/NOT FOR DISSEMINATION IN THE UNITED STATES OR THROUGH U.S. NEWSWIRE
SERVICES/
Trading Symbol: ELR (TSX); EPS (JSE)
VANCOUVER, Sept. 18, 2017 /CNW/ - Eastern Platinum
Limited ("Eastplats" or the "Company") is pleased to
report that an independent technical report ("ITR"),
including chrome mineral reserve estimate and economic assessment,
by Sound Mining (Pty) Ltd ("Sound Mining") on the Barplats
Zandfontein UG2 tailing storage facility ("TSF") located at
Crocodile River Mine has been completed and is effective
September 1, 2017.
Highlights
- Previously announced mineral resource estimate of 13,680,000
tons at an average grade of 20.72% chromium oxide (see August 11, 2017 news release);
- Mineral reserve estimate of 6,420,000 tons, containing
1,440,000 tons of chromium oxide at an average grade of
22.36%;
- Estimated after-tax net present value of ZAR 42.2 million (US$3.25
million) using 13% discount rate;
- Estimated operating costs of ZAR
71.26/(RoM) (US$5.49) per ton
processed;
- Estimated after-tax internal rate of return of 24% with a 33
month mine life;
- Estimated capital costs for the project of ZAR 219 million (US$16.87
million); and
- Recommendation to prepare platinum group minerals
("PGM") feasibility study.
Diana Hu, CEO commented
"Eastplats is pleased with Sound Mining's confirmation of the
mineral reserves and project economics, which can enable near term
revenue opportunities for the Company. The recommendation to
further investigate the PGM opportunities provides additional
upside for this project creating greater opportunities for
Eastplats and its stakeholders."
Mineral Reserve
A total proven and probable mineral reserve estimate of
approximately 6,420,000 tons of tailings material containing
1,440,000 tons of chromium oxide at an average grade of 22.36%.
Table 1 - Mineral Reserve Estimate as at September 1, 2017
Category
|
Quantity
(Mt)
|
Grade
(%) Cr203
|
Content
(Mt) Cr203
|
Proved Mineral
Reserve
|
6.25
|
22.42
|
1.40
|
Probable Mineral
Reserve
|
0.18
|
20.28
|
0.04
|
Total Mineral
Reserve
|
6.42
|
22.36
|
1.44
|
Notes:
|
|
Cut-off grade of
20.5%;
|
|
Mineral reserves
include mineral resources; mineral resources that are not mineral
reserves do not have demonstrated economic viability; no inferred
mineral resources are included in mineral reserve
estimate;
|
|
PGMs are excluded
from the mineral reserve estimate;
|
|
Material risks
include chrome price fluctuation, politically motivated unrest,
illegal squatting and failure of the TSF wall.
|
The chrome mineral reserve estimate has a high confidence level,
with 97.3% of the estimate falling into the proved category and
2.7% falling into the probable category.
Economic Assessment
Sound Mining is of the opinion that the Company will be able to
get the chrome cost efficiently into the Chinese market, where
demand is the highest. Chrome prices were adjusted as the metals
are sold as a 40% concentrate, and therefore only attract a
percentage of the metal value.
At a free on mine price of ZAR
870.79/t for 40% chrome concentrate, the project could
achieve a cash margin of 10% and an operating margin of 14%.
Average total cost of production after capital, operating cost and
royalties, excluding further exploration drilling, corporate
overhead and financing costs is estimated to be ZAR 110.03/(RoM) ton processed. Sound Mining
added additional contingencies to the operating cost models, as set
out in the ITR.
The net present value of the project, discounted at 13% per
annum, is estimated to be ZAR 42.2
million, with an annualised internal rate of return of 24%
over a 33 month period. The project is forecast to generate a
positive cash flow in month 10 and break-even in month 25. Positive
cash flows averaging ZAR 12.9
million/month, after payment of royalties, are forecast over
the remaining life of mine.
Recommendation
Sound Mining recommends that Eastplats consider a feasibility
study on PGM recovery in the TSF as there may be substantial value
in same.
Qualified Person
The information contained in Table 1 and Table 2 conform to the
requirements of National Instrument 43-101 - Standards of
Disclosure for Mineral Projects ("NI 43-101") and was
prepared and verified by Mr. Vaughn Duke Pr. Eng., PMP, MBA, BSc
Mining Engineering (Hons), who is a qualified person as defined in
NI 43-101. Full details of the methodology used in the
estimation of the chrome mineral reserves, project summary and
economic analysis are set out in a technical report entitled
"ZANDFONTEIN TAILINGS RETREATMENT PROJECT TO RECOVER CHROME" to be
filed on Eastplats' SEDAR profile at www.sedar.com.
The qualified person for the purposes of NI 43-101 who approved
the contents of this news release is Dr Bielin Shi, PhD, MSc,
FAusIMM MAIG.
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 mineral resource and mineral reserve
estimates, the results of the feasibility study and independent
technical report on the TSF, preparation of a PGM feasibility
study, ability to access Chinese market, margins for the project,
actual production costs, net present value and cash flow for the
project. 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,
lower than expected grades and quantities of resources, needs for
additional funding, availability of such additional funding and
that funding will be on acceptable terms, 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