Eastplats shares surge as it expects a fourfold rise in its output
JOHANNESBURG - CANADIAN and JSE-listed Eastern Platinum (Eastplats) surged 11 percent on the JSE yesterday following news that it was expecting a fourfold production improvement and a boost to revenue when it completes the next phase of upgrades to its processing plant.
The share rose 11.09 percent to close at R4.91 on the JSE yesterday.
Vancouver-based Eastplats said in a statement yesterday that the next phase of Platinum Group Metals (PGM) main circuit work was scheduled to start in May, with commissioning expected in October. “The company estimates this will add a further 800 tons of PGM concentrate per month to production, thereby increasing production fourfold and continuing to grow Eastplats’ revenue,” the company said.
Eastplats reported a 43 percent growth in revenue for the year ended December 2020, of $56.1 million (R818.75m) compared to $39.2m in the prior year on the strong operating results from the Retreatment Project.
Eastplats said it had recently completed the reconfiguring and optimisation of the PGM Circuit D, which also included funding for some of the initial work required to restart the main PGM plant circuit. The group, which sells concentrate to Impala Platinum, said following the completion of the work it had generated 111 tons of PGM concentrates and delivered about 64 dry tons under the existing off-take agreement with Impala.
Eastplats stopped production at its Crocodile River Mine at the end of July 2013 due to the stagnant global economic outlook, weak PGM pricing and hostile labour relations. It resumed operations in 2018 at its chrome facilities and is processing PGMs from the same processing circuit.
The group said it had appointed Wylie Hui as the new chief financial officer to succeed Rowland Wallenius, who would be leaving the company to pursue other opportunities. Hui has 25 years of financial and operations experience, serving international firms Ernst & Young and BDO.
Chief executive Diana Hu said the group looked forward to Hui’s contributions as the company obtained benefits of investing in platinum group metals and further developed other projects in South Africa. “Wylie brings the right experience to Eastplats at this important juncture as we expand operations and continue growth,” Hu said. In terms of the Covid-19 pandemic, Eastplats said the Retreatment Project remained in full operation and continued to produce and transport chrome and PGM end products.
“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 cash flows,” the group said.