Platinum Australia expects Smokey Hills to be among the lowest-cost producers in the industry, at an average production cost of about $350/oz of 4E PGM. Additionally, the company has hedged 15% of its annual production of platinum and palladium for the next five years at about $2,000/oz for platinum and $200/oz for palladium.

Mining at Smokey Hills is beginning as an open cut but will transition progressively to a shallow underground mine. At design capacity, the mine will produce 720,000 mt/y of ore. Concentrate is being delivered to Impala Refining Services under a life-of-mine off-take agreement. The project has its own electric power generation capacity, which can be applied in the event of supply problems from the South African national power grid.

The Smokey Hills property consists of two adjacent hills rising about 400 m above the adjacent Steelpoort Valley floor and has some 6 km of mapped UG2 PGM reef outcrop around the margins of the hills. The project has a measured and indicated mineral resource of 5.5 million mt at a grade of 5.6 g/mt 4E PGM, containing 1 million oz of 4E PGM.

The underground mine will be accessed via adits, and production will be by means of conventional breast and up-dip stoping. Blasted stope ore will be scraped down to mucking bays in the reef drives and loaded by LHDs into low-profile haul trucks for transport to the processing plant.

Platinum Australia, headquartered in West Perth, Western Australia, has a direct 69.75% interest in the Smokey Hills project, with the balance held by various Black Economic Empowerment (BEE) entities. However, due to the nature of transactions whereby Platinum Australia provided vendor financing for acquisition of the BEE interests, Platinum Australia expects to retain about 85% of the cash flow from the project over the life of the project.