Platinum Australia Limited has announced today (8th October) that it has commenced the commissioning of the processing plant at its Smokey Hills platinum mine in South Africa.

The announcement comes after the company confirmed last Friday that it has also started commissioning the milling section of the plant as it looks to bring it into production.

It is now believed that the first ore will be fed into the plant within the next two weeks, while the first flotation concentrates are set to be produced early next month and sent to the Rustenburg smelter.

The company's Managing Director John Lewins said: "We believe that this is possibly the most important milestone in the history of our company as it marks our transition from explorer/developer to producer.

"We expect the Smokey Hills mine to produce 45,000 to 50,000 oz 4E PGM this financial year to 30th June 2009 and an average of 95,000 oz per annum in future years."

Mr Lewins also confirmed that the mine will be among the most cost-effective in the industry, with a projected average production cost of roughly $350 per ounce 4E PGM against a current basket price of around $850 per ounce 4E PGM.

The company has hedged 15 per cent of its annual production of platinum and palladium for the next five years at around $2,000 per ounce and $500 per ounce respectively, which should further enhance its margin against current prices.

Open pit mining at Smokey Hills commenced in January and it currently has a stockpile of over 60,000 tonnes of ore, a figure which is set to be increased to 200,000 by May next year.

Source:

SMOKEY HILLS COMMENCES COMMISSIONING OF PROCESSING PLANT (08/10/08)

http://www.gtp.com.au/platinumaus/inews_files/ASX0868JDL_081008.pdf