Platinum Australia Limited : Smokey Hills Production Update

ASX Release 26 March 2012 SMOKEY HILLS PRODUCTION UPDATE

Platinum Australia Limited (ASX:PLA) is pleased to provide an update on the progress made since initiating the transition from contract mining to Owner Operator in January.
PhokaThaba Platinum ("PTP"), the PLA subsidiary which owns the Smokey Hills Mine, took over day to day management of the mining operation and associated activities effective 16 January. As part of the move to Owner Operator, PTP was required to offer employment to all of the employees of the mining contractor who wished to continue working at the mine. The process of transferring the ex-employees of the contractor was largely completed between February and mid-March.
Since the changeover to Owner Operator on 16 January significant improvements in almost all areas of production have been recorded. The table below summarises some of the key average daily production statistics achieved from the beginning of January through until the 23rd March.

Table 1 Production Statistics

	January 1 - 152	January 16 - 31	February	March 1 - 13	March 14 - 233
Average Stope Metres Broken/day1 Average Tonnes Broken/day1 Average Tonnes Trammed/day1	185 1,226 1,094	230 1,677 1,352	216 1,237 1,487	204 1,290 1,235	290 2,040 1,890

1 - The underground mining operation operates on an 11 day fortnight, with an average of 23 production days per month allowing for Public Holidays.

2 - Underground mining operations carried out by Contractor during first two weeks of January.

3 - Based on daily figures, subject to final survey.

The period of 1 - 15 January was under the management of the contractor, while the 16 - 31 January was the first period under the management of PTP, and as can be seen, there was a significant improvement in all key areas of production.
During February and the first half of March the transfer of employees from the mining contractor to PTP was occurring and some disruption in operations occurred. Despite this, production was still above that achieved by the contractor during the first half of January with no increase in mining dilution.
As a result of the decision by PTP to take over as Owner Operator, a total of 852 employees elected to transfer over to PTP, including almost 100 senior, supervisory and management personnel. Over the last month there have been some 30 terminations, including 8 at the senior, supervisory and management level. A total of 9 new employees have been recruited, all at the supervisory management level. The current levels of production are therefore being achieved with less labour

Platinum Australia Limited

Level 3, 18 Richardson Street West Perth Western Australia 6005 Australia

T: + 61 8 9324 1494 F: + 61 8 9226 4259 E: [e-mail] W: www.platinumaus.com.au

One of the main areas which has proved challenging has been in tramming ore from underground to the plant due to poor equipment availability resulting from inadequate maintenance by the contractor during previous months. . A program of work to correct this was initiated in January and a significant improvement is already evident with average tonnes trammed per day over the last two weeks up over 60% from that achieved by the contractor in the first half of January.
Underground production over the last week has exceeded production ramp-up budget level (80% of full production) and the Company expects production performance to continue to improve over the next quarter as the systems and procedures covering key areas such as training, management, personnel, planning and maintenance which have been introduced as part of the transition to Owner Operator become fully established.
PLATINUM AUSTRALIA LIMITED
JOHN D LEWINS

Managing Director Media enquiries UK:

Adam Reynolds/Guy McDougall

Newgate Threadneedle

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www.newgatethreadneedle.com

Media enquiries Australia:

John Lewins

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M: [phone]

Platinum Australia Limited

Level 3, 18 Richardson Street West Perth Western Australia 6005 Australia

T: + 61 8 9324 1494 F: + 61 8 9226 4259 E: [e-mail] W: www.platinumaus.com.au