Trading Symbol: ELR (TSX); EPS (JSE)
/NOT FOR DISSEMINATION IN THE UNITED STATES OR THROUGH U.S. NEWSWIRE
SERVICES/
VANCOUVER, March 27, 2020 /CNW/ - Eastern Platinum
Limited ("Eastplats" or the "Company") is pleased to
report that it has filed its Audited Consolidated Financial
Statements for the years ending December 31,
2019 and 2018 and the corresponding Management's Discussion
and Analysis and Annual Information Form. Below is a summary of the
Company's financial results and highlights for the year ended
December 31, 2019 (all amounts in
USD):
- Revenue for the year ended December 31,
2019 was $39.2 million
compared to $0.4 million in the prior
year due to a full year of operating results from the Retreatment
Project (as defined below);
- Net income to equity shareholders of $0.1 million (earnings of $0.00 per share) for the year ended December 31, 2019 versus a loss of $21.8 million (loss of $0.24 per share) the prior year; and
- Positive working capital (excluding non-cash deferred revenue)
of $9.7 million as at December 31, 2019.
Operations of the Retreatment Project
As previously disclosed, on March 1,
2018, the Company entered into an agreement (the
"Framework Agreement") with Union Goal Offshore Solution
Limited ("Union Goal") relating to the construction,
re-mining and processing of the tailing resource and offtake of
chrome concentrate from Barplats Mines (Pty) Limited tailings
facility (the "Retreatment Project") located at the
Company's Crocodile River Mine in South
Africa ("CRM").
The Retreatment Project produces revenue based on tons of
material made available for processing by re-mining the tailings,
recovery of certain operational costs and allocation of the upfront
cash payment from Union Goal for the offtake of chrome
concentrate.
The Company and Union Goal are currently negotiating and working
to finalize and update the Framework Agreement in several areas
after one year of operations. Once concluded the Company will
provide a detailed update.
A summary of production to the end of December 2019:
Average grade Cr
concentrate
|
Tons of Cr
concentrate
|
38.6
|
5981.034
|
In February 2020, with the goal to
further optimize and increase the chrome recovery of the
Retreatment Project, Eastplats began the Optimization Project which
will invest approximately ZAR90
million (US$6 million) in
additional equipment, including installation, to enhance the
efficiency of the plant and its processing which is designed to
provide increased chrome recovery and grade. The financing of these
costs has been agreed to in principal with Union Goal on similar
loan terms to those contained in the Framework Agreement. As
mentioned, the Company and Union Goal are working on updating and
finalizing this as soon as reasonably possible.
The Company had also mobilized a portion of the required
construction team at CRM and has begun the construction work at
site including infrastructure and civil works in relation to the
chrome plant optimization as announced previously.
Platinum Group Metals ("PGM")
During Q4 2019, Eastplats made the decision to
refurbish the small-scale PGM circuit D (previously the
scavenger plant circuit) ("PGM Scavenger Circuit") and in
2020 has successfully produced PGM concentrate. The Company
had forecasted a ramping up of production in Q2 2020, but it will
need to re-assess at the end of the temporary lockdown in
South Africa, discussed below.
Outlook
The year ended December 31, 2019
was a full year operation and revenue generation at the Retreatment
Project. In 2020, the Company approved an optimization project
designed to enhance Chrome production for the Retreatment Project
and also commissioned a PGM scavenger plant utilizing as it input
feed, a portion of the disposition material from the Chrome
operation. The Company will update its forecast for the year
following the temporary lockdown in South
Africa and the completion of the Optimization Project.
The Company's targets for 2020, subject to capital availability
include:
- Completion of the optimization project for the Retreatment
Project;
- Maximize operating results of the Retreatment Project;
- Establishment of the appropriate Tailings storage facility
phase II capital works program;
- Commissioning and operation of the PGM scavenger plant;
- Assessment and decision regarding the larger scale PGM
production for the tailings resource;
- Assessment of the CRM Zandfontein underground operations;
- Ensure appropriate care and maintenance on all resource
properties; and
- Assessment and decision regarding Mareesburg project.
Care and maintenance with respect to the underground portion of
the CRM will continue while the Company assesses the underground
resource. Care and maintenance will also continue for the Company's
Eastern Limb Projects for 2020. The Company is actively looking at
opportunities for its other assets including continuing to explore
options to utilize or monetize these assets.
Diana Hu, CEO of Eastern Platinum
commented, "Eastplats is excited to have created a new operating
and cash-flow positive venture in the Retreatment Project and seeks
to target additional shareholder value in achieving the Company's
2020 objectives."
COVID-19 ("Coronavirus")
As reported in our news release on March
25, 2020, the President of South
Africa, Mr. Cyril Ramaphosa, has imposed a nation-wide
twenty-one (21) day lockdown to fight the Coronavirus outbreak. The
lockdown began at midnight on March 26 in South Africa and is scheduled to end at
midnight on April 16, 2020. As a
result, the Company has temporarily closed all operations in
South Africa including re-mining
operations at CRM, except for some critical underground care and
maintenance activities where the Company obtained an exception.
The effects of the Coronavirus are changing rapidly and with the
temporary shutdown of the CRM, the Company cannot reasonably
estimate at this time the outcome of this lockdown but it could
have material adverse effects on the Company's business, liquidity,
cashflows, and the Company's 2020 outlook and its ability to attain
targets.
Annual filings
The Company has filed the following documents, under the
Company's profile on SEDAR at www.sedar.com:
- Audited consolidated financial statements for the year ended
December 31, 2019 and 2018;
- Management's discussion and analysis for the year ended
December 31, 2019 and 2018; and
- Annual Information Form at December 31,
2019.
Cautionary Statement Regarding Forward-Looking
Information
This press 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", "will", "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 press release contains, without limitation,
forward-looking statements pertaining to: forecast of operational
activity of the Retreatment Project, the Company's ability to
obtain financing for or complete the Optimization Project, achieve
operational capacity at the Retreatment Project during 2020,
ability to forecasted cashflows of the Retreatment Project and for
the Company, the Company's ability to test and assess PGM recovery
opportunities in connection with the Retreatment Project; the
effects of the Coronavirus and its effects on our operations; the
Company's ability to assess and make decisions with respect to
monetizing its other assets; the continuation of care and
maintenance with respect to the underground portion of the CRM and
the Company's Eastern Limb Projects; and the production ramp up at
the PGM Scavenger Circuit; and the Company's ability to meet any of
its targets for 2020. 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 our
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 press 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 press
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.
SOURCE Eastern Platinum Limited