Eastplats Suspends Funding for the Crocodile River Mine Development Plan
April 19 2013 - 4:53PM
Marketwired
Eastern Platinum Limited ("Eastplats" or the "Company")
(TSX:ELR)(AIM:ELR)(JSE:EPS) reports that due to the continuing
negative outlook in the global economic environment, the sustained
weakness in PGM pricing and the current operating environment in
South Africa, it has decided to suspend funding for the Crocodile
River Mine ("CRM") "Development Plan" previously announced on June
12, 2012. The Company will continue to reassess the viability of
production at CRM and reinitiate funding for production once
conditions support such a decision.
This decision to suspend funding for CRM was influenced by both
macro and micro-economic issues. The 2008 financial meltdown and
its impact on European car sales resulted in a reduction in
platinum demand and this shows no signs of a near term recovery;
year-on-year European car sales have declined every single month
since October 2011. At CRM, the costs per tonne milled have risen
by 82% since the beginning of 2007 and the PGM basket price has
fallen by 17% in Rand terms over the same period. Ongoing labour
unrest continues to negatively impact productivity throughout the
South African mining sector. When taken together, the impact of a
stagnant commodity market, the rising costs of mining and
decreasing productivity have resulted in it becoming increasingly
difficult to justify the continued level of funding required for
the CRM development plan.
"Given the stagnation of the European car market together with a
continuing resistance to any significant large scale production
cuts from the larger producers, we expect that the industry will
have to contend with much lower metal prices than previously
projected in the short and medium term. Ongoing cost pressure and
decreasing productivity in South Africa continue to significantly
reduce free cash flow. After a considerable amount of review and
evaluation Eastplats sees no merit in depleting the financial
resources of the Company in this economic and operating
environment," stated Ian Rozier, President and CEO.
Total shares issued and outstanding - 928,187,807
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. These
forward-looking statements pertain to assumptions regarding the
price of PGMs, fluctuations in currency markets (specifically the
Rand and the U.S. dollar), the future funding of the Company's
projects, the future development of the Company's projects, the
Company's plans for its properties, the anticipated timing for the
awarding of tenders, and the accounting policies issued but not yet
effective for the Company. 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, the risk
of fluctuations in the assumed exchange rates of currencies that
directly impact the Company, such as Canadian dollar, South African
Rand and U.S. dollar, the risk of fluctuations in the assumed
prices of PGM and other commodities, the risk of 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 assumed 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.
No stock exchange, securities commission or other regulatory
authority has approved or disapproved the information contained
herein.
Contacts: Eastern Platinum Limited Ian Rozier President &
C.E.O. +1-604-685-6851 +1-604-685-6493 (FAX)info@eastplats.com
www.eastplats.com NOMAD Andrew chubb, Ross Allister Canaccord
Genuity Limited, London +44 (0) 207 7523 8000 JSE SPONSOR Johan
Fourie PSG Capital (Pty) Limited +27 21 887
9602johanf@psgcapital.com
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