Eastern Platinum intends to raise capital as quarterly revenues surge

This improvement was attributed to the increased revenue and positive gross margins generated by the big increase in third party chrome revenue. Picture: Supplied

This improvement was attributed to the increased revenue and positive gross margins generated by the big increase in third party chrome revenue. Picture: Supplied

Published Nov 13, 2023

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Eastern Platinum said Friday it intends to raise capital for its projects following a sharp surge in revenues in the third quarter from its chrome mining operations.

Revenue increased by a massive 505.6% to $21.8 million ($3.6m) in its third quarter to September 30, with the year-on-year increase driven mainly by an increase in chrome prices.

Year-to-date (YTD) revenue increased 94% to $80.5m from $41.5m, the miner said on Friday in a statement about its third quarter results.

"Although chrome production decreased this quarter, we are still encouraged by revenue generated from the tailings storage facility. As we have started blasting activities at the Zandfontein underground section of the Crocodile River Mine (CRM), we expect to process the underground ore in the first quarter of 2024," chief executive and president Wanjin Yang said in a statement.

Yang said additional capital would be raised to support a number of projects, including the full re-opening of Zandfontein underground operations at the CRM, optimising the Retreatment Project, and completing the optimisation of the chrome recovery plant.

Other projects included completing the second phase of the tailings storage facility, advancing the Mareesburg project environmental work, and to continue prospecting the Zandfontein, Crocette and Spitzkop ore bodies.

Mine operating income increased by $5.1m, or 268.4%, to $7m in the third quarter, while gross margin decreased from 52.5% in the third quarter of 2022 to 32.1% in the third quarter of 2023.

Mine operating income in YTD 2023 increased by $16.1m, or 171.3%, to $25.5m.

Operating income was $3.6m in the third quarter compared with an operating loss of $0.9m at the same time a year before.

Attributable income for the quarter came to $3.1m versus a $6.6m net loss at the same time last year.

The increase in third quarter net income was largely due to a big increase in third party chrome revenue from the sales of chrome concentrate, with respect to the Retreatment Project at Barplats Mines's tailings storage facility located at CRM in South Africa.

Net income attributable to equity shareholders YTD increased to $12.1m ($0.07 earnings per share), compared to net loss of $2.4m ($0.02 loss per share) in YTD 2022.

This improvement was attributed to the increased revenue and positive gross margins generated by the big increase in third party chrome revenue.

The company had short-term cash resources of $17.3m versus $2.4m available at the end of December 2022.

Chrome concentrate production from its Retreatment Project continued. Blasting had commenced at CRM, which initiated the soft restart of the Zandfontein underground section.

The company also derives revenue from platinum group metals (PGM) concentrate sales under an offtake agreement with Impala Platinum. The majority of revenue however was generated from chrome concentrate sales to third parties since the fourth quarter of 2022.

While PGM prices had fallen, chrome prices had increased during the same period, which had driven revenue and mine operating income growth.

However, chrome revenue is expected to wind down into 2024 as the Retreatment Project approached its completion date.

When that occurs, the PGM Circuit D and PGM Main Circuit B would become the main source of revenue as the company ramped up production at the Zandfontein underground section of the CRM, the mine said.

BUSINESS REPORT