries like South Africa with a little bit  of Aussie knowhow. So, thank you very much. Thank you.

 

PRESENTATION CONCLUDED

 

 

 

 

Contact brr@brr.com.au for more information

 

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