Platinum, it was said long ago, was the preferred treasure of kings and queens. The rarest precious metal in recent decades has had its commercial uses diverge from jewelry, watches and coins into new markets: catalytic converters for automobiles, fuel cells and other industrial uses.

Platinum’s per-ounce price has risen to $1,240 an ounce from $850 or so in October/November. R. Michael Jones, a 45-year-old geological engineer with a Toronto pedigree, started Platinum Group Metals Ltd. (tickers PLG in USA and PTM in Canada) in the year 2000.

Since then, Mr. Jones's Vancouver-based company and its partners have spent about $30 million developing a mining strategy for a platinum resource on South Africa's Western Limb of the Bushveld Complex. Mr. Jones also has a vested interest in MAG Silver Corp. (MVG IN USA and MAG in Canada), a Mexico exploration company that recently received a $180 million takeover offer. Mike Jones is chief executive officer and a director of Platinum Group Metals.

Q: Hey Mike. We have good memories of seeing you four or five years ago, working the conferences and the booths right there with Harmony's Ferdi Dippenaar (now CEO of Great Basin Gold). You have a forthright manner. So, you are ... divvying up your time these days?

R. Michael Jones: Hi to you. Platinum Group Metals is the company I run every day, for sure. But yes, I am also considered a co-founder of MAG Silver Corp. (NYSE:MVG) and of West Timmins Mining Inc. Platinum is my life and has been for almost 10 years now. In South Africa, we have grown our Bushveld venture on the Western Limb to a resource of 10 million ounces. We call that area of the country 'Platinum Island.'

Q: Why's that, Mike? Like the movie ‘Nim's Island?' Plat-Nim’s Island?

Jones: Well, probably 70 percent of the world's platinum production comes from that area. There is that one place in the world that has it, has the platinum, and we have it right there.

Q: We've been there. Lots of platinum. But lots of tribes and poverty, junkyard dogs and dusty plains. So why isn't your stock reflecting the Bushveld’s richness? Or the size of your platinum resource, your grades and the prospect of a mine in the next several years?

Jones: We are shocked and appalled at the marketplace. What can we say? The market has just started recovering for producing companies ... and when we look at our position we think we are extraordinary ... tons, grade and depth. We have a large tonnage deposit near surface and 7.5 grams per tonne platinum. It is very special. You know, everyone out there is mining the same bed sheet of platinum; that is the way it is with a very rare metal.

Q: Right. South Africa, like every nation, has its geopolitical risks, its economic risks and so on. But it is the leader in platinum, no doubt about that. Who else has the goods?

Jones: The Russians have platinum, largely as a byproduct of the Norilsk mine, Norilsk Nickel (world’s largest nickel and palladium producer – MNOD in U.K.). You have platinum in Canada, the Sudbury Basin in Ontario … and in the USA, the Stillwater property (SWC in USA) in Montana, which has palladium and platinum.

Q: And in your neck of the woods, or goods?

Jones: In South Africa, Impala Platinum Ltd. is near us, 20 kilometers away on the Bushveld Complex, and is the second largest platinum producer in the area. Of course, you have Anglo Platinum Group, which is the biggest producer of platinum group metals in the world (2.4 million ounces of refined platinum expected in 2009). Our partners include Anglo Platinum. There are others, but in terms of producers, these are the biggest.

Q: What can you tell us about platinum, Mike, that no one else has before?

Jones: Depends on who you are. About 10 percent of the platinum market is recycled catalytic converters. People ask me all the time about that. What does the platinum do? Is it used up in the process of cleaning automobile exhaust? So, the platinum sits there as a surface for a chemical reaction to occur on. It reminds me of a Mike Myers movie …

Q: Oh sure, all you Canadians stick together, don’t you?

Jones: Really, when Mike Myers’ character Fat Bastard says, ‘Damn sexy!’ It is that damn sexy process the molecules cannot resist. The platinum pulls the carbon monoxide or the sulfur oxide or the nitrous oxide molecule and allows more oxygen into the combustion, oxidizes it all. A lot of applications these days rely on that damn sexy process; fuel cells for instance. This makes platinum an absolute essential metal in our economy. Did you know, jewelry now is only 20 percent of yearly platinum use vs. 40 percent just five years ago. The car industry probably accounts for 50 percent of all platinum use.

Q: Damn sexy, mundo. You know, 20 years ago, you’d be in Beijing or Bombay or even Taipei, and everyone was riding a bicycle. A sight to behold. That is so changing isn’t it?

Jones: The car market is going crazy in India and China. The story for platinum and platinum group metals – for zinc and copper and nickel and stainless steel – is what we can call The Henry Ford Revolution. In North America there are something like 900 cars for every 1,000 people of driving age. That was in a November issue of The Economist. But in India it is something less than 30 vehicles for every 1,000 drivers. In China, fewer than 10 vehicles per 1,000 drivers.

Q: That low? Why is it called the Henry Ford Revolution? Not the Fat Bastard Revolution?

Jones: Ford’s Model-T story back then was that he would make a car that people who worked in factories could buy with their own wages. All these years later, 80, 90 years, the assembly workers in China, in India, in Indonesia, they’re buying cars.

Q: The slum dogs, pardon the cinematic reference, they are buying?

Jones: I would not phrase it that way. Let’s say that now we have expanding mobility of the labor pool. These workers in India, in China, can compare wages at different factories because now they can drive from one to another and look-see for themselves. There is a power that comes with mobility.

Q: Wait until Africa kicks in. Tell us about the financial side of platinum. Platinum as money. It is similar to silver in that it has so much industrial use. Yet we see it used in coinage. One could see its becoming a monetary standard for the jet set as investment demand rises?

Jones: There is a new exchange traded fund for platinum pending approval in the USA – from ETF Securities. It will be like the PHPT ETF that trades in the U.K. (ETF Securities also has a palladium fund, PHPD, trading in London.) So consider: the gold market is 80 million ounces a year of use and supply and the platinum market is 7 million ounces of use and supply. An ETF can have quite an impact here as investors regard platinum as a monetary asset.

Q: Sounds … good … as long as the bank really has the metal in storage. How much platinum do the ETFs represent?

Jones: There is one in Zurich as well (run by Zurich Cantonal Bank – ZPLA in Switzerland). Together, the two have about 500,000 ounces. (Holdings for the two platinum ETFs are rising in double-digit percentages: see related article.)

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