TORONTO (miningweekly.com) – Shares in miner Eastern Platinum (Eastplats) fell to their lowest level since October 2009 on Monday, after the company reported a $7.9-million loss for the June quarter, having posted a $3.5-million profit in the same three-month period last year.

The loss was mainly owing to a one-third drop in ounces sold to 20 528 oz, which was exacerbated by a 1% slide in the rand basket price the company received for its production from the Crocodile River mine in South Africa.

The US dollar price for Eastplats’ sales rose 10% for the quarter to $1 113/oz, while operating cash costs net of by-product credits rocketed 85% to $1 196/oz, the company said.

Production took a hit from lower grades and recoveries, as well as an illegal sit-in at Crocodile River during May, which also left of the mine’s underground infrastructure damaged.

Shares in Eastplats gave up 2.6% to close at C$0.74 in Toronto, after having touched C$0.72 earlier in the day – the lowest level since October 2009, when the platinum price was less than $1 300/oz.

The metal, used in jewellery and car exhaust systems, was trading at $1 806/oz on Monday.

‘NOT PLEASED’

Eastplats CEO Ian Rozier made it clear in a conference call to discuss the company’s financial results that he was disappointed with the quarter.

“I am not pleased to report these results,” he said.

However, Rozier pointed out that the company had turned the Crocodile River operation, located near Brits, around before, and he was confident that it could do so again.

“I can assure everybody that we’ll be doing everything we can to get this back on track. We’re in very good shape to be moving forward...the glass is more than half full.”

MAREESBURG

He also talked up the Mareesburg project the company is developing in Mpumalanga as an “extremely low-cost, low-capital expenditure and low operational expenditure” asset.

“It would have to be a catastrophic reduction in commodity prices for us to even reconsider [the project’s development],” Rozier asserted.

Production is set to start in the fourth quarter of next year, to be followed by the Kennedy's Vale mine that Eastplats is building nearby.

“There’s going to be a supply squeeze over the next five years...we want to be producing into that,” he said.

London, Ontario-based law firm Siskinds in June announced it had filed a notice of application claiming C$66-million from Eastplats and certain of its directors, alleging that the company failed to disclose “material changes” at its flagship Crocodile River after production dropped 22% in the first three months of the year.

Eastplats said the action was without merit, and that it would defend itself vigorously against it.
 

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