Vancouver, British Columbia, Mar 25, 2022 (Newsfile Corp via COMTEX) -- Vancouver, British Columbia--(Newsfile Corp. - March 25, 2022) - Eastern Platinum Limited (jse:EPS) /zigman2/quotes/208644856/delayed CA:ELR 0.00% (" Eastplats " or the " Company ") is pleased to report that it has filed its Audited Consolidated Financial Statements for the fiscal year ended December 31, 2021 and the corresponding Management's Discussion and Analysis and Annual Information Form. Below is a summary of the Company's financial results for the fourth quarter of 2021 () Q4 2021 ") and for the fiscal year ended December 31, 2021 () FY2021 ") (all amounts in USD unless specified) in comparison to the same respective periods in 2020 (" Q4 2020 " and " FY2020 ", respectively):
Revenue for Q4 2021 decreased to $15.6 million (Q4 2020 - $15.8 million), representing a 1.3% decrease. Revenue for FY2021 increased to $68.2 million (FY2020 - $56.1 million), representing a 21.5% increase.
Mine operating income increased by $1.4 million (or 93.8%) to $3.0 million in Q4 2021 (Q4 2020 - $1.5 million), resulting in an improved gross margin of 19.1% in Q4 2021 from 9.7% in Q4 2020. Mine operating income in FY2021 increased by $4.1 million (or 73.1%) to $9.6 million (FY2020 - $5.6 million), resulting in an improved gross margin of 14.1% in FY2021 from 9.9% in FY2020.
Operating income was $0.2 million in Q4 2021 compared to an operating loss of $0.7 million in Q4 2020. Operating loss improved by $2.5 million to $1.2 million in FY2021 from $3.7 million in FY2020, a 67.2% decrease in operating loss.
Net loss attributable to shareholders was $1.9 million ($0.01 loss per share) in Q4 2021 versus earnings attributable to shareholders of $3.0 million ($0.03 earnings per share) in Q4 2020. The Q4 2021 net loss was largely attributable to the foreign exchange loss due to the depreciation of the South African Rand relative to the U.S. Dollar in Q4 2021 while in Q4 2020, the Rand had strengthened.
Net loss attributable to shareholders decreased to $1.2 million ($0.01 loss per share) in FY2021 compared to a loss of $8.0 million ($0.08 loss per share) in FY2020. The improvement during FY2021 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 () PGM ") concentrate, respectively; and a gain of $3.3 million to settle and dismiss certain outstanding lawsuits (see press release of June 21, 2021 for further information). The improvement was offset by increased care and maintenance costs due to a rise in labour and electricity costs in South Africa and work on the Zandfontein underground at the CRM.
The Company had positive working capital (current assets less current liabilities) of $14.6 million as at December 31, 2021 (December 31, 2020 - $4.1 million).
The Company continues its Retreatment Project at Barplats Mines (Pty) Limited's tailings facility located at the Company's CRM in South Africa.
Summary of chrome production for the three months and year ended December 31, 2021 and 2020:
||Q4 2021||Q4 2020||FY2021||FY2020|
|Total Tailings Feed (Tons)||597,814||671,162||2,504,777||2,328,732|
|Average grade Cr concentrate||39.38%||38.46%||38.71%||38.56%|
|Tons of Cr concentrate||149,943||202,225||773,274||987,003|
The majority of the Company's revenue (approximately 89% and 92% for Q4 2021 and FY2021, 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 Q4 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 (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, which continue to drive revenue growth and gross margin improvement for the Company.
Summary of PGM production for the three months and year ended December 31, 2021:
||Q4 2021||Q4 2020||FY2021||FY2020|
|Tons of PGM concentrate||905||32||1,853||32|
During the year, 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, "We continue to be encouraged by the positive results as the Company's revenue growth and profitability improves from the Retreatment Project and PGM capacity increases from the PGM circuits. We have initiated efforts to raise funds to restart the Zandfontein underground operations at the Crocodile River Mine and if successful, look forward to the opportunity to generate additional revenue streams for the Company."
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);