| Wed 13 Jun 2012, 8:16 | | EPS - Eastern Platinum Limited - Eastplats reports proposed development plan |
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EPS
EPS
EPS - Eastern Platinum Limited - Eastplats reports proposed development plan
for Crocodile River Mine
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
June 12, 2012
Trading Symbol: ELR (TSX & AIM) EPS (JSE)
NEWS RELEASE
EASTPLATS REPORTS PROPOSED DEVELOPMENT PLAN
FOR CROCODILE RIVER MINE
Eastern Platinum Limited ("Eastplats" or the "Company") reports a review of
funding for all its South African mining operations based on the current
economic environment has been completed. Management at the Crocodile River
Mine ("CRM") has thoroughly analysed its mining operations and proposes to
implement a comprehensive mine development plan to reduce costs and improve
efficiencies. The proposed plan would involve extensive underground
development resulting in reduced stoping production and increased "on-reef"
development in the near term, leading to significant increases in mineable
reserves, production, and operating flexibility in the medium and long-term.
As reported in the Company`s news release dated May 30, 2012 ("Eastplats
Suspends Funding for the Mareesburg/KV Project"), the review of all the
Company`s mining and development projects was conducted in response to
continuing cost pressures combined with depressed metal prices and negative
industry outlook for a near-term recovery.
There have been encouraging improvements in production at CRM, particularly
from the Zandfontein section. However, as a result of continued issues
facing the industry, the Company proposes to temporarily suspend stoping at
Zandfontein and embark on a 12 to 18 month development program. This program
will focus on "on-reef" development by "wide raising/winzing" in preparation
for increased future stoping production, as well as "off-reef" development
of the new service decline and the 5, 6 and 7-level footwall drives. Over
18 months, this plan would result in the completion of up to 28 raise lines
available for mining as well as providing production of UG2 reef for plant
feed. Additionally, cleaning, sweeping and vamping of previously mined
areas will be maximized, along with the reclamation of material and
equipment from "back-areas". Combined with the continued construction and
equipping of underground infrastructure and the new chairlift-conveyor, this
development plan would provide the necessary stope availability to sustain
significantly greater production levels over the long term with lower unit
costs. Additionally, the deeper levels of the mine will be developed for
production securing the long-term future of the operation. Should there be
a marked improvement in industry conditions in the interim, CRM can react
quickly and ramp up production at Zandfontein at any time.
At the Maroelabult section, it is proposed to continue "on-reef" mining
operations, along with the development of major conveyor development ends,
with the objective of achieving a sustainable production target of 30,000
tpm.
The concentrator at CRM has two streams and its operation would be optimized
to suit the revised production tonnages, utilizing one stream for "Run-of-
Mine" material only, and the secondary circuit handling "re-mined" tonnes
from the tailings dam.
Overhead and administrative costs across the Company`s operations would also
be targeted for reduction, and non-critical capital expenditures would be
deferred to beyond 2013.
In keeping with the South African Labour Relations Act, CRM management will
commence the required consultation process with potentially affected
employees and their representatives to review the need for possible
restructuring and the potential implications to staffing levels as a result
of the proposed plan.
The capital expenditure required to implement the proposed development plan
would be funded by cash generated from "on-reef" mining operations at both
Zandfontein and Maroelabult, cash on hand, and the sale of mining equipment
and real estate assets owned by CRM that are surplus to requirements.
Following the consultation period and final costing exercise to be conducted
over the next 30 days, the Company will be in a position to provide guidance
for production for both 2012 and 2013.
As a result of the Company`s decision 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 has
terminated the Facilities Agreement dated December 30, 2011 with UniCredit
Bank AG, London Branch and Standard Finance (Isle of Man) Limited (a
subsidiary of Standard Bank Group Limited) for the US$100 million financing
package that was to be used to part fund the development costs of the
Project. The Company and the banks have agreed to investigate the
restructuring of the financing package when the Project is restarted.
"We are committed to the ongoing operation and accelerated development of
CRM in the near-term in order to maintain its potential as a safe,
sustainable and profitable mine in the medium and long-term, and at the same
time, safeguard our cash resources and overall business interests; this
development plan would achieve these objectives and would provide us with
enormous operational flexibility going forward", stated Ian Rozier, CEO of
Eastplats.
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: 13/06/2012 08:16:25 Produced by the JSE SENS Department.
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