| Thu 31 May 2012, 8:04 | | EPS - Eastern Platinum Limited - News release Eastplats suspends funding for |
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EPS
EPS
EPS - Eastern Platinum Limited - News release Eastplats suspends funding for
the Mareesburg/KV Project
EASTERN PLATINUM LIMITED
(Incorporated in Canada)
(Canadian Registration number BC0722783)
(South African Registration number 2007/006318/10)
Share Code TSX: ELR ISIN: CA 2768551038
Share Code AIM: ELR ISIN: CA 2768551038
Share Code JSE: EPS ISIN: CA 2768551038
May 30, 2012
Trading Symbol: ELR (TSX & AIM) EPS (JSE)
NEWS RELEASE
EASTPLATS SUSPENDS FUNDING FOR THE MAREESBURG/KV PROJECT
Eastern Platinum Limited ("Eastplats" or the "Company") reports that due to
the continuing negative changes in the global economic environment and the
operating environment in South Africa, it has decided to suspend funding for
the ongoing development of the Mareesburg open pit mine and construction of
the Kennedy`s Vale Concentrator Plant (the "Project"). The Company will
reassess the project economics as and when a sustained recovery in the
global economic environment and metals prices takes place.
The Project was progressing according to the planned schedule and budget
with initial commissioning planned for the first quarter of 2013. Civil
works are largely complete and concrete work is well advanced. Almost all
the necessary process equipment has been procured and received. Engineering
is over 90% complete with construction about 20% complete. The overall
project is 30% complete and a rapid restart of project construction could
take place when conditions warrant.
The pricing of PGMs has declined significantly since the decision was made
to develop the project nine months ago, with little or no fundamental demand
recovery or supply reduction forecast in the near to medium term. With the
ongoing weakness and volatility in the global financial markets
(particularly in Europe which consumes approximately 50% of South Africa`s
platinum production), the Company is of the view that a near term recovery
in PGM prices to sustainably appropriate levels is unlikely. In addition,
the South African PGM industry is dealing with a number of other
predominating economic factors, including unrelenting operating cost
inflation, adverse currency exchange rates, weak chrome prices, heightened
concerns with respect to reliable power delivery and unplanned and unlawful
labour actions.
In the current operating environment, the financial risk of continued
project development is not merited and Eastplats has taken the decision to
suspend the Project funding so as to maintain the value in the resources
planned to be mined. The Project will be monitored subject to a sustainable
strengthening of metal prices and improvement in operating conditions in
South Africa.
"These factors, and particularly the continued cost pressures that we are
experiencing in South Africa, make the platinum sector an extremely
difficult space in which to operate. We do not envisage any significant
large scale production cuts from the larger producers and consequently
expect that the industry will have to contend with much lower metal prices
than previously projected in the medium term. As the open pit operation at
Mareesburg was previously projected to provide a significant contribution to
revenue in the near term, we see no merit in depleting the deposit and the
financial resources of the Company until such time as economic and operating
conditions markedly improve. After a considerable amount of review and
evaluation Eastplats has been proactive in taking this action in the
interests of maximizing the value of the PGM resources in the Company",
stated Ian Rozier, President and CEO.
The Company continues to review its overall mining operations at CRM in
order to mitigate the impact of depressed prices and to safeguard its
business and cash resources. As mentioned in the Company`s first quarter
financial statements, the performance of the mining contractor, JIC Mining
Services, at the Maroelabult section of CRM, is also being reviewed.
The qualified person having reviewed the operating disclosures presented in
this press release is Mr. Brian Montpellier, P.Eng.
Total shares issued and outstanding: 928,187,807
For further information contact:
Investor Relations
Website: www.eastplats.com
Email: info@eastplats.com
Tel: 1-(604)-685-6851, Fax: 1-(604)-685-6493
NOMAD:
Rob Collins
Canaccord Genuity Limited, London
Tel: +44 (0) 207 7523 8000
JSE SPONSOR:
Johan Fourie
PSG Capital (Pty) Limited
Email: johanf@psgcapital.com
Tel: +27 21 887 9602
No stock exchange, securities commission or other regulatory authority has
approved or disapproved the information contained herein.
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.
Date: 31/05/2012 08:04:01 Produced by the JSE SENS Department.
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