VANCOUVER, BC, Nov. 8, 2024 /CNW/ - Eastern Platinum Limited (TSX: ELR) (JSE: EPS) ("Eastplats" or the "Company") is pleased to report that it has filed its condensed interim consolidated financial statements for the three and nine months ended September 30, 2024 and the corresponding management's discussion and analysis ("MD&A"). Below is a summary of the Company's financial results for the third quarter of 2024 ("Q3 2024") and for the nine months ended September 30, 2024 ("YTD 2024") in comparison to the same respective period in in 2023 ("Q3 2023" and "YTD 2023") (all amounts in USD unless specified):
Eastern Platinum Ltd. (Eastplats) logo (CNW Group/Eastern Platinum Ltd.)
Revenue for Q3 2024 decreased to $11.0 million (Q3 2023 - $21.8 million), representing a $10.8 million or 49.5% decrease. Revenue for YTD 2024 decreased to $45.5 million (YTD 2023 - $76.5 million), representing a $31.0 million or 40.5% decrease.
Mine operating income decreased by $8.0 million (or -114.3%) to a mine operating loss of $1.0 million in Q3 2024 (Q3 2023 - mine operating income of $7.0 million) as gross margin declined to -9.4% in Q3 2024 from 32.1% in Q3 2023. Mine operating income in YTD 2024 decreased by $15.1 million (or -63.4%) to $8.7 million (YTD 2023 - $23.8 million), resulting from a reduced gross margin of 19.1% in YTD 2024 from 31.1% in YTD 2023.
Eastplats incurred an operating loss of $5.7 million in Q3 2024 compared to operating income of $3.6 million in Q3 2023. Operating loss was $4.1 million in YTD 2024 compared to operating income of $15.8 million in YTD 2023.
Net loss attributable to equity shareholders was $3.4 million ($0.02 loss per share) in Q3 2024 versus net income attributable to equity shareholders of $3.1 million ($0.02 earnings per share) in Q3 2023. The decrease in Q3 2024 net income was largely attributable to lower chrome sales in the quarter offset by a decrease in finance costs and a foreign exchange gain in the period due to the strengthening of the South African Rand.
Net loss attributable to equity shareholders was $0.8 million ($0.00 loss per share) in YTD 2024 compared to net income attributable to equity shareholders of $10.4 million ($0.06 earnings per share) in YTD 2023. The decrease of YTD 2024 net income was mainly attributable to lower gross margins earned on year-to-date chrome sales offset by a decrease in finance costs and a foreign exchange gain in the period due to the strengthening of the South Africa Rand.
The Company had a working capital deficit (current assets less current liabilities) of $26.6 million as at September 30, 2024 (December 31, 2023 – working capital deficit of $15.5 million) and short-term cash resources of $8.5 million (consisting of cash, cash equivalents and short-term investments) (December 31, 2023 – $21.3 million).
Wanjin Yang, Chief Executive Officer and President of Eastplats commented, "We continue to ramp up tonnages at the Zandfontein underground section at the Crocodile River Mine to produce high grade PGM and metallurgical chrome concentrate. As we approach the end of 2024 and plan for 2025, we are focussed on improving recoveries and operating efficiently."
Operations
The Company derived revenue from the processing of PGM and chrome concentrates at the Crocodile River Mine ("CRM"). Eastplats' majority of revenue (approximately 84% and 92% for Q3 2024 and YTD 2024, respectively) is from chrome concentrate sales.
Retreatment Project – Chrome recovery
Summary of chrome production for the three and nine months ended September 30, 2024 and 2023:
Q3 2024
Q3 2023
YTD 2024
YTD 2023
Total Tailings Feed (Tons)
294,246
519,914
961,412
1,766,928
Average grade Cr concentrate
38.1 %
38.6 %
38.4 %
38.7 %
Tons of Cr concentrate
45,988
102,898
198,175
377,110
The Company continues the tailings storage facility ("TSF") wall building program, utilizing waste rock and paddocking, to raise the wall to facilitate continued depositing of reprocessed tailings. The reprocessing of the original CRM tailings (the "Retreatment Project") is expected to be completed by early 2025.
PGM Circuits
Summary of PGM production from processing historic tailings resource through the PGM circuits for the three and nine months ended September 30, 2024 and 2023:
Q3 2024
Q3 2023
YTD 2024
YTD 2023
Tons of PGM concentrate
223
854
1,976
2,969
PGM ounces produced (6E)*
273
1,187
2,827
5,294
*PGM 6E ounces are estimates until final exchanges and umpire results have been concluded, which can take up to three months
Year-over-year production decreased between Q3 2023 and Q3 2024 due to operational challenges in the current period, as lower grade sections of the TSF, containing vegetation and other impediments, were being processed.
Underground Operations
In Q3 2024, while commissioning of the processing plant continued, the Company began processing run-of-mine ("ROM") UG2 ore produced from the Zandfontein underground section at the CRM. A total of 75,000 tons of ROM ore was blasted up to October 1, 2024, with approximately 22,000 tons of the ROM ore processed in September.
Summary of PGM and chrome production from underground operations for the three and nine months ended September 30, 2024:
Q3 2024
YTD 2024
Tons of chrome concentrate
4,354
4,354
Tons of PGM concentrate
242
242
PGM ounces produced (6E)*
1,211
1,211
*PGM 6E ounces are estimates until final exchanges and umpire results have been concluded, which can take up to three months.
Prior Period Restatement of Comparatives
Certain 2023 comparative numbers in the condensed interim consolidated financial statements and corresponding MD&A have been restated to show the impact of an error that was identified and reported during the 2023 year end process, as discussed below.
As discussed in the previous news release of May 3, 2024, in connection with the preparation of the Company's consolidated financial statements for the year ended December 31, 2023, an error was identified in the recognition of revenue related to a chrome concentrate sales transaction in the fourth quarter of 2022 which impacted the Company's previously filed audited consolidated financial statements for the year ended December 31, 2022 and its unaudited condensed interim consolidated financial statements up to and including the three and nine months ended September 30, 2023.
A sales transaction that was included in deferred revenue at the end of 2022 and recognized as revenue in the first quarter of 2023 should have been recognized in the fourth quarter of 2022 based on the fact that the Company had met all of its required performance obligations at the time, as supported by the underlying contract and bill of lading. Previously reported revenue for the first quarter of 2023 was overstated by $4.0 million, with associated adjustments in production costs, accumulated other comprehensive loss and deficit. These adjustments carried forward into the year-to-date figures reported as comparatives in the Company's quarterly financial statements.
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, Condensed Interim Statement of Comprehensive Income, Condensed Interim Statement of Financial Position and Condensed Interim Consolidated Statements of Cash Flow, expressed in thousands of U.S. dollars, except for per share amounts.
Nine months ended September 30, 2023
As previously reported
Adjustment
As restated
$
$
$
Revenue
80,501
(4,021)
76,480
Production costs
(50,197)
2,324
(47,873)
Mine operating income
25,490
(1,697)
23,793
Operating income
17,474
(1,697)
15,777
Net income for the period
12,125
(1,697)
10,428
Net income attributable to equity shareholders of the Company
12,134
(1,697)
10,437
Earnings per share, basic and diluted
0.07
(0.01)
0.06
Comprehensive income for the period
3,890
(1,766)
2,124
As at September 30, 2023
As previously reported
Adjustment
As restated
$
$
$
Accumulated other comprehensive loss
(326,032)
(13)
(326,045)
Deficit
(840,110)
13
(840,097)
Nine months ended September 30, 2023
As previously reported
Adjustment
As restated
$
$
$
Net changes in non-cash working capital items
Inventories
2,092
(2,324)
(232)
Deferred revenue
(4,677)
4,021
(656)
The Company's audited consolidated financial statements for the year ended December 31, 2023 reflected these changes. The unaudited interim consolidated financial statements and related financial information for the affected period contained in the Company's unaudited interim filings prior to August 12, 2024 should no longer be relied upon.
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.sedarplus.ca:
Condensed interim consolidated financial statements for the three and nine months ended September 30, 2024; and
Management's discussion and analysis for the three and nine months ended September 30, 2024.
The condensed interim consolidated financial statements for the three and nine months ended September 30, 2024 are available for download at https://www.eastplats.com/investors/quarterly-reports/F2024/ and are also available on the JSE's website at:
Eastplats owns directly and indirectly a number of platinum group metals ("PGM") and chrome assets in the Republic of South Africa. All of the Company's properties are situated on the western limb (Crocodile River Mine) and eastern limb (Kennedy's Vale, Spitzkop, Mareesburg) of 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 from the Barplats Zandfontein tailings dam and mining and processing ore from the Zandfontein underground section to both produce PGM and chrome concentrates.
Cautionary Statement Regarding Forward-Looking Information
This news 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.sedarplus.ca.
In particular, this press release contains, without limitation, forward-looking statements pertaining to: completion of the original CRM tailings and improvement of PGM and chrome recoveries and operations. 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 news 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.sedarplus.ca. The forward-looking statements in this news 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.
