Vancouver, British Columbia, Aug 15, 2022 (Newsfile Corp via COMTEX) -- Vancouver, British Columbia--(Newsfile Corp. - August 15, 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 and six months ended June 30, 2022 and the corresponding management's discussion and analysis. Below is a summary of the Company's financial results for the second quarter of 2022 () Q2 2022 ") and for the six months ended June 30, 2022 () YTD 2022 ") (all amounts in USD unless specified) in comparison to the same respective period in 2021 (" Q2 2021 " and " YTD 2021 ", respectively):
Revenue for Q2 2022 increased to $20.5 million (Q2 2021 - $20.0 million), representing a 2.5% increase. Revenue for YTD 2022 increased to $37.9 million (YTD 2021 - $36.7 million), representing a 3.4% increase.
Mine operating income increased by $0.9 million (or 25.2%) to $4.2 million in Q2 2022 (Q2 2021 - $3.3 million), resulting in an improved gross margin of 20.3% in Q2 2022 from 16.6% in Q2 2021. Mine operating income in YTD 2022 increased by $2.8 million (or 59.1%) to $7.6 million (YTD 2021 - $4.8 million), resulting in an improved gross margin of 19.9% in YTD 2022 from 13.0% in YTD 2021.
Operating income was $0.9 million in Q2 2022 compared to $0.7 million in Q2 2021. Operating income improved by $2.0 million to $1.0 million in YTD 2022 from an operating loss of $1.0 million in YTD 2021.
Net income attributable to equity shareholders was $1.2 million ($0.01 earnings per share) in Q2 2022 versus net income attributable to equity shareholders of $4.1 million ($0.03 earnings per share) in Q2 2021. The Q2 2022 net income was largely attributable to income tax recoveries in the quarter, while in Q2 2021, the Company received legal settlement income of $3.3 million to settle and dismiss certain outstanding lawsuits.
Net income attributable to equity shareholders increased to $4.2 million ($0.03 earnings per share) in YTD 2022 compared to net income attributable to equity shareholders of $3.3 million ($0.02 earnings per share) in YTD 2021. The improvement during YTD 2022 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 income tax recoveries as mentioned above in Q2 2022. Also mentioned above, the Company received legal settlement income of $3.3 million in YTD 2021, which did not occur in YTD 2022.
The Company had positive working capital (current assets less current liabilities) of $16.1 million as at June 30, 2022 (December 31, 2021 - $14.6 million) and short-term cash resources of $6.4 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 CRM in South Africa.
Summary of chrome production for the three and six months ended June 30, 2022 and 2021:
|Q2 2022||Q2 2021||YTD 2022||YTD 2021|
|Total Tailings Feed (Tons)||664,721||660,566||1,238,973||1,268,172|
|Average grade Cr concentrate||38.7%||38.5%||38.8%||38.5%|
|Tons of Cr concentrate||169,839||223,487||290,961||427,389|
The majority of the Company's revenue (approximately 84% for Q2 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 Company is currently owed approximately $17.0 million from Union Goal in accounts receivable from processing and dispatching chrome concentrate in addition to $6.0 million for chrome concentrate not yet invoiced as of the date of this news release. Payments against the outstanding receivable from Union Goal have been slow despite repeated requests for a payment plan. Management is in the process of evaluating and communicating with Union Goal to determine an agreeable outcome. A default on the receivable or lack of payment from Union Goal could have a significant impact not only on the instrument credit risk adjustments recorded to date but on the Company's liquidity as a whole. Further delays in payment may require the Company to re-evaluate the fair value of the contract payable, re-evaluate the value of the contracts to the parties, and could lead to a renegotiation/change of the Union Goal contracts, including target completion dates for the optimization program. The Company still expects to receive all monies owed to it and will pursue all commercial options available to it to collect these amounts. The Company will continue to keep the shareholders informed of these risks and the Company's chosen course of action in due course.
The PGM Circuit D and PGM Main Circuit B (collectively, the " PGM Circuits ") continue to drive revenue growth and gross margin improvement for the Company.
Summary of PGM production for the three and six months ended June 30, 2022 and 2021:
|Q2 2022||Q2 2021||YTD 2022||YTD 2021|
|Tons of PGM concentrate||1,868||539||2,747||582|
|PGM ounces produced (6E)*||2,561||1,112||3,924||1,217|
*PGM 6E ounces are estimates until final exchanges and umpire results have been concluded, which can take up to three months.
Wanjin Yang, Chief Executive Officer and President commented, "The Q2 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 also focused on achieving a commercial result to reduce Union Goal's outstanding receivables."
The Company's targets for 2022 are as follows:
Operate and optimize the Retreatment Project and maximize returns (ongoing)
Operate and optimize the PGM Circuits (ongoing);
Complete an updated independent technical report on the CRM (completed);