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Eastern Platinum Limited (JSE:EPS) News - Click below to view full PDF article
https://senspdf.jse.co.za/documents/2022/jse/isse/eps/Q222.pdf
Results for the Second Quarter of 2022
EASTERN PLATINUM LIMITED
(Incorporated in Canada)
(Canadian Registration number BC0722783)
(South African Registration number 2007/006318/10)
Share Code TSX: ELR ISIN: CA2768555096
Share Code JSE: EPS ISIN: CA2768555096
(“Eastplats” or the “Company”)
August 15, 2022
Trading Symbol: ELR (TSX); EPS (JSE)
NEWS RELEASE
EASTERN PLATINUM LIMITED REPORTS RESULTS FOR THE SECOND QUARTER OF
2022
August 15, 2022, Vancouver, British Columbia – Eastern Platinum Limited (“Eastplats” or the
“Company”) is pleased to report that it has filed its condensed interim consolidated financial
statements for the three and six months ended June 30, 2022 and the corresponding
management’s discussion and analysis. Below is a summary of the Company’s financial results
for the second quarter of 2022 (“Q2 2022”) and for the six months ended June 30, 2022 (“YTD
2022”) (all amounts in USD unless specified) in comparison to the same respective period in 2021
(“Q2 2021” and “YTD 2021”, respectively):
• Revenue for Q2 2022 increased to $20.5 million (Q2 2021 - $20.0 million), representing a
2.5% increase. Revenue for YTD 2022 increased to $37.9 million (YTD 2021 - $36.7
million), representing a 3.4% increase.
• Mine operating income increased by $0.9 million (or 25.2%) to $4.2 million in Q2 2022 (Q2
2021 - $3.3 million), resulting in an improved gross margin of 20.3% in Q2 2022 from
16.6% in Q2 2021. Mine operating income in YTD 2022 increased by $2.8 million (or
59.1%) to $7.6 million (YTD 2021 - $4.8 million), resulting in an improved gross margin of
19.9% in YTD 2022 from 13.0% in YTD 2021.
• Operating income was $0.9 million in Q2 2022 compared to $0.7 million in Q2 2021.
Operating income improved by $2.0 million to $1.0 million in YTD 2022 from an operating
loss of $1.0 million in YTD 2021.
• Net income attributable to equity shareholders was $1.2 million ($0.01 earnings per share)
in Q2 2022 versus net income attributable to equity shareholders of $4.1 million ($0.03
earnings per share) in Q2 2021. The Q2 2022 net income was largely attributable to
income tax recoveries in the quarter, while in Q2 2021, the Company received legal
settlement income of $3.3 million to settle and dismiss certain outstanding lawsuits.
• Net income attributable to equity shareholders increased to $4.2 million ($0.03 earnings
per share) in YTD 2022 compared to net income attributable to equity shareholders of
$3.3 million ($0.02 earnings per share) in YTD 2021. The improvement during YTD 2022
is mainly attributable to the increased revenue and positive gross margins generated by
remining and processing the Company’s tailings resources at the Crocodile River Mine
(“CRM”) to produce chrome concentrate and platinum group metals (“PGM”) concentrate,
respectively, and income tax recoveries as mentioned above in Q2 2022. Also mentioned
above, the Company received legal settlement income of $3.3 million in YTD 2021, which
did not occur in YTD 2022.
• The Company had positive working capital (current assets less current liabilities) of $16.1
million as at June 30, 2022 (December 31, 2021 - $14.6 million) and short-term cash
resources of $6.4 million (consisting of cash, cash equivalents and short-term
investments) (December 31, 2021 - $6.1 million).
Operations
The Company continues its Retreatment Project at Barplats Mines (Pty) Limited’s tailings facility
(the “Retreatment Project”) located at the CRM in South Africa.
Summary of chrome production for the three and six months ended June 30, 2022 and 2021:
Q2 2022 Q2 2021 YTD 2022 YTD 2021
Total Tailings Feed (Tons) 664,721 660,566 1,238,973 1,268,172
Average grade Cr
38.7% 38.5% 38.8% 38.5%
concentrate
Tons of Cr concentrate 169,839 223,487 290,961 427,389
The majority of the Company’s revenue (approximately 84% for Q2 2022) is generated from the
offtake agreement with Union Goal Offshore Solution Limited (“Union Goal”) in relation to
chrome concentrate production from the Retreatment Project. The remaining amount of the
Company’s revenue was from PGM concentrate sales to Impala Platinum Limited (“Impala”).
The Company is currently owed approximately $17.0 million from Union Goal in accounts
receivable from processing and dispatching chrome concentrate in addition to $6.0 million for
chrome concentrate not yet invoiced as of the date of this news release. Payments against the
outstanding receivable from Union Goal have been slow despite repeated requests for a payment
plan. Management is in the process of evaluating and communicating with Union Goal to
determine an agreeable outcome. A default on the receivable or lack of payment from Union Goal
could have a significant impact not only on the instrument credit risk adjustments recorded to date
but on the Company’s liquidity as a whole. Further delays in payment may require the Company
to re-evaluate the fair value of the contract payable, re-evaluate the value of the contracts to the
parties, and could lead to a renegotiation/change of the Union Goal contracts, including target
completion dates for the optimization program. The Company still expects to receive all monies
owed to it and will pursue all commercial options available to it to collect these amounts. The
Company will continue to keep the shareholders informed of these risks and the Company’s
chosen course of action in due course.
The PGM Circuit D and PGM Main Circuit B (collectively, the “PGM Circuits”) continue to drive
revenue growth and gross margin improvement for the Company.
Summary of PGM production for the three and six months ended June 30, 2022 and 2021:
Q2 2022 Q2 2021 YTD 2022 YTD 2021
Tons of PGM
1,868 539 2,747 582
concentrate
PGM ounces produced
2,561 1,112 3,924 1,217
(6E)*
*PGM 6E ounces are estimates until final exchanges and umpire results have been concluded,
which can take up to three months.
Wanjin Yang, Chief Executive Officer and President commented, “The Q2 financial results have
shown the Company is on the right path to continue its revenue growth and profitability
improvements from the Retreatment Project and capacity increases from the PGM circuits. We
are also focused on achieving a commercial result to reduce Union Goal’s outstanding
receivables.”
Outlook
The Company’s targets for 2022 are as follows:
• Operate and optimize the Retreatment Project and maximize returns (ongoing)
o Completion of the Optimization Program for the Retreatment Project (ongoing)
o Assess the value for continued use of the chrome recovery plant after optimization
(ongoing)
• Operate and optimize the PGM Circuits (ongoing);
• Complete an updated independent technical report on the CRM (completed);
• Raise capital to restart Zandfontein underground operations at the CRM (ongoing);
• Complete the second phase of the tailings storage facility (“TSF”) capital works program
(ongoing);
• Advance the Mareesburg project environmental work to complete the legal analysis on the
Environmental Impact Assessment (“EIA”) and other environmental studies and
amendments (ongoing);
• Continue prospecting and assessment work in relation to Zandfontein, Crocette and
Spitzkop ore bodies (ongoing);
• Complete EIA and assessment work regarding a vertical furnace and pelletizer of chrome
concentrate (ongoing); and
• Update other capital assessments upon completion of capital fundraising.
The Company has a primary listing on the Toronto Stock Exchange and a secondary listing on
the JSE Limited.
The Company has filed the following documents, under the Company’s profile on SEDAR at
www.sedar.com:
• Condensed interim consolidated financial statements for the three and six months ended
June 30, 2022; and
• Management’s discussion and analysis for the three and six months ended June 30, 2022.
The condensed interim consolidated financial statements for the three and six months ended June
30, 2022 are available for download at Quarterly reports Archives | Eastplats and are also
available on the JSE’s website at:
https://senspdf.jse.co.za/documents/2022/JSE/ISSE/EPS/Q222.pdf.
Covid-19
The Government of South Africa lifted the National State of Disaster in response to the COVID-
19 pandemic on April 5, 2022. The Company continues to follow the health guidelines of the
Government of South Africa. The chrome and PGM production and delivery remains in full
operation. The effects of COVID-19 are uncertain and the consequences of a further temporary
shutdown of any operations or other related issues cannot be reasonably estimated at this time,
but could potentially have material adverse effects on the Company’s business, operations,
liquidity and cashflows.
About Eastern Platinum Limited
Eastplats owns directly and indirectly a number of PGM and chrome assets in the Republic of
South Africa. All of the Company’s properties are situated on the western and eastern limbs of
the Bushveld Complex, the geological environment that hosts approximately 80% of the world’s
PGM-bearing ore.
Operations at the Crocodile River Mine currently include re-mining and processing its tailings
resource to produce PGM and chrome concentrates from the Barplats Zandfontein tailings dam.
For further information, please contact:
EASTERN PLATINUM LIMITED
Wylie Hui, Chief Financial Officer and Corporate Secretary
whui@eastplats.com (email)
(604) 800-8200 (phone)
Cautionary Statement Regarding Forward-Looking Information
This news release contains “forward-looking statements” or “forward-looking information”
(collectively referred to herein as “forward-looking statements”) within the meaning of
applicable securities legislation. Such forward-looking statements include, without limitation,
forecasts, estimates, expectations and objectives for future operations that are subject to a
number of assumptions, risks and uncertainties, many of which are beyond the control of the
Company. Forward-looking statements are statements that are not historical facts and are
generally, but not always, identified by the words “will”, “plan”, “intends”, “may”, “could”, “expects”,
“anticipates” and similar expressions. Further disclosure of the risks and uncertainties facing the
Company and other forward-looking statements are discussed in the Company’s most recent
Annual Information Form available under the Company’s profile on www.sedar.com.
In particular, this news release contains, without limitation, forward-looking statements pertaining
to: profitability; revenue growth and gross margin improvements derived from the PGM Circuits;
the successful pursuit of all commercial options and agreeable outcome regarding the Union Goal
outstanding accounts receivable; the Company’s targets for 2022 including optimization of the
Retreatment Project operations; completion of the Optimization Program for the Retreatment
Project, assessment of the value of the chrome recovery plant; operations and optimization of the
PGM Circuits; completion of an updated technical report on the CRM; capital raise to restart
Zandfontein underground operations at the Crocodile River mine; completion of the second
phase of the TSF capital works program; Mareesburg project environmental work to complete the
legal analysis on the EIA and other environmental studies and amendments; prospecting and
assessment work in relation to Zandfontein, Crocette and Spitzkop ore bodies; EIA and
assessment work regarding a vertical furnace and pelletizer of chrome concentrate; the update
of other capital assessments upon completion of capital fundraising; care and maintenance with
respect to the underground portion of the CRM; and the potential effects of COVID-19 and any
future measures taken by the Government of South Africa and their impact on the Company and
its business, operations, liquidity and cashflows. These forward-looking statements are based on
assumptions made by and information currently available to the Company. Although
management considers these assumptions to be reasonable based on information currently
available to it, they may prove to be incorrect. By their very nature, forward-looking statements
involve inherent risks and uncertainties and readers are cautioned not to place undue reliance on
these statements as a number of factors could cause actual results to differ materially from the
beliefs, plans, objectives, expectations, estimates and intentions expressed in such forward-
looking statements. These factors include, but are not limited to, unanticipated problems that may
arise in the Company’s production processes, commodity prices, lower than expected grades and
quantities of resources, need for additional funding and availability of such additional funding on
acceptable terms, economic conditions, currency fluctuations, competition and regulations, legal
proceedings and risks related to operations in foreign countries.
All forward-looking statements in this news release are expressly qualified in their entirety by this
cautionary statement, the “Cautionary Statement on Forward-Looking Information” section
contained in the Company’s most recent Management’s Discussion and Analysis available under
the Company’s profile on www.sedar.com. The forward-looking statements in this news release
are made as of the date they are given and, except as required by applicable securities laws, the
Company disclaims any intention or obligation, and does not undertake, to update or revise any
forward-looking statements, whether as a result of new information, future events or otherwise.
No stock exchange, securities commission or other regulatory authority has approved or
disapproved the information contained herein.
JSE Sponsor
PSG Capital
Date: 15-08-2022 12:00:00
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