Smokey Hills will exploit a resource of 1 million oz of 4E PGM in the UG2 Reef which will be mined initially as an open cut and progress to a shallow underground mine. The on-site processing plant will have a design capacity to treat 720,000 mt/y of ore and recover the contained PGMs into a flotation concentrate.

The capital cost of the project was estimated in a July 2006 bankable feasibility study to be $40 million and this, plus an overrun facility, gives a total capital cost of up to $49 million. Standard Bank of South Africa is providing up to approximately $40 million of debt funding while PLA and Corridor Mining Resources, the Limpopo Provincial Government company which holds 15% of Smokey Hills, have already contributed 75% of the equity component. The balance, according to PLA, is covered by its current cash resources of around A$23 million.

On the basis of the value of Smokey Hills established by the bankable feasibility study, PLA will sell down its interest in the project to 59% in order to introduce a further Black Economic Empowerment (BEE) component. However, because of the nature of the transaction whereby PLA provides vendor financing, the company expects to retain approximately 75% of cash flow over the life of the project.