Eastplats main revenue from chrome concentrate offtake agreement

VANCOUVER, British Columbia – Eastern Platinum (Eastplats) in its financial results for the third quarter of 2021 (“Q3 2021”) and for the nine months ended September 30, 2021 (“YTD Q3 2021”) in comparison to the same respective periods in 2020 (“Q3 2020” and “YTD Q3 2020”, respectively):

  • Revenue for Q3 2021 decreased to approximately $15.9 million (Q3 2020 – $16.8 million), representing a 5.4% decrease. Revenue for YTD Q3 2021 increased to $52.6 million (YTD Q3 2020 – $40.3 million), representing a 30.5% increase.
  • Mining operating income increased by $0.2 million (or 11.8%) to $1.9 million in Q3 2021 (Q3 2020 – $1.7 million), representing an improved gross margin of 11.9% in Q3 2021 from 9.8% in Q3 2020. Mining operating income in YTD Q3 2021 increased by $2.6 million (or 65%) to $6.6 million (YTD Q2 2020 – $4.0 million), representing an improved gross margin of 12.6% in YTD Q3 2021 from 10.0% in YTD Q3 2020.
  • Operating loss was $0.4 million in Q3 2021 compared to an operating loss of $0.8 million in Q3 2020. Operating loss improved by $1.7 million to $1.4 million in YTD Q3 2021 from $3.1 million in YTD Q3 2020, a 54.8% decrease in operating loss.
  • Net loss attributable to shareholders was $2.5 million in Q3 2021 versus income of $0.2 million in Q3 2020. The decrease during Q3 2021 is primarily attributable to an increase in the foreign exchange loss as the South African Rand weakened against the U.S. Dollar.
  • The improvement during YTD Q3 2021 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 concentrate, respectively; a decrease in the foreign exchange loss 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.
  • Positive working capital (current assets less current liabilities) of $13.1 million as at September 30, 2021 (December 31, 2020 – $4.1 million).

OPERATIONS

The Company continues its Retreatment Project at Barplats Mines (Pty) Limited’s tailings facility located at the Company’s CRM in South Africa. The Company’s majority of revenue (approximately 96% and 93% for Q3 2021 and YTD Q3 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 Limited (“Impala”). There were no PGM revenues generated during the comparable periods in 2020.

The completion of the reconfiguration and optimization of the small-scale PGM circuit (“PGM Circuit D”) 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 Q3 2021. Refurbishment work commenced on the PGM main plant circuit (“PGM Main Circuit B”) during April 2021 and the circuit was commissioned in October 2021, which is expected to drive further revenue growth and gross margin improvement.

Diana Hu, President, Chief Executive Officer, and Director of Eastplats commented, “We continue to be encouraged by the results from the third quarter as Eastplats continues its positive revenue growth and profitability through the Retreatment Project; increasing PGM capacity by the recent commissioning of PGM Main Circuit B; and the possibility to restart the Zandfontein underground operations at the Crocodile River Mine.”

OUTLOOK

The Company’s targets for 2021 were updated following the completion of its rights offering in January 2021, including:

  • Continue operating the Retreatment Project efficiently;
  • Reconfigure, optimize, and consistently operate the PGM Circuit D, which also includes funding for some of the initial work required to restart the PGM Main Circuit B (completed);
  • Completion of the refurbishment of the existing PGM Main Circuit B to increase the capacity and opportunity of PGM recovery and sales (see press release of October 29, 2021) (completed);
  • Completion of the optimization project for the Retreatment Project (ongoing);
  • Establishment of the second phase of the tailings storage facility (“TSF”) capital works program (ongoing);
  • Upgrades and repairs to the CRM Zandfontein underground (“Zandfontein Underground”) shaft and rock winder to ensure they are available for underground mining operations (rock winder completed and shaft repairs expected completion by year end);
  • Mareesburg project environmental work to complete the legal scan on the environmental impact assessment (“EIA”) and other environmental studies and amendments (ongoing);
  • Prospecting and assessment work in relation to Zandfontein, Crocette and Spitzkop ore bodies (ongoing);
  • EIA and assessment work regarding a vertical furnace and pelletizer of chrome concentrate (ongoing); and
  • CRM underground assessment including all chrome recovery activities in relation to the Retreatment Project (ongoing).

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