Eastern Platinum Limited Reports Annual Financial Results for 2022 and Provides Its Targets for 2023
Eastern Platinum Limited Reports Annual
Financial Results for 2022 and Provides Its
Targets for 2023
Vancouver, British Columbia--(Newsfile Corp. - April 5, 2023) - Eastern Platinum Limited (TSX: ELR)
(JSE: EPS) ("
Eastplats
" or the "
Company
") is pleased to report that it has filed its Audited
Consolidated Financial Statements for the fiscal year ended December 31, 2022 and the corresponding
Management's Discussion and Analysis and Annual Information Form. Below is a summary of the
Company's financial results for the fourth quarter of 2022 ("
Q4 2022
") and for the fiscal year ended
December 31, 2022 ("
FY2022
") (all amounts in USD unless specified) in comparison to the same
respective periods in 2021 ("
Q4 2021
" and "
FY2021
", respectively):
Revenue for Q4 2022 decreased to $8.3 million (Q4 2021 - $15.6 million), representing a 46.8%
decrease. Revenue for FY2022 decreased to $49.8 million (FY2021 - $68.2 million), representing
a 27.0% decrease.
Mine operating income decreased by $6.5 million to a mine operating loss of -$3.5 million in Q4
2022 (Q4 2021 mine operating income - $3.0 million), resulting in a gross margin of -42.1% in Q4
2022 as compared to 19.1% in Q4 2021. Mine operating income in FY2022 decreased by $3.7
million to $5.9 million (FY2021 - $9.6 million), resulting in a gross margin of 11.9% in FY2022 as
compared to 14.1% in FY2021.
Operating loss was -$6.5 million in Q4 2022 compared to an operating income of $0.2 million in
Q4 2021. Operating loss increased by $3.3 million to -$4.6 million in FY2022 from -$1.3 million in
FY2021, a 253.8% increase in operating loss.
Net loss attributable to shareholders was -$0.3 million ($0.00 loss per share) in Q4 2022 versus a
net loss attributable to shareholders of -$1.9 million ($0.01 loss per share) in Q4 2021. The Q4
2022 net loss was largely attributable to the decrease in mine operating income offset by Other
income of $6.5 million, which largely relates to the change in value of the Company's loans
payable. The Company also recognized a significant foreign exchange gain in the quarter of $1.1
million as the South African Rand strengthened against the US Dollar, while in Q4 2021, the
Company recorded a foreign exchange loss due to the depreciation of the South African Rand to
the US Dollar of $1.9 million in the period.
Net loss attributable to shareholders increased to -$2.6 million ($0.02 loss per share) in FY2022
compared to a net loss attributable to shareholders of -$1.2 million ($0.01 loss per share) in
FY2021. The increase in loss during FY2022 is mainly attributable to the reduced revenue and
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 finance costs of $5.6 million, which relates to the change in value of
the Company's loans payable offset by Other income of $7.4 million.
The Company had a working capital deficit (current assets less current liabilities) of $39.5 million
as at December 31, 2022 (December 31, 2021 - working capital of $14.6 million).
Operations
The Company generated revenue from processing PGM and chrome concentrates during Q4 2022 and
FY2022. Eastplats' majority of revenue (approximately 68% and 75% for Q4 2022 and FY2022,
respectively) is from chrome concentrate sales. Until July of 2022, this revenue was based on the Union
Goal offtake agreement (the "
Union Goal Offtake Agreement
") entered into between the Company's
subsidiary Barplats Mines (Pty) Limited ("
Barplats
") and Union Goal Offshore Solution Limited ("
Union
Goal
") in relation to chrome concentrate production from the Retreatment Project. Previously, and until
the end of the second quarter, the Retreatment Project produces revenue based on tons of material
made available for processing by remining and processing the tailings, recovery of certain operational
costs and allocation of the upfront cash payment for the offtake of chrome concentrate to Union Goal.
Additional non-cash deferred revenue was recognized based on tons made available for processing
from the discounting of the chrome equipment debt and the construction loan based on an effective
discount rate. Although the Union Goal Offtake Agreement remains in place, Union Goal stopped taking
shipments of chrome concentrate in June 2022. Chrome revenue after this point has been generated
only through third-party sales of chrome concentrate. The Company also derives PGM revenue under a
PGM offtake agreement with Impala Platinum Limited ("
Impala
") from further processing of tailings
materials following the production of chrome concentrates. The Company continues its Retreatment
Project at Barplats' tailings storage facility located at the CRM in South Africa.
Summary of chrome production for the three months and year ended December 31, 2022 and 2021:
Q4 2022
Q4 2021
FY2022
FY2021
Total Tailings Feed (Tons)
655,011
597,814
2,548,785
2,504,777
Average grade Cr concentrate
38.64%
39.29%
38.73%
38.71%
Tons of Cr concentrate
156,738
149,943
602,111
773,273
Summary of PGM production for the three months and year ended December 31, 2022 and 2021:
Q4 2022
Q4 2021
FY2022
FY2021
Tons of PGM concentrate(dry)
1,337
905
5,616
1,853
PGM ounces produced (6E)*
2,161
1,381
8,670
3,253
*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 of Eastplats, commented, "We continue to focus our
efforts to restart Zandfontein underground operations at the Crocodile River Mine and are encouraged
by the results of our chrome and PGM businesses. As disclosed recently, we are raising funds to restart
the Zandfontein underground operations at the Crocodile River Mine through a rights offering."
Outlook
The Company's targets for 2023 are as follows:
Operate and optimize the PGM circuits (ongoing);
Raise capital to restart Zandfontein underground operations at the CRM (ongoing);
Operate and optimize the Retreatment Project and maximize returns (ongoing);
Completion of the Optimization Program for the Retreatment Project (ongoing);
Assess the value for continued use of the chrome recovery plant after optimization (initiated);
Completion of 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);
Commission Main Plant Circuit A for underground operations; and
Update other capital assessments upon completion of capital fundraising.
Care and maintenance with respect to the underground portion of the CRM will continue while the
Company raises funds for the underground operations restart. Eastplats completed a life-of-mine study
and underground mine design for Zandfontein and the Board of Directors supported carrying out the
Zandfontein underground restart business plan, subject to final evaluation and funding arrangements.
Care and maintenance will also continue for the Company's eastern limb projects for 2023. The
Company is actively looking at opportunities for its other assets including continuing to explore options to
utilize or monetize these assets.
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
:
Audited Consolidated Financial Statements for the fiscal year ended December 31, 2022;
Management's Discussion and Analysis for the fiscal year ended December 31, 2022; and
Annual Information Form at December 31, 2022.
The audited consolidated financial statements for the fiscal year ended December 31, 2022 is available
for download at
https://www.eastplats.com/investors/quarterly-reports/F2022/
and is also available on the
JSE's website at:
https://senspdf.jse.co.za/documents/2023/JSE/ISSE/EPS/FY22.pdf
.
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 limb of the Crocodile River Mine and
eastern limb of Kennedy's Vale, Spitzkop and Mareesburg projects within 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
(email)
(604) 800-8200 (phone)
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", "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: the
Company's targets for 2023 including operating and optimizing the PGM circuits, raising capital to
restart Zandfontein underground operations at the CRM; operating and optimizing the Retreatment
Project and maximize returns; completing the Optimization Program for the Retreatment Project,
assessing the value of the chrome recovery plant; completing the second phase of the TSF capital works
program; advancing the 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; commissioning Main Plant Circuit A for underground
operations; updating other capital assessments upon completion of capital fundraising; continuing care
and maintenance with respect to the underground portion of the CRM the Company raises funds for the
underground operations restart; continuing care and maintenance of the Company's eastern limb
projects for 2023, and successful completion of opportunities for its other assets including continuing to
explore options to utilize or monetize these assets. 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 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.
To view the source version of this press release, please visit
https://www.newsfilecorp.com/release/161473