Eastern Platinum increased revenue by 114.9% for Q2 2021
VANCOUVER, British Columbia – Eastern Platinum Limited (Eastplats) says revenue for the three months ended June 30, 2021 (Q2 2021) increased to approximately $20.0 million (Q2 2020 – $9.3 million), representing a 114.9% increase. Revenue for the six months ended June 30, 2021 (YTD Q2 2021) increased to $36.7 million (YTD Q2 2020 – $23.5 million) representing a 56.2% increase.
Mining operating income increased to $3.3 million in Q2 2021 (Q2 2020 – $0.9 million), representing an improved gross margin of 16.6% in Q2 2021 from 10.1% in Q2 2020. Mining operating income in YTD Q2 2021 increased to $4.8 million (YTD Q2 2020 – $2.4 million), representing an improved gross margin of 13.0% in YTD Q2 2021 from 10.1% in YTD Q2 2020.
Operating income was $0.7 million in Q2 2021 compared to an operating loss of $1.0 million in Q2 2020. Operating loss decreased by $1.2 million to $1.0 million in YTD Q2 2021 from $2.2 million in YTD Q2 2020 – a 53.8% decrease in operating loss.
The improvement during Q2 2021 is primarily attributable to the increased revenue and positive gross margins generated by re-mining and processing the Company’s tailings resource at the Crocodile River Mine (“CRM”) to produce chrome concentrate and PGM concentrate, an increase in the foreign exchange gain as the South African Rand recovered against the U.S. Dollar, and a gain of $3.3 million to settle and dismiss certain outstanding lawsuits.
The Company continues its Retreatment Project at Barplats Mines’ tailings facility located at the Company’s CRM in South Africa.
The Company’s majority of revenue (approximately 90% and 92% for Q2 2021 and YTD Q2 2021, respectively) 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.
The completion of the reconfiguration and optimization of the small-scale PGM circuit in Q1 2021 continued to successfully utilize the feed, following the recovery of chrome concentrate, to produce PGM concentrate under the respective offtake agreements in Q2 2021.
Diana Hu, President and CEO of Eastplats commented, “We are encouraged by the results from the second quarter as Eastplats continues its positive revenue growth and profitability through the Retreatment Project; increasing PGM capacity including through the PGM Main Circuit, which is expected to commission in the near future; and developing our other projects in the eastern limb of the Bushveld Complex.”
The Company’s targets for 2021 were updated following the completed Rights Offering in January 2021, including:
• Continue operating the Retreatment Project efficiently
• Reconfigure, optimize, and consistently operate the small-scale PGM Circuit D, which also includes funding for some of the initial work required to restart the PGM Main Circuit (See press release of February 2, 2021);
- Completion of the Optimization Project for the Retreatment Project;
- Completion of the refurbishment of the existing PGM Main Circuit to increase the capacity and opportunity of PGM recovery and sales;
- Establishment of the appropriate tailings storage facility phase II capital works program;
- Upgrades and repairs to the CRM Zandfontein underground shaft and rock winder to ensure they are available for underground mining operations;
- Mareesburg project environmental work to complete the environmental impact assessment (“EIA”) and other environmental studies and amendments;
- Prospecting and assessment work in relation to Zandfontein, Crocette and Spitzkop ore bodies;
- EIA and other assessment work regarding a vertical furnace and pelletizer of chrome concentrate; and
- CRM underground assessment including all chrome recovery activities in relation to the Retreatment Project.
The Company is actively progressing several revenue opportunities and exploring options to utilize or monetize other assets.