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SERVICES/
Trading Symbol: ELR (TSX); EPS (JSE)
VANCOUVER, May 16, 2017 /CNW/ - Eastern Platinum Limited
("Eastplats" or the "Company") is pleased to provide
this summary update with respect to status of its financial
statements and associated filings, operational activities and
certain legal proceedings involving the Company.
Status of Annual Financial Statements and Q1 Interim
Financial Statements Filings
As required by the reporting requirements under the temporary
management cease trade order (the "MCTO") issued to the Company
under National Policy 12-203 ("NP 12-203") as discussed in our
press release of April 5, 2017, the
Company reports that this stage of the investigation into certain
transactions entered into by former management of the Company is
nearing completion. The Company anticipates that it will be
able to file its 2016 Audited Consolidated Financial Statements and
associated filings ("2016 Annual Filings") within the next two
weeks.
As a result of the delay in filing its 2016 Annual Filings, the
Company will also be delayed in filing its condensed interim
consolidated financial statements for the period ended March 31, 2017 and associated Management's
Discussion and Analysis (collectively, the "Q1 Filings") which were
otherwise required to be filed by May
15, 2017. It is anticipated that the Q1 Filings will
be made shortly after the filing of the 2016 Annual Filings.
The Company reports that, except as otherwise disclosed in the
Company's news releases of April 13,
May 2, May12, 2017 and this news
release, there have been no material changes required to be
disclosed under NP 12-203. The Company confirms there have
been no failures by it in fulfilling its stated intentions with
respect to satisfying the provisions of the alternative information
guidelines under NP 12-203, and there has not been, nor, except
with respect to the Q1 Filings, is there anticipated to be, any
specified default subsequent to the default announced in the
Company's news release of April 5,
2017.
Operational update on Crocodile River Mine
Crocodile River mine ("CRM") comprises the Company's PGM mineral
rights located on the eastern portion of the western limb of the
Bushveld Complex, in the North West Province, South Africa.
During the previous months, the Company has enacted its 2017
capital plan for a portion of the CRM processing plant as well as
work on the resource and reserve determination of the CRM tailings
storage area. The Company is investigating options for
re-mining the tailings storage area at the CRM which includes both
metallurgical and mining test work and engineering design and
refurbishing of the CRM processing facility.
The work of mineral resources and reserves estimation of CRM
tailings storage area is in progress under the direction of SRK
Consulting. The Company will provide further updates on the
above program as more information is available, Diana Hu, President and Chief Executive Officer
of the Company stated "We are very pleased to be developing CRM and
look forward to updating the shareholders on all our operational
activities and progress during 2017."
Summary Financial Update
Despite the delay in the filing of its financial statements, the
Company continues to manage its principal properties on a care and
maintenance basis pending improvement in the market outlook or
further development opportunities arising based on the Company's
ongoing re-assessment of its portfolio of properties. The
Company has continued to manage its care and maintenance costs
resulting in an overall reduction during 2016. Care and
maintenance cost in 2016 were US$7,064,000 compared to US$11,392,000 for the prior year. The
Company also remains well-financed to continue with its current
operations with cash, cash equivalents and short term investments
as of March 31, 2017 of US$23,909,000 and current liabilities of
US$1,734,000. Further details
regarding the Company's financial results and condition will be
available at the time it files its 2016 Annual Filings and Q1
Filings.
Litigation updates
On March 20, 2017, the Company
filed an Amended Response to the legal proceeding initiated in the
British Columbia Supreme Court by Hebei Zhongheng Tianda Platinum
Co. Limited ("HZT"). In its Amended Response, the Company
continues to reserve the right to challenge the validity and
enforceability of the Share Purchase Agreement dated June 28, 2016 (the "Share Purchase Agreement")
with respect to the Crocodile River Mine ("CRM"). In the
alternative, the Company asserted, among other things, that in
light of the failure to obtain approval of the shareholders of
Barplats Investments Limited, the conditions precedent to
completion of the transactions contemplated under the Share
Purchase Agreement, cannot be met and will not be waived by the
Company, and as a result the transactions contemplated under that
agreement cannot proceed. The Company also asserted that it
did not consider it had continuing obligations to take steps in
furtherance of the transactions contemplated in the Share Purchase
Agreement. In addition, Responses were also filed by the
Company's subsidiaries which were also served by HZT in the above
action asserting, among other things, that the BC Supreme Court did
not have or is not the proper jurisdiction for any claim against
them and otherwise adopted the position taken by the Company in its
Amended Response. Pending a further ruling of the Court or
other resolution, the Company and its subsidiaries will continue to
vigorously defend the claim filed by HZT.
On May 12, 2017, the Company also
served its response to the claim filed by Alpha Global Capital Inc.
("Alpha Global") in the High Court of South Africa. In its
claim, Alpha Global is seeking relief under a unique provision of
South African company legislation contemplating that a South
African court may make an order to wind up an "external company"
registered in South Africa on the
basis that it is just and equitable to do so or that it is unable
to pay its debts. Alpha Global has asserted that it is
entitled to bring its action on the basis that an alleged default
occurred under a promissory note originally issued in 2007 and that
it is now entitled to approximately ZAR 31
million plus default interest.
In its response, the Company has denied Alpha Global's
allegations, in particular as to the Company's solvency or the
state of its business. The Company also refuted that Alpha
Global has legal standing to bring its action under the above
provision since, even based on the facts as asserted by Alpha
Global, the claim under the Note has prescribed and no amount is
currently owing to it. The Company has also asserted that if
there is any dispute as to Alpha Global's status as a creditor of
the Company to whom money is owed, that this is a matter for the
Courts of the British Virgin's Island to decide, being the law
under which the parties agreed the Note was to be governed and
interpreted. The Company has asked in its papers for Alpha
Global's claim to be dismissed with costs.
Cautionary Statement Regarding Forward-Looking
Information
This press release contains "forward-looking statements" or
"forward-looking information" (collectively referred to herein as
"forward-looking statements") within the meaning of
applicable securities legislation. Such forward-looking
statements include, without limitation, forecasts, estimates,
expectations and objectives for future operations that are subject
to a number of assumptions, risks and uncertainties, many of which
are beyond the control of the Company. Forward-looking
statements are statements that are not historical facts and are
generally, but not always, identified by the words "will", "plan",
"intends", "may", "will", "could", "expects", "anticipates" and
similar expressions. Further disclosure of the risks and
uncertainties facing the Company and other forward looking
statements are discussed in the Company's Annual Information Form
and Management's Discussion and Analysis which are available under
the Company's profile on www.sedar.com.
In particular, this press release contains forward-looking
statements pertaining to: the filing of the 2016 Annual Filings and
Q1 Filings, the development of CRM, the HZT agreement and claim and
the Alpha Global claim. These forward-looking statements are
based on assumptions made by and information currently available to
the Company. Although management considers these assumptions
to be reasonable based on information currently available to it,
they may prove to be incorrect. By their very nature,
forward-looking statements involve inherent risks and uncertainties
and readers are cautioned not to place undue reliance on these
statements as a number of factors could cause actual results to
differ materially from the beliefs, plans, objectives,
expectations, estimates and intentions expressed in such
forward-looking statements. These factors include, but are
not limited to, commodity prices, economic conditions, currency
fluctuations, competition and regulations, legal proceedings and
risks related to operations in foreign countries.
The forward-looking statements in this press release are made as
of the date they are given and, except as required by applicable
securities laws, the Company disclaims any intention or obligation
to publicly update or revise any forward-looking statements,
whether as a result of new information, future events or
otherwise.
No stock exchange, securities commission or other
regulatory authority has approved or disapproved the information
contained herein.
SOURCE Eastern Platinum Limited