Eastplats returns to the black

Eastern Platinum returned to profit in the year to end-December on increased revenue and gross margins generated from remining and processing its tailings resources at the Crocodile River Mine (CRM) to produce chrome concentrate and platinum group metals (PGMs) concentrate. 

The Toronto- and JSE-listed miner said on Monday net income attributable to shareholders increased to $13.8m, or $0.08 per share, in the year to end-December after a restated loss of $0.9m, or $0.01 loss per share, in 2022.

The increase in net income was largely attributable to the significant increase in third-party chrome concentrate sales in the period offset by pre-production costs of $2.1m as the company initiated the restart of the Zandfontein underground section at the CRM.

Revenue increased to a record $106.9m from a restated $53.9m the year before, representing a 98.3% increase.

The company generated revenue from processing PGM and chrome concentrates during the fourth quarter and full year, it said in a statement.

Most of the miner’s revenue (about 95% for the full year) is from chrome concentrate sales. Until July 2022, this revenue was based on the Union Goal offtake agreement between subsidiary Barplats Mines and Union Goal Offshore Solution in relation to chrome concentrate production from the retreatment project.

Previously, and until the end of the second quarter of 2022, the retreatment project produced revenue based on tonnes of material made available for processing by remaining and processing the tailings, recovery of certain operational costs and allocation of the upfront cash payment for the offtake of chrome concentrate to Union Goal.

Though the Union Goal offtake agreement remains in place, Union Goal stopped taking shipments of chrome concentrate in June 2022. Since then, chrome revenue has been recognised only through third-party sales of chrome concentrate.

The company also derives PGM revenue under a PGM offtake agreement with Impala Platinum from further processing of tailings materials after the production of chrome concentrates.

The retreatment project is expected to continue operating into late 2024, when the original CRM tailings from the tailings storage facility are expected to be fully processed. The company has initiated the restart of the Zandfontein underground section and is expected to process underground run-of-mine ore in May or June.

The group produced 6,660 PGM 6E ounces in 2023 compared with 8,742 ounces in 2022, it said. Chrome concentrate production was 486,166 tonnes from 602,111 tonnes the previous year.

“We are proud of the results that our chrome and PGM businesses have achieved. The team continues to work hard as the retreatment project comes to an end, turning its focus to ramping up underground tonnages in the Zandfontein underground section at the Crocodile River Mine,” said CEO Wanjin Yang.

“Eastplats remains committed to continuing its operational and cost-efficiency initiatives while being mindful of PGM market price movements.”

In 2024 Easpltas plans to resolve the outstanding receivables and related matters with Union Goal and ramp-up the Zandfontein underground operations.

It also aims to confirm capital plans to support the full reopening of Zandfontein underground operations at the CRM from external or internal sources and complete the second phase of the tailings storage facility capital works programme.

It also intended to continue prospecting and assessment work in relation to Zandfontein, Crocette and Kareespruit sections of the CRM and Kennedy’s Vale and Spitzkop mines at the eastern limb of the Bushveld Complex, it said.

mackenziej@arena.africa