Eastplats Announces Restatement of Third Quarter of 2022 Financial Statements and MD&A
Eastplats Announces Restatement of Third
Quarter of 2022 Financial Statements and
MD&A
Vancouver, British Columbia--(Newsfile Corp. - March 20, 2023) - Eastern Platinum Limited
(TSX:
ELR)
(
JSE:
EPS)
("
Eastplats
" or the "
Company
") announced that it has amended and restated its
condensed interim consolidated financial statements (the "
Amended and Restated
Financial
Statements
") for the three and nine months ended September 30, 2022 and the corresponding
management's discussion and analysis ("
Amended and Restated
MD&A
").
The restatement is due to a change in Eastplats' accounting policies and determination from
management of when revenue should be recognized in accordance with International Financial
Reporting Standards from its contract with Union Goal Offshore Solutions Limited ("
Union Goal
") and
its sales of chrome concentrate previously recognized in the third quarter of 2022. The transactions in
question involved the monthly production of chrome concentrate at the Company's Crocodile River Mine.
Chrome concentrate revenue is recognized when control is transferred to the offtake party, Union Goal,
in accordance with the executed updated Retreatment Project Agreements (the "
2021 Updated
Retreatment Project Agreements
"), which were signed on March 10, 2021 and include the following:
i
.
The 2021 Revised and Restated Framework Agreement;
ii
.
The 2021 Revised and Restated Offtake Agreement;
iii
.
The 2021 Revised and Restated Eastplats Loan Agreement; and
iv
.
The 2021 Revised and Restated Barplats Equipment and Chrome Plant Agreement.
Previously, and until approximately June 30, 2022, revenue recognition occurred when the chrome
concentrate was produced by the chrome processing circuits and related technology equipment, based
on the assumption that all chrome concentrate was continually shipped upon production, and that
payment from Union Goal was considered probable. However, after re-assessing the probability of future
payment by Union Goal, in the third quarter of 2022, Eastplats suspended shipments to Union Goal as a
result of continuing non-payment by Union Goal and failure of Union Goal to reduce its significantly long
outstanding account. Eastplats began to contract free market sales. As such, these contracts provided
transfer of control and revenue recognition as defined by IFRS 15 - Revenue from Contracts with
Customers, upon completion of the Company's performance obligations which included delivery of the
chrome concentrate off site. Management has concluded that the restatement of its financial results,
financial position, and cash flows for the third quarter of 2022 will appropriately address the timing of
revenue recognition, along with the related accounts receivable and inventory balances, for these
transactions prospectively.
The restatement will reflect the changes in the accounting treatment of these transactions and will result
in the reduction of revenues recognized in the third quarter of 2022 and an increase in inventory as at
September 30, 2022. Stockpiles at the Crocodile River Mine are surveyed monthly by an independent
contractor. Revenue deemed not to have met the re-assessed revenue recognition criteria also results in
an adjustment to accounts receivable.
The following table presents the effects of the restatement on the individual line items within the
Company's unaudited Condensed Interim Consolidated Statement of Income (Loss), Condensed Interim
Statement of Comprehensive Income (Loss) and Condensed Interim Consolidated Statement of
Financial Position, expressed in thousands of U.S. dollars, except for per share amounts.
Three Months Ended
September 30, 2022
Nine Months Ended
September 30, 2022
As
previously
reported
Adjustment
As
restated
As
previously
reported
Adjustment
As
restated
Revenue
$
17,215
$
(13,623
)
$
3,592
$
55,110
$
(13,623
)
$
41,487
Production costs
(11,064
)
9,357
(1,707
)
(37,745
)
9,357
(28,388
)
Production costs - depreciation
(1,728
)
1,728
-
(5,385
)
1,728
(3,657
)
Mine operating income
4,423
(2,538
)
1,885
11,980
(2,538
)
9,442
Operating income (loss)
1,597
(2,538
)
(941
)
2,633
(2,538
)
95
Net income (loss) for the period
(4,065
)
(2,538
)
(6,603
)
299
(2,538
)
(2,239
)
Net income (loss) attributable to equity
shareholders of the Company
(4,064
)
(2,538
)
(6,602
)
154
(2,538
)
(2,384
)
Earnings (loss) per share, basic and diluted
(0.03
)
(0.02
)
(0.05
)
0.00
(0.02
)
(0.02
)
Comprehensive income (loss) for the period
(1,467
)
(2,407
)
(3,874
)
1,163
(2,407
)
(1,245
)
As at September 30, 2022
As
previously
reported
Adjustment
As
restated
Trade and other receivables
$
30,848
$
(7,964
)
$
22,884
Inventories (current) (Note 15)
1,512
10,509
12,021
Deferred revenue (current)
4,648
(1,366
)
3,282
Deferred revenue (non-current)
4,525
6,325
10,850
The Company has been in discussions with its advisors about its plan to file the Amended and Restated
Financial Statements. Eastplats expects it will file its annual financial statements and MD&A for the year
ended December 31, 2022 by the filing deadline of March 31, 2023.
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
:
Amended and Restated condensed interim consolidated financial statements for the three and
nine months ended September 30, 2022; and
Amended and Restated MD&A for the three and nine months ended September 30, 2022.
The Amended and Restated Financial Statements and the Amended and Restated MD&A are available
for download at
https://www.eastplats.com/investors/quarterly-reports/F2022/
and are also available on
the JSE's website at:
https://senspdf.jse.co.za/documents/2022/JSE/ISSE/EPS/Q322.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.
www.eastplats.com
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 filing
its financial statements and MD&A for the year ended December 31, 2022 before the filing deadline of
March 31, 2023. 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.
To view the source version of this press release, please visit
https://www.newsfilecorp.com/release/159055