PANTON PLATINUM PALLADIUM PROJECT

The Panton Project is located adjacent to the Great Northern Highway, 60km north of Halls Creek in the Kimberly region of Western Australia. The Project is 100% owned by Platinum Australia Limited and is secured by three granted mining leases.

The company completed a Bankable Level Feasibility Study on the Project in August 2003. The BFS showed that the project was technically sound but not commercially viable at the prevailing metal prices and US$ exchange rate. The palladium price in particular dropped from over US$600 per oz to less than US$200 per oz during the study.

The Company believes that the recent strength of the metal prices, which has seen the prices for platinum, palladium and nickel (being the three major contributors to revenue for the project) more than double, has the potential to make the project commercially viable.

PLA is therefore looking at updating the BFS on the project evaluating various options including a smaller start up project treating ore at a third party plant or an initial smaller open pit mine with an on site facility. It is anticipated that this will be completed in the first half of 2008.

Tenements and Ownership

The project ground is secured by three granted mining leases, M80/103, 104 and 105, with all three leases pre-dating the Native Title Act.  PLA must pay a 2% net smelter royalty on PGM production to Minsaco, the original tenement owners, under the purchase agreement between Helix and Minsaco.

Geology and Mineralisation

The Panton Intrusive is a layered, differentiated mafic to ultramafic body that has been intruded into the sediments of the Proterozoic Lamboo Complex in the Kimberley Region of Western Australia. The Panton Intrusive is a structurally complex body that has undergone several folding and faulting events that have resulted in a southwesterly plunging synclinal structure some 10 kilometres long and 3 kilometres wide.

High grade PGM mineralisation is hosted within a number of stratiform chromitite reefs within the ultramafic sequence.  The focus of the BFS has been the Top Reef, which is situated approximately 150 metres below the mafic/ultramafic interface, and the parallel Middle Reef, which is approximately 15 metres below the Top Reef.  The average true thickness of the Top Reef is over one metre and the average grade is 6.1 g/t PGM + Au. The Middle Reef averages 0.5 metres true thickness and has an average grade of 3.4 g/t PGM + Au.

Resource

During the 2003 field season a further six diamond holes were completed to infill an area of widely spaced drilling in the C sub block.  The results were then incorporated into an updated Top Reef resource estimate of 10.1 million tonnes at 6.13 g/t PGM + Au.

A breakdown of the updated high grade resource is provided in the table below.

FEASIBILITY STUDY

Mining

The Mining Study as completed by AMC Consultants envisages an initial development of an open cut mine followed by the sequential development of two underground mines commencing in the second year of the project.  The mining rate would be 600,000 tonnes per annum and mine life will be dependent on the metal prices and US$ exchange rate.  The underground mining operation would be developed as two separate mines accessed through independent declines.  The A mine accessing the A and B sub blocks would be developed first, followed by the C mine which would access the BC and C sub blocks.  Mining would be mechanised using a long hole, up-hole stoping method.

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Processing

The Study envisages processing ore at a rate of 600,000 tonnes per annum at an average head grade of 5.5 g/t and a recovery of 79% Pt+Pd+Au, producing an average of over 80,000 ozs per annum in a high grade concentrate.

The proposed plant incorporates a standard crushing - grinding - flotation circuit to produce a low grade concentrate which is then treated on site through the patented Calcine-Leach-Metals Recovery Process developed by Platinum Australia and Lonmin Plc.

The design of the process plant is based on extensive laboratory test work of open cut and underground samples, combined with pilot plant test work for milling - flotation and the Calcine-Leach-Metals Recovery Process.  The predicted recovery for the processing of primary Panton ore is as follows:

This overall recovery compares favourably with the overall recovery achieved through the traditional recovery route for many South African ores.

The final products from Panton would be a high grade PGM concentrate, with a grade of ~5,000 g/t PGM + Au and +40% Ni + Cu, suitable as feed to a base metal refinery. 

Environmental & Heritage

Environmental and heritage surveys have been completed on the project and have not identified any significant environmental issues that would adversely affect the project.

PANTON PGM RECOVERY PROCESS

As part of the Feasibility Study undertaken on the Panton Project the Company has, in conjunction with Lonmin Plc, developed a new metallurgical process for the recovery of PGM + Au.  The development of this new "Panton Process" was driven by the refractory nature of the Panton ore which resulted in uneconomic recoveries of 65% or less and the production of low flotation concentrate grades of less than 100 g/t PGM + Au, which would be difficult to market.

The new process consists of two distinct parts, a Calcine-Leach Process in which a low grade flotation concentrate is subjected to low temperature calcination followed by cyanide leaching at elevated temperatures to dissolve the PGM's, gold and base metals; and a Metals Recovery Process which recovers the dissolved metals from the leach solution by precipitation and then further upgrades the precipitate to a high grade PGM concentrate and a separate base metal concentrate.

Following extensive laboratory scale testing, the Company, tested the process at a pilot plant scale over a continuous 24 day period.  Based on the results from this testwork the recoveries predicted for the primary Panton ore are as follows:

This new process offers significant benefits over the traditional smelter route for the Panton Project and potentially for other similar projects.  These include:

• Increased or comparable recoveries;
• Reduced concentrate transport costs;
• Shorter processing pipeline and therefore more rapid payment for products;
• Increased payment for products by up to 20%; and
• Reduced environmental impact.

Platinum Australia believes that the advantages offered by the "Panton Process" have the potential to make it an attractive option for projects other than Panton.  The Company is therefore actively seeking opportunities to apply this technology to other PGM projects for the benefit of the Company.