The Smokey Hills Project is located on the eastern limb of the Bushveld Complex in the Limpopo Province, 300 kilometres north of Johannesburg.

PLA commenced a resource definition drilling program on the project in July 2005 and a BFS with GRD Minproc as the Lead Engineer in October 2005.  The results of the BFS showed the Project to be extremely attractive and very robust and able to generate returns of over 70% of the Base Case assumptions and in excess of 600% using July 2006 metal prices and exchange rate.

A full summary of the results are provided in Table 1 below and the underlying assumption relating to metal prices and exchange rates are provided in Table 2.



The Company envisages commencing operations at Smokey Hills initially as an open cut and then progressing to a shallow underground mine.  During the initial phase while the plant is under construction PLA proposes to mine ore for toll treatment through a nearby plant to generate early cash flow.  This phase would last for a maximum of 6 months after which ore would be treated through the on-site plant at a rate of 720,000 tonnes per annum, producing approximately 95,000 ozs 4E PGM (Platinum + Palladium + Rhodium + Gold) in a flotation concentrate.  The concentrate will be toll treated or sold to anyone of a number of smelters in South Africa, the nearest of which is less than 100 kilometres distance.

PLA signed a formal Sale Agreement with Smokey Hills Platinum (Pty) Ltd ("SHP") to acquire up to 80% of the Project through the staged acquisition of 100% of SHP in May 2004, with the balance being held 5% by the local community and 15% by Corridor Mining Resources, a company owned by the Limpopo Provincial Government.  This acquisition was completed in January 2007.

In order to comply with South Africa BEE legislation, PLA is selling up to 21% of its interest in the project to a BEE consortium.  This sale is based on the Base Case valuation of the project from the BFS and is vendor financed.  In addition any cash flow from the project from metal prices or exchange rate above the Base Case (Pt - $900, Pd - $300, RH - $1500, Au - $450 and ZAR : US$7:1) is split 65% to PLA and 35% to BEE consortium.  The consortium is also required to contribute accordingly to equity to the capital cost, but this will also be financed by PLA.  The net effect is that PLA will receive 80% of profits from the project for the first 3 to 4 years of the project, reducing to 60% of profits up to Base Case plus 65% of the above Base Case.  This will provide the Company with approximately 75% of the profits over the life of the project.

GEOLOGY and MINERALISATION

Smokey Hills is situated in the Critical Zone of the Eastern Limb of the Bushveld Igneous Complex (BIC), Figure 1. The Critical Zone is divided into Upper and Lower Sub zones; with the Upper Critical Zone comprising mainly norite, gabbronorite, anorthosite, and pyroxenite lithgologies, hosting a series of Chromitite Reefs. In total there are three groups of chromitite reefs: the Upper Group (UG); the middle group (MG) and the Lower Group (LG). The UG chromitite reefs are the major source of PGM within the chromitite reefs of the BIC; while the LG and MG reefs are exploited for their Chromium content.

The Upper chromitite group (UG) consists of four cyclic units (UG1, UG2, UG3 and UG3A) with the chromitite layers generally forming the base of each cycle with overlying melanorite to leuconorite and "stringer" leader chromitite layers and anorthosite marker units. Within the Upper Group, the UG2 reef is the major economic PGM source.

Variation in both grade and reef thickness is mapped across the extent of the BIC, ranging from 3.5 g/t to 19.16 g/t in grade and from approximately 0.5m to 1.5m in thickness. Generally, grade and thickness have an inverse relationship, with grade decreasing where the reef thickness increases.
 
A resource estimate for the project was completed in July 2006 by Snowden Mining Consultants.  The estimate was based on results from a total of 68 diamond drill holes, sampling of the outcrop, adit and surface box cuts, detailed aeromagnetic survey interpretation plus geological mapping and interpretation.

The total UG2 Mineral Resource estimated for the Smokey Hills Project is 5.5 Mt at a grade of 5.60 g/t 4E PGM or 5.5 Mt at a grade of 6.0 g/t 6E PGM.  The Mineral Resource is not reported above a cut off grade and has been classified as Measured and Indicated Resources and reported in Table 1 using the guidelines of the JORC code (2004).

# 1   The UG2 Reef, as defined for this resource estimate, comprises the UG2 Chromite Layer, a 15 cm Footwall Cut and a Hangingwall Cut to the L2 parting.

# 2   All tabulated data has been rounded to one decimal place for tonnage and two decimal places for grades.

# 3   After interpreted geological losses of 21% have been removed. Geological losses include potholes, dykes, faults, rolling reefs and Iron Rich Ultramafic Pegmatite.

PROJECT DEVELOPMENT

The Company envisages commencing operations at Smokey Hills initially as an open cut and then progressing to a shallow underground mine.  PLA commenced ordering long lead items such as the mills, switchgear and transformers in January 2007 and awarded the EPCM contract for the construction of the processign plant and related infrastructure to GRD Minproc (Pty) Ltd in July 2007.

During the initial phase while the plant is under construction PLA proposes to mine ore for toll treatment through a nearby plant to generate early cash flow.  This phase would last for a maximum of six months after which ore would be treated through the on-site plant at a rate of 720,000 tonnes per annum, producing approximately 95,000 ozs 4E PGM (Platinum + Palladium + Rhodium + Gold) in a flotation concentrate.  The concentrate will be toll treated or sold to anyone of a number of smelters in South Africa, the nearest of which is less than 100 kilometres distance.

The total capital cost for the development of the project is estimated at approximately ZAR300 million of which ZAR256 million will be provided as debt finance by Standard Bank of South Africa Ltd.

The commencement of on site construction and mining activities is awaiting the issue of a Mining Right for the Project.  It is envisaged that the plant will be commissioned during the June quarter 2008.

Process Flow Chart