Vancouver, British Columbia, May 13, 2022 (Newsfile Corp via COMTEX) -- Vancouver, British Columbia--(Newsfile Corp. - May 13, 2022) - Eastern Platinum Limited /zigman2/quotes/208644856/delayed CA:ELR 0.00% (jse:EPS) (" Eastplats " or the " Company ") is pleased to report that it has filed its condensed interim consolidated financial statements for the three months ended March 31, 2022 and the corresponding management's discussion and analysis. Below is a summary of the Company's financial results for the first quarter of 2022 () Q1 2022 ") (all amounts in USD unless specified) in comparison to the same respective period in 2021 (" Q1 2021 "):
Revenue for Q1 2022 increased to $17.4 million (Q1 2021 - $16.7 million), representing a 4.3% increase. The increase in revenue for Q1 2022 was primarily due to an increase in platinum group metal ("PGM") sales in the period.
Mine operating income increased by $2.0 million (or 137.5%) to $3.4 million in Q1 2022 (Q1 2021 - $1.4 million), resulting in an improved gross margin of 19.6% in Q1 2022 from 8.6% in Q1 2021.
Operating income was $0.1 million in Q1 2022 compared to an operating loss of $1.7 million in Q1 2021.
Net income attributable to shareholders was $3.0 million ($0.02 earnings per share) in Q1 2022 versus loss attributable to shareholders of $0.9 million ($0.01 loss per share) in Q1 2021. The Q1 2022 net income was largely attributable to the foreign exchange gain due to the appreciation of the South African Rand relative to the U.S. Dollar in Q1 2022, while in Q1 2021, the U.S. Dollar strengthened.
The Company had positive working capital (current assets less current liabilities) of $17.2 million as at March 31, 2022 (December 31, 2021 - $14.6 million) and short-term cash resources of $6.6 million (consisting of cash, cash equivalents and short-term investments) (December 31, 2021 - $6.1 million).
The Company continues its Retreatment Project at Barplats Mines (Pty) Limited's tailings facility (the "Retreatment Project") located at the Company's Crocodile River Mine ("CRM") in South Africa.
Summary of chrome production for the three months ended March 31, 2022 and March 31, 2021:
||Q1 2022||Q1 2021|
|Total Tailings Feed (Tons)||574,242||607,606|
|Average grade Cr concentrate||38.97%||38.47%|
|Tons of Cr concentrate||121,122||203,901|
The majority of the Company's revenue (approximately 84% for Q1 2022) 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 ").
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 Q1 2022. Refurbishment work commenced on the PGM main plant circuit () PGM Main Circuit B ") during April 2021 and the circuit was commissioned in October 2021 (see press release of October 29, 2021 for further information). PGM Circuit D and PGM Main Circuit B (collectively, the " PGM Circuits ") are both operating and continue to drive revenue growth and gross margin improvement for the Company.
Summary of PGM production for the three months ended March 31, 2022 and 2021:
||Q1 2022||Q1 2021|
|Tons of PGM concentrate||879||44|
During the period, the Company continued work to close the Maroelabult resource project sale with Eland Platinum (Pty) Limited. Eastplats announced the completion of the sale (see press release of March 22, 2022 for further information). Total cash consideration of R20 million (approximately $1.3 million) was received on March 9, 2022 after the transfer of legal title and various regulatory obligations required in South Africa were completed.
Diana Hu, President, Chief Executive Officer, and Director of Eastplats, commented, "The Q1 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 NI 43-101 compliant independent technical report on the Crocodile River Mine shortly."
The Company's targets for 2022 are as follows:
Optimize the operations of the Retreatment Project and maximize returns (ongoing)
Operate and optimize the PGM Circuits (ongoing);
Capital raise to restart Zandfontein underground operations at the Crocodile River Mine (initiated);
Completion of the second phase of the tailings storage facility (" TSF ") capital works program (ongoing);