Canada-based Eastern Platinum (Eastplats) on March 27 said it and Union Goal Offshore Solution were negotiating and working to finalise and update the framework agreement in several areas after one year of operations.

On March 1, 2018, Eastplats entered into an agreement with Union Goal relating to the construction, re-mining and processing of the tailings resource and offtake of chrome concentrate from the Barplats mines’ tailings facility, which is located at the company’s Crocodile River mine (CRM), in South Africa.

The retreatment project produces revenue based on tons of material made available for processing by re-mining the tailings, recovery of certain operational costs and allocation of the upfront cash payment from Union Goal for the offtake of chrome concentrate.

Up until the end of the financial year ended December 31, the project produced 598 t of chrome concentrate.

Post-period, however, and with the goal to further optimise and increase the chrome recovery of the project, Eastplats began the optimisation project, through which it will invest about R90-million in additional equipment, including installation, to enhance the efficiency of the plant and its processing ability.

The processing is designed to provide increased chrome recovery and grade.

The financing of these costs has been, in principle, agreed with Union Goal on similar loan terms to those contained in the initial framework agreement.

Eastplats has also mobilised a portion of the required construction team at CRM and has begun the construction work on site, including infrastructure and civil works in relation to the chrome plant optimisation.

Meanwhile, during the fourth quarter of 2019, Eastplats decided to refurbish the small-scale platinum group metals circuit D and, in 2020, has successfully produced PGM concentrate.

The company had forecasted a ramping up of production in the second quarter of this year but will need to reassess the situation at the end of the temporary lockdown in South Africa, which began on March 27 and will end on April 16.

As a result of the lockdown, Eastplats has temporarily closed all operations in South Africa, including re-mining operations at CRM, except for some critical underground care and maintenance activities where the company obtained an exception.

Eastplats lamented in a March 27 statement that the lockdown could have material adverse effects on the company’s business, liquidity, cashflows and outlook for this year, as well as its ability to attain targets.

Meanwhile, the company’s targets for this year, which are subject to capital availability, include the completion of the optimisation project for the retreatment project, as well as maximising operating results of the retreatment project and the establishment of the appropriate tailings storage facility Phase 2 capital works programme.

Additionally, the assessment and decision regarding the larger-scale PGM production for the tailings resource is also a target for the year, alongside the assessment of the CRM Zandfontein underground operations, while ensuring the appropriate care and maintenance on all resource properties.

Eastplats also intends to complete the assessment and make a decision regarding its Mareesburg project.

FINANCIAL RESULTS

Moreover, turning towards the full year results for the full year ended December 31, 2019, Eastplats’ revenue increased by 9 378% to $39.2-million, up from $400 000 in the prior corresponding period.

Its operating loss decreased by 91% to $2.4-million, down from $25.7-million in the prior corresponding period.

Its headline loss a share decreased by 67% to $0.03 a share, from $0.09 a share in the prior corresponding period, while it also achieved earnings a share of $0, compared with a loss of $0.24 a share in the prior corresponding period.