The Kalahari Platinum ("Kalplats") project is located in the North West Province of South Africa, 330 kilometres west of Johannesburg.

Platinum Australia Limited ("PLA") has signed a formal Joint Venture Agreement with African Rainbow Minerals Platinum (Proprietary) Ltd ("ARMplatinum") which provides for PLA to earn up to 49% of the Kalplats Project by completing a Bankable Feasibility Study ("BFS") on the project and making the "Panton Metallurgical Process" available for the project at no cost.

The Kalplats Project is well advanced with over 45,000 metres of drilling having been completed between 2000 and 2003 to define a combined Indicated and Inferred Resource of 3.4 million ounces of 3E PGM (Pt + Pd + Au), including a high grade resource of 12 million tonnes @ 3.6 g/t 3E PGM for 1.4 million ounces 3E PGM.

PLA believes that subject to the completion of a Bankable Feasibility Study ("BFS"), the Kalplats Project has the potential to be developed initially as a major open cut mine producing 200,000 to 300,000 ounces of 3E PGM per annum with a life of +10 years. This could be followed by a similar sized underground operation more than doubling the life of the project.

A Prospecting Right for the Project was issued in September 2006 and PLA immediately commenced a 45,000 metre resource development drilling program which is due for completion by the end of 2007.

It is anticipated that a BFS will be completed on the project by March 2008.

GEOLOGY and MINERALISATION

The project lies within the western limb of the Kraaipan Greenstone Belt, some 45km to the west of the existing Kalahari Goldridge mining project ("Kalgold").  The Platinum Group Metal ("PGM) mineralisation is developed within the Stella Layered Intrusion hosted within the Kraaipan greenstones.

The PGM mineralisation occurs as magmatic segregation reef deposits that are hosted in a magnetite gabbro within the steeply dipping Stella Layered Intrusion (SLI).  A total of seven separate PGM deposits and three prospects have been identified over the 12km strike length of intrusion and potential exists for further discoveries in the project area.

The host Kraaipan greenstone lithologies comprise deformed and metamorphosed volcanosedimentary rocks and associated granitoids; while the SLI comprises a series of layered, relatively unfoliated cumulate-textured gabbros, leucogabbros and magnetite gabbros.  The magnetite content ranges from finely disseminated (1-2%) to strong segregations forming discrete magnetite layers (50-90% magnetite).

Rocks from the SLI have been dated in the order of 3.0 billion years (Archaean), which is substantially older than the 2.0 billion years of the Bushveld Igneous Complex that hosts the Merensky and UG2 reefs.  This Archaean age make the Kalplats deposit one of the oldest known PGM deposits.

The SLI has undergone multiple stages of deformation including an initial folding event, layer parallel thrusting and cross-cutting brittle faulting.  This late stage faulting has also seen the emplacement of felsic and mafic intrusive dykes.  This complex structural history has resulted in localised duplication of the mineralised package, the emplacement of barren waste material into the mineralised package and dextral en echelon fault block displacement.

The Kalplats PGM deposit consists of a package of higher grade reefs separated by lower grade material.  The full package varies in thickness with an average of approximately 50 metres.  The full reef package is divided into a total of 6 individual reefs based on both PGM grade and metal ratios.  The three high grade reefs (MR, LM & UM) with a combined grade and thickness of 8m @ 3.8 g/t Pt+Pd+Au, will be the main focus of resource development and subsequent feasibility studies by PLA.

The high grade MR, LM & UM reefs are noted to be associated with single massive magnetite reefs, with a surrounding lower grade halo. Current modelling is based on a grade rather than a geological cut-off; however PLA believes that the visual identification of these magnetite reefs along with elemental ratios, potentially utilising onsite hand-held XRF (X-Ray Fluorescence)  technology, similar to that used for reef identification at the Panton Project; will lead to in-field identification of the mineralised reefs, and significantly improve geological interpretations and subsequent modeling.

RESOURCE

A SAMREC (South African Mineral Resource Committee) code compliant resource estimate was completed by previous owners over all seven deposits for the full mineralised package.  The table below indicates this global resource, with a break down of the 'Main Reef Package' and the 'High grade Reefs' as indicated.

1) LG Reef, Mid Reef Package and Main Reef package
2) Included UM, Main and LM Reefs
3) Included UM, LM and MR1 Reefs

This resource is based on an estimated 46,000m of RC and Diamond drilling over the full length of the deposit.  The Crater and Orion deposits have been the focus of much of this work, where drill sections are spaced at 25m intervals, while drill spacing in the remaining 5 deposits is between 50 and 200m.  The resource has been estimated to a vertical depth of between 150-200m; with the deepest Main reef intersection at Crater, Orion and Crux of 165m, 190m and 220m respectively.

PROJECT DEVELOPMENT

PLA has completed a low level airborne geophysical survey at 50 metre line spacing on the project in 2006. The results from this work have provided more detailed information on the geology and structure of the project and identified a number of targets outside of the known deposits.

PLA is undertaking an extensive resource development drilling program aimed at raising the status of the currently identified deposits, testing the additional prospects and targets that have been identified by PLA and others and infilling between the know deposits.

The 45,000 metre drilling program commenced in September 2006 following the issue of the Prospecting Right for the project and is expected to be completed by the end of 2007.  The results to date have confirmed the potential of the project and identified new zones of mineralisation outside of the known deposits as well as identifying previously unrecognised wide zones of mineralisation within the known deposits.

The company intends to complete a Bankable Feasibility Study on the project by March 2008 and has appointed GRD Minproc (Pty) Ltd as the Lead Engineer for the study and Snowden Mining Consultants to complete the Resource Estimate.

KALPLATS EXTENDED PROJECT

As part of the Joint Venture PLA and ARMplatinum have applied for a Prospecting Right covering an area approximately 20 kilometres to the north and 18 kilometres to the south of the Kalplats Project area, which was issued in April 2007.  This increases the total strike length held by the parties to almost 50 kilometres.  PLA and ARMplatinum each have a 50 percent contributing interest in the new area and PLA will manage the exploration program which will target extensions of the known Kalplats style of PGM mineralisation.

The first phase of exploration work on this extended area, comprising a detailed aeromagnetic survey over the entire strike length of the extended area was completed in August 2007.  The second phase which involves extensive geochemical sampling is expected to  be completed during early 2008 and this will be followed by drilling of any targets identified during the initial phases of work.