• Company’s Third In Rank Project To Be Stand Alone Development

• Highest Grade And Largest PGM Resource In Australia

• Need For Sally Malay Mill Modifications And Lack Of Spare Treatment Capacity From Mid-2008 Account For That Company’s Withdrawal

Platinum Australia Limited (AIM: PLAA; ASX: PLA) said Tuesday it has revised proposals for developing its Panton PGM project in the Kimberley region of Western Australia and commenced an updated feasibility study which will focus on a stand alone operation comprising an on-site treatment plant and open pit mine.

Panton is the company’s third in line PGM project after its two South African projects at Kalplats and Smokey Hills. The proposed open pit operation would have an initial four year life, producing 35,000oz-40,000oz of PGMs annually, with the potential to continue thereafter as an underground mine. The feasibility study is due for completion in mid-2008, says PLA.

The decision follows discussions with Sally Malay Mining (ASX: SMY) which resulted in that company withdrawing from a letter of agreement with PLA under which SMY had a right to earn a 50p.c. interest in the first 1.5m tonnes of ore extracted from the Panton project located only 60km away. Sally Malay’s interest would have accounted for 7.5p.c. of the Panton deposit.

Commenting today, PLA managing director Mr John Lewins said the SMY agreement was based on treating Panton ore over a 5-6 year period through the Sally Malay plant which, at the time the agreement was reached, had spare treatment capacity. “However, the success of SMY in its on-site and regional exploration has effectively removed this option as the Sally Malay mill will now be fully utilised from mid-2008. In addition, it has become clear that the mill would require significant modifications to enable it to treat Panton ore. Effectively this removes much of the capital cost benefit of this option.

“Panton comprises the highest grade and largest PGM resource in Australia, with an in-ground value in excess of A$2bn at current metal prices. We believe that a stand-alone operation, initially as an open pit but with the potential to continue as a long-life underground mine, provides the best possible opportunity to unlock this value.”

Panton is PLA’s third PGM project after Smokey Hills (80p.c. owned), now being developed as a 95,000oz/y open pit/shallow underground operation on the eastern rim of the Bushveld Complex, and the much larger Kalplats project (49p.c. owned), 330km west of Johannesburg, where ongoing resource definition drilling as part of the bankable feasibility study suggests potential for a 200,000oz-300,000oz/y open pit project that might subsequently move underground.

The Panton Project

Located 60km north of Halls Creek in the Kimberley region of WA, Panton contains a resource of 14.3m tonnes grading 5.2g/t 7E PGM* (2.4m oz contained), including a high-grade resource of 10.1m tonnes at 6.1g/t 7E PGM.

The company completed a detailed feasibility study on Panton in August 2003 which found it to be a technically feasible project but not commercially viable at the prevailing metal prices and US$ exchange rate. Since that study was completed, however, metal prices have more than doubled (including byproduct nickel and copper), significantly enhancing the potential of the project.

* Platinum, palladium, rhodium, ruthenium, iridium, osmium and gold – Press Release