Metals

Eastplats records strong first quarter

CBCIE Time:May 16, 2022 15:29 Source:miningweekly

Dual-listed Eastern Platinum’s (Eastplats) revenue for the three months ended March 31 increased by 4.3% year-on-year to $17.4-million.

The increase in revenue was primarily owing to an increase in platinum group metal (PGM) sales for the period.

Mine operating income increased by $2-million to $3.4-million, resulting in an improved gross margin of 19.6% for the period.

Operating income was $100 000 for the first quarter, compared with an operating loss of $1.7-million in the prior comparable period.

Net income attributable to shareholders was $3-million in the period, compared with a loss attributable to shareholders of $900 000 in the prior comparable period.

The first-quarter’s net income was largely attributable to the foreign exchange gain owing to the appreciation of the rand relative to the dollar.

The company had positive working capital of $17.2-million as at period end and short-term cash resources of $6.6-million.

Eastplats continues its retreatment project at Barplats Mines’ tailings facility at the company’s Crocodile River mine (CRM) in South Africa.

The majority of the company’s revenue is generated from the offtake agreement with Union Goal Offshore Solution 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 optimisation of the small-scale PGM circuit (PGM Circuit D) in first quarter 2021 continued to successfully use the feed, following the recovery of chrome concentrate, to produce PGM concentrate under the respective offtake agreements in the period.

Refurbishment work began on the PGM main plant circuit (PGM Main Circuit B) during April 2021 and the circuit was commissioned in October 2021.

PGM Circuit D and PGM Main Circuit B are both operating and continue to drive revenue growth and gross margin improvement for the company.

During the period, the company says it continued work to close the Maroelabult resource project sale with Eland Platinum.

It announced the completion of the sale in March. A total cash consideration of R20-million was received on March 9, after the transfer of legal title and various regulatory obligations required in South Africa were completed.

“The first-quarter financial results have shown the company is on the right path to continue its revenue growth and profitability improvements from the retreatment project and capacity increases from the PGM circuits.

“We are confident with the progress made by the team and expect to disclose the updated National Instrument 43-101 compliant independent technical report on the CRM shortly,” CEO and president Diana Hu says.

OUTLOOK

The company’s targets for this year are to optimise the operations of the retreatment project and maximise returns, which entails completing the optimisation programme for the retreatment project and assessing the value of the chrome recovery plant after optimisation. 

Moreover, it aims to operate and optimise the PGM circuits.

It will also undertake a capital raise to restart Zandfontein underground operations at the CRM.  

The company is also seeking completion of the second phase of the tailings storage facility capital works programme.

There is also the Mareesburg project environmental work to complete the legal analysis on the environmental impact assessment (EIA) and other environmental studies and amendments.

The company will also undertake prospecting and assessment work in relation to Zandfontein, Crocette and Spitzkop orebodies; EIA and other assessment work regarding a vertical furnace and pelletizer of chrome concentrate; 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 assesses the Zandfontein underground operations for restart.

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