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» JSE:EASTERN PLATINUM LIMITED:
1599c 5%

Eastplats swings to profit in Q1
Allan Seccombe
Posted: Thu, 15 May 2008

[miningmx.com] -- EASTERN Platinum forecast reduced full-year production of 128,500 oz because of power constraints in South Africa after a first quarter in which sales rose 4.5% and pushed up revenues already bolstered by higher metal prices.

“As a result of the power issues in South Africa and the Company’s current expectations of future availability and reliability of power, the Company now estimates that production will be 128,500 PGM (5PGE+Au) ounces in 2008,” Eastplats said in a statement accompanying its March quarter results.

The power outage in January and closure of mines combined with the slow build up to near-normal levels of power supply knocked 6,000 oz of PGMs out of the company’s production.

Eastplats posted net earnings of $20m in the quarter against a $10m loss in the same period last year.

Eastplats spend $15m on its Crocodile River Mine (CRM) during the quarter, including re-equipping and refurbishing the Zandfontein vertical shaft, which will be commissioned in the June 2008 quarter.

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Underground development has started at the Crocette section of Crocodile River, and this will build up to full production by June 2010, adding 55,000 PGM oz/year.

Eastplats has working capital of $194m, and expects “significant cash flows” from its production over the next two years as well as income from the exercise of warrants expiring in 2009.

“A significant part of the cash required for the Company to develop the Crocette deposit at CRM and the Spitzkop and Mareesburg projects can be funded,” the company said.

“However, the Company may require additional funding in order to bring all these projects into commercial production. Additional funding may include external financing, joint venture or other third party participation in one or more of the projects, or the public or private sales of equity or debt securities of the Company.”

If the platinum market turns south, Eastplats warned it might have to delay or scale back the growth projects.