Vancouver, British Columbia, Nov 11, 2021 (Newsfile Corp via COMTEX) -- Vancouver, British Columbia--(Newsfile Corp. - November 11, 2021) - 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 and management's discussion and analysis for the three and nine months ended September 30, 2021. Below is a summary of the Company's financial results for the third quarter of 2021 () Q3 2021 ") and for the nine months ended September 30, 2021 () YTD Q3 2021 ") (all amounts in USD unless specified) in comparison to the same respective periods in 2020 (" Q3 2020 " and " YTD Q3 2020 ", respectively):
Revenue for Q3 2021 decreased to approximately $15.9 million (Q3 2020 - $16.8 million), representing a 5.4% decrease. Revenue for YTD Q3 2021 increased to $52.6 million (YTD Q3 2020 - $40.3 million), representing a 30.5% increase.
Mining operating income increased by $0.2 million (or 11.8%) to $1.9 million in Q3 2021 (Q3 2020 - $1.7 million), representing an improved gross margin of 11.9% in Q3 2021 from 9.8% in Q3 2020. Mining operating income in YTD Q3 2021 increased by $2.6 million (or 65%) to $6.6 million (YTD Q2 2020 - $4.0 million), representing an improved gross margin of 12.6% in YTD Q3 2021 from 10.0% in YTD Q3 2020.
Operating loss was $0.4 million in Q3 2021 compared to an operating loss of $0.8 million in Q3 2020. Operating loss improved by $1.7 million to $1.4 million in YTD Q3 2021 from $3.1 million in YTD Q3 2020, a 54.8% decrease in operating loss.
Net loss attributable to shareholders was $2.5 million (loss attributable to shareholders - $0.02 per share) in Q3 2021 versus income of $0.2 million in Q3 2020 (earnings attributable to shareholders - $0.00 per share). The decrease during Q3 2021 is primarily attributable to an increase in the foreign exchange loss as the South African Rand weakened against the U.S. Dollar.
Net income attributable to shareholders increased to $0.8 million (earnings attributable to shareholders - $0.01 per share) in YTD Q3 2021 compared to a loss of $11.0 million (loss attributable to shareholders - $0.12 per share) in YTD Q3 2020. The improvement during YTD Q3 2021 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; a decrease in the foreign exchange loss as the South African Rand recovered against the U.S. Dollar; and a gain of $3.3 million to settle and dismiss certain outstanding lawsuits (see press release of June 21, 2021 for further information).
Positive working capital (current assets less current liabilities) of $13.1 million as at September 30, 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 and nine months ended September 30, 2021 and 2020:
|Q3 2021||Q3 2020||YTD Q3 2021||YTD Q3 2020|
|Total Tailings Feed (Tons)||638,791||622,389||1,906,963||1,657,570|
|Average grade Cr concentrate||38.77%||38.66%||38.57%||38.58%|
|Tons of Cr concentrate||195,942||275,816||623,331||784,778|
The Company's majority of revenue (approximately 96% and 93% for Q3 2021 and YTD Q3 2021, 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 Q3 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), which is expected to drive further revenue growth and gross margin improvement.
Summary of PGM production for the three and nine months ended September 30, 2021:
|Q3 2021||Q3 2020||YTD Q3 2021||YTD Q3 2020|
|Tons of PGM concentrate||366||-||948||-|
Diana Hu, President, Chief Executive Officer, and Director of Eastplats commented, "We continue to be encouraged by the results from the third quarter as Eastplats continues its positive revenue growth and profitability through the Retreatment Project; increasing PGM capacity by the recent commissioning of PGM Main Circuit B; and the possibility to restart the Zandfontein underground operations at the Crocodile River Mine."
There were no changes to the alert levels in South Africa, and they remain at alert level 1 regarding COVID-19. The Company continues to follow the health guidelines of the Government of South Africa. The chrome and PGM production and delivery remains in full operation. The effects of COVID-19 are evolving and changing and the consequences of a further increase in the alert level in South Africa, temporary shutdown of any operations or other related issues cannot be reasonably estimated at this time, but could potentially have material adverse effects on the Company's business, operations, liquidity and cashflows.
The Company's targets for 2021 were updated following the completion of its rights offering in January 2021, including:
Continue operating the Retreatment Project efficiently;
Reconfigure, optimize, and consistently operate the PGM Circuit D, which also includes funding for some of the initial work required to restart the PGM Main Circuit B (see press release of February 2, 2021) (completed);