Eastern Platinum Limited

Eastern Platinum Limited

November 12, 2009 09:19 ET

Eastern Platinum Reports Results for the Three Months Ended September 30, 2009

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Nov. 12, 2009) - Mr. Ian Rozier, President and CEO of Eastern Platinum Limited (TSX:ELR)(AIM:ELR)(JSE:EPS) ("Eastplats") is pleased to report financial results for the three months ended September 30, 2009.

Highlights for the quarter ended September 30, 2009 ("Q3 2009")

  • The Crocodile River Mine ("CRM") reached two million fatality-free shifts in September.
  • The Company's Lost Time Injury Frequency Rate (LTIFR) was 1.69 this quarter compared to 3.02 in the third quarter of 2008 ("Q3 2008").
  • Eastplats recorded a net profit attributable to equity shareholders of the Company of $1,839,000 ($0.00 per share) compared to a net loss attributable to equity shareholders of $10,829,000 ($0.02 loss per share) in Q3 2008.
  • Production at CRM was 29,986 PGM ounces compared to 30,758 PGM ounces in Q3 2008, despite the industrial action by contract mining company's workers in July.
  • EBITDA was $4,971,000 compared to negative EBITDA of $11,405,000 in Q3 2008.
  • The average delivered basket price per PGM ounce was $765, a decrease of 36% compared to $1,193 in Q3 2008.
  • Operating cash costs net of by-product credits were $583 per ounce, a 12% increase from $521 per ounce achieved in Q3 2008 as a result of the industrial action in July. Operating cash costs were $758 per ounce, an increase of 13% compared to $672 per ounce in Q3 2008.
  • Rand operating cash costs net of by-product credits were R4,548 per ounce, an increase of 12% compared to R4,055 per ounce in Q3 2008. Rand operating cash costs were R5,915 per ounce, an increase of 13% compared to R5,233 per ounce in Q3 2008.
  • Head grade increased to 4.1 grams per tonne in Q3 2009 from 4.0 grams per tonne in Q3 2008, and average concentrator recovery remained unchanged at 78%.
  • Development meters decreased by 49% to 2,882 meters and on-reef development decreased by 56% to 1,562 meters compared to Q3 2008, partly due to the industrial action in July, and partly due to the planned reduction in reserve development that was initiated in November 2008.
  • Stoping units decreased by 9% to 36,263 square meters and run-of-mine ore hoisted decreased by 23% to 244,959 tonnes compared to the same quarter in 2008 as a result of the industrial action in July.
  • Run-of-mine ore processed decreased by 8% to 280,777 tonnes in Q3 2009 from 305,490 tonnes in Q3 2008, also as a result of the industrial action in July.
  • At September 30, 2009, the Company had a cash position (including cash, cash equivalents and short term investments) of $22,906,000, compared to $21,920,000 at June 30, 2009.

Underground mining activities and production were significantly interrupted during the quarter as a result of the illegal industrial action in July. Development meters, on-reef development meters, and stoping units decreased by 33%, 45% and 29% respectively compared to the quarter ended June 30, 2009 ("Q2 2009"). However, the decrease in run-of-mine ore processed was limited to 8% and the decrease in PGM ounces sold was limited to 10% due to the processing of 35,000 tonnes of surface ore stockpiles which had accumulated as at June 30, 2009.

The decrease in production ounces and production efficiencies led to a 37% increase in operating cash costs per ounce from $554 per ounce in Q2 2009 to $758 per ounce in Q3 2009. Other factors contributing to this increase was a 10% rise in wages effective July 1, 2009 and a 30% rise in electricity costs. An 8% weakening of the U.S. dollar from R8.44:$1.00 in Q2 2009 to R7.80:$1.00 in Q3 2009 also contributed to the increase in operating cash costs, which are incurred primarily in Rand.

Revenues were 10% higher compared to Q2 2009 as a result of a 13% rise in the average delivered basket price per PGM ounce, which also contributed to positive provisional price adjustments for the current quarter, and an increase in chrome production and sales.

"We are pleased to report three consecutive quarters of profit in 2009 during what has been a very difficult period for the sector that has seen the global economic downturn, exchange rate and metal price volatility, and an industrial strike action at CRM and throughout South Africa. We will continue to focus on safety and on lowering our cost structure at CRM and we are moving forward on our other projects such that they will be 'ready to go' as economic conditions continue to improve," said Ian Rozier.

The qualified person having reviewed the operating disclosures presented in this press release is Mr. Brian Montpellier, V.P. Project Development, P. Eng.

Financial Information

For complete details of financial results, please refer to the unaudited condensed consolidated financial statements and accompanying Management's Discussion and Analysis ("MD&A") for the three and nine months ended September 30, 2009. These financial statements and MD&A, and the comparative financial statements for the three and nine months ended September 30, 2008 are all available on SEDAR at www.sedar.com and on the Company's website www.eastplats.com.

Teleconference call details

Eastplats will host a telephone conference call on Thursday, November 12, 2009 at 11:00 am Pacific (2:00 pm Eastern) to discuss these results. The conference call may be accessed by dialing 1-800-319-4610 in Canada and the United States, or 1-604-638-5340 internationally.

The conference call will be archived for later playback until Thursday, November 19, 2009 and can be accessed by dialing 1-604-638-9010 or 1-800-319-6413 and using the pass code 4219 followed by the number sign (#).

Total shares issued and outstanding – 680,570,958

Cautionary Statement on Forward-Looking Information

This press release, which contains certain forward-looking statements, is intended to provide readers with a reasonable basis for assessing the financial performance of the Company. All statements, other than statements of historical fact, are forward-looking statements. The words "believe", "expect", "anticipate", "contemplate", "target", "plan", "intends", "continue", "budget", "estimate", "may", "will", "schedule" and similar expressions identify forward looking statements. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by the Company, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Known and unknown factors could cause actual results to differ materially from those projected in the forward-looking statements. Such factors include, but are not limited to, fluctuations in the currency markets such as Canadian dollar, South African Rand and U.S. dollar, fluctuations in the prices of PGM and other commodities, changes in government legislation, taxation, controls, regulations and political or economic developments in Canada, the United States, South Africa, or Barbados or other countries in which the Company carries or may carry on business in the future, risks associated with mining or development activities, the speculative nature of exploration and development, including the risk of obtaining necessary licenses and permits, and quantities or grades of reserves. Many of these uncertainties and contingencies can affect the Company's actual results and could cause actual results to differ materially from those expressed or implied in any forward-looking statements made by, or on behalf of, the Company. Readers are cautioned that forward-looking statements are not guarantees of future performance. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those acknowledged in such statements. Specific reference is made to the Company's most recent Annual Information Form on file with Canadian provincial securities regulatory authorities for a discussion of some of the factors underlying forward-looking statements.

The Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except to the extent required by applicable laws.

No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein.

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