Plastics Capital Share Discussion Threads

[justjules] 13/7/2006 13:48

Ash... does put a big smile on the old face:-)

[mr ashley james] 13/7/2006 13:47

Jules 311% Internal Rate Of Return NPV The Smokey Hills Project alone US$251,000,000 WOW!

PLA following BFS Complete up to 80% ie US$200m.

[justjules] 13/7/2006 09:26

more news flow
release of preliminary results of feasability study on Smokey hills this morning

Positive Result from Study

RNS Number:1365G
Platinum Australia Limited
13 July 2006



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".


"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






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

[mr ashley james] 13/7/2006 02:10

John,

Now we are through AU$0.97 looks like AU$1.23 is coming into play as next target.

Exciting times, must admit not entirely convinced when full likely scope of Kalplats known we are n't going to see AU$1.65 pretty rapidly.

Awaiting with great anticipation updates, and also the new reality check on the Panton hidden value.

All IMHO, NAG, DYOR etc

Cheers

Ash:)

[mr ashley james] 07/7/2006 16:55

Pt US$1223 x 2.47/6.60 6PGE 2.47/5.60 4 PGE =US$457.70 6 PGE US$539.43 4PGE
Pd US$ 321 x 2.54/6.60 6PGE 2.54/5.60 4 PGE =US$123.54 6 PGE US$145.60 4PGE
Rh US$4630 x 0.51/6.60 6PGE 0.51/5.60 4 PGE =US$357.77 6 PGE US$421.66 4PGE
Ir US$ 380 x 0.21/6.60 6PGE 0.21/5.60 4 PGE =US$ 12.09 6 PGE US$ 14.25 4PGE
Ru US$ 170 x 0.80/6.60 6PGE 0.80/5.60 4 PGE =US$ 20.60 6 PGE US$ 24.29 4PGE
Au US$ 630 x 0.08/6.60 6PGE 0.08/5.60 4 PGE =US$ 7.64 6 PGE US$ 9.00 4PGE


Totals =US$979.34 6 PGE US$1,154.23 4PGE per toz

Average per Tonne Platinum US$97.12 Palladium US$26.21 Rhodium US$75.92 Iridium US$2.57 Ruthenium US$4.37 US$1.62=US$207.81 per Mt

All IMHO, NAG, DYOR, etc

Cheers

Ash:)

[mr ashley james] 07/7/2006 15:09

Pt US$1223
Pd US$ 321
Rh US$4630
Ir US$ 380
Os US$ 360
Ru US$ 170
Au US$ 630

[justjules] 07/7/2006 14:58

Ash
thanks for all your research, it is seriously helpful.
Jules

[mr ashley james] 07/7/2006 14:54

Jules,

Going to go through Basket PGM Prices again, now that the Rhodium, Platinum, and Palladium prices have risen so much, and indeed lesser PGMs like Irridium, Rhuthenium and Osmium have followed the location, management, JV Partners like African Rainbow Minerals etc so impressive, I feel the increased Gross and Net Future Profits from the projects, the IRR, the robustness of the projects, the Benjamin Graham Margin of Safety so high that I should be using above average valuations on this scale for RSA PGM Properties this fill all the boxes like PLA.



There is a report issued by Mining Business Digest in 2000, with an article actually listing the values paid for mining deals worldwide in The Mining Journal 15th December 2000, which sumarises ore reserve acquisition costs by North American companies during the 1990's. A Decade of Deals analysed 429 transactions (including 314 gold, 45 copper and 34 gold-copper deals), the numbers make interesting reading:-

END-1999 GOLD PROPERTY ACQUISITION COSTS (US$/OZ)
------------------------------------------PROPERTY TYPE---------------------
--------------------------Exploration-Development-Production-Corporate
Normal Expected Lower Limit--US$ 3------US$ 20------US$ 45------US$ 70
Expected Average-------------US$ 7------US$ 33------US$ 60------US$ 80
Normal Upper Limit-----------US$10------US$ 40------US$ 75------US$100

Lower-% of price*------------1.0%--------6.9%-------15.6%-------24.2%
Average-% of price-----------2.4%-------11.4%-------20.8%-------27.7%
Upper-% of price-------------3.5%-------13.8%-------26.0%-------34.6%

Note Upper and lower limits are for an "average" acquisition, and are often exceeded for various reasons. Source:Mining Business Digest. *End-1999 price of US$289/oz.

Need to go through scale will start with Smokey Hills and try to revalue each ie Panton, Smokey Hills and Kalplats so we can see how the value should develope in 2006 to 2007.

Table 1
Smokey Hills PGM Project UG2 Reef#1 Mineral Resource#2

Tonnes#3 4E PGM 6E PGM Pt Pd Rh Au Ru Ir
Mt g/t g/t g/t g/t g/t g/t g/t g/t

Measured 3.6 5.59 6.60 2.47 2.54 0.51 0.08 0.80 0.21

Indicated 1.9 5.57 6.59 2.49 2.49 0.50 0.08 0.80 0.21

Total 5.5 5.60 6.60 2.47 2.54 0.51 0.08 0.80 0.21


I do not agree that high grade PGMs should only be valued at US$25 to US$50 per toz, against a basket price that has gone from US$750 to US$1250 over last two years, and where Gross Mining Margins have probably more than doubled over the same period.

All IMHO, NAG, DYOR etc

Cheers

Ash:)

[mr ashley james] 07/7/2006 11:32

Jules,

Yes I think at a roughly US$1200 per toz PGE Basket Price the Internal Rate of Return on Smokey Hills is quite frighteningly profitable circa 200%.

Onwards and upwards, Kalplats news however the Big One.

Cheers

Ash:)

[justjules] 07/7/2006 07:40

Ash, hi
this is all good news and bodes well for the future.
Completion of the smokey hills resource estimate for the bankable feasability study is good news with its estimate reaching 1 million ozs which has increased by approximately 4%

[mr ashley james] 06/7/2006 15:28

Hi Jules,

Think Kalplats Exploration Licence award announcement and commencement of 15,000 Metres of drilling in 2006, 30,000 metres in 2007 plus hopefully results from first holes from August should keep steady newsflow on this one.

Apparently drilling will be to typically 75 to 200 metres depth along 12km strike length, so must be 100 to 150 drill holes in 2006.

I am of the opinion that if 12km strike, orebody 20 metres to these kind of depths open pit we could have a very large open pit operation, so big upside here at Kalplats which I see as a major PGM Producer Company maker.

BFS on Smokey Hills also imminent, I hear institutional demand in Australia on this share significant with last placing being unable to accept all offers of capital.

Which should mean that there is likely to be a strong aftermarket.

Still incredibly bullish on this stock and personally think it will hit AU$1.81 by end first Qtr 2007 on Drilling Successes on Kalplats IMO

All IMHO, NAG, DYOR etc

Cheers

Ash:)

[justjules] 06/7/2006 09:20

morning Edward
hadn't read all that but having now had time to have a better look, I totally agree with what you have said

[compoundup] 06/7/2006 09:14

Morning Jules :-)

Let's hope Hichens Harrison are better analysts than they are report writers. The technical content is certainly encouraging but they should be ashamed of putting out such badly written report. I'm not just talking about typographical errors and bad grammar, (of which there are many examples), but outdated resource information that they use for comparison e.g. "...expected late 2005". It hardly inspires confidence when they can't be bothered to check what they are putting out is entirely up-to-date.

Hichens, Harrison & Co Plc Research Report on PLA:

[justjules] 06/7/2006 08:15

Hitchens Harrison annd co. report out and readable on

a couple of snippets from the report include
1. The existing ore body at Kalpats, knwn over a strike length of 12km has the potential for both strike and depth exctension as well as the possibility of multiple reefs as shown by the magnetic survey.
Should any one of the 3 dimensions be increased the value has the potential to double.

2. we value the current assets at 46pence per share but believe that Kalpats project has the potential to provide a valuation way in excess of that figure.


Nice:-)

[mr ashley james] 03/7/2006 13:42

Yikyak,

Still trading at a AU$0.08 Discount to the last placing at AU$0.95 in Australia but I fear not for long.

Expecting continued strength in PGM Futures markets on NYMEX/COMEX Open.

I think Pt is quite likely to test US$1300 this week probably and will be interested if Pd can regain it previous run on US$400

[mr ashley james] 30/6/2006 14:55

Platinum Futures up US$44.30 from US$1205.70 to US$1250

[mr ashley james] 27/6/2006 09:36

Updated Commodity Futures Charts in Header

[mr ashley james] 26/6/2006 15:55

Kalplats Licence is the news I am waiting for.

[compoundup] 26/6/2006 14:32

Imminent Smokey Hills BFS should help.

[mr ashley james] 26/6/2006 14:10

Yikyak,

PLA beginning to look cheap now relative to recent AU$0.95 Placing.

[yikyak] 04/5/2006 11:36

I wonder if PLA intend to get a North American listing?

With very limited options of producer status a junior alternative against PAL and SWC would go down a storm imho especially given the location of the Panton project.