The 29-year-old remains on course for a wire-to-wire victory at Dom Pedro Victoria Golf Course after carding a spectacular eagle, eight birdies and one bogey on Saturday to get to 22 under par - his best 54-hole total on the DP World Tour.
Smith carded a 62 for the second time this week, having also achieved the feat on Thursday, and looked on course to go even lower before a closing bogey meant he had to settle for just a two-shot buffer.
His nearest challenger was fellow halfway co-leader Gavin Green, who managed to prevent the in-form Englishman from running away with things as he made an eagle, six birdies and a solitary bogey in his 64.
Green was then three clear of third-placed Sebastian Heisele, who is preparing to play his last round on Sunday ahead of his retirement from playing.
Smith made a hat-trick of birdies at the second, third and fourth before taking advantage of the par-three eighth to lead by two at the turn.
After making further gains on the 11th, 12th and 14th, Smith chipped in from the rough at the 15th for an eagle to move to 22 under.
A birdie on the 17th briefly moved Smith to 23 under before he bogeyed the last after sending his tee-shot into a fairway bunker.
He said: "I'm close to my best.
"If (the win) happens, then brilliant, it's the cherry on the cake this year. If it doesn't then there's going to be another week when it might happen.
"I'm just going to go out there and play the attacking golf that I've done the last three days, hitting driver everywhere and taking advantage of the soft greens.
"If it happens, it happens."