The debt facility is being provided by Standard Bank of South Africa, and PLA’s initial draw-down of approximately A$15 million follows completion of the A$12- million equity contribution to the project by Phoka Thaba Platinum, PLA’s South African subsidiary.

The capital cost of Smokey Hills was estimated at US$40 million in the July 2006 bankable feasibility study. This, plus an overrun facility, gives a total cost of up to US$49 million at current exchange rates. PLA has committed a further US$2 million to purchase five diesel generators with a combined capacity of 8,000 KVA, sufficient to run the entire Smokey Hills operation on a stand-alone basis, said Lewins.

PLA said it has awarded the contract for underground mining at Smokey Hills to Redpath Mining (South Africa), and anticipates that the contractor will mobilize to site in June. Meanwhile, BNBI-EES Joint Venture, the contractor for the project’s structural, mechanical, pipework and platework installation, has begun work at Smokey Hills.

Lewins said the project has now reached a significant milestone since drawdown of the debt facility was conditional upon completion of the company’s equity contribution and all the required construction and operating contracts being in place.

“We are very pleased to have concluded the underground mining contract with Redpath: which has significant experience in narrow reef mining in South Africa, including current contracts with Aquarius Platinum, Northam Platinum and Lesedi Chrome mine,” said Lewins. “The use of such a mining contractor will ensure that the build up of production from the Smokey Hills underground mine can be achieved as rapidly as possible. In addition, Redpath brings excellent safety systems and procedures which we see as an essential element of our operations.

“With the mobilization of the SMPP contractor, construction activities are continuing to progress and we now have in excess of 250 contractor personnel on site. BNBI has extensive experience in the mining construction industry, with recent contracts including Tati Nickel in Botswana, Langer Heinrich Uranium in Namibia and Bogoso Gold in Ghana,” said Lewins.

Smokey Hills, on the eastern rim of the Bushveld Complex, will initially be an open-cut, progressing to a shallow underground mine during the first year of operations. The ore will be processed on site in a 720,000-mt/y plant that will produce approximately 95,000 oz of 4E PGM (platinum, palladium, rhodium and gold) in a flotation concentrate. This concentrate will be delivered to Impala Refining Services under a life of mine offtake agreement.

PLA signed a formal sale agreement with Smokey Hills Platinum (Pty) Ltd. (SHP) in 2004 to acquire up to 80% of the project through the staged acquisition of 100% of SHP. It acquired an initial 74% interest in SHP by providing US$3.4 million for SHP to fund the purchase of an 80% interest in the project.