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Eastplats gets funding to restart Zandfontein section of Crocodile River Mine

Eastplats gets funding to restart Zandfontein section of Crocodile River Mine

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Eastern Platinum (Eastplats) has signed a finance facility agreement with Investec Bank for working capital purposes and funding the restart of the Zandfontein underground section of its flagship Crocodile River Mine, located near Brits.

According to the group, the maximum size of the credit facility is R150 million.

The interest rate is subject to the credit quality of the platinum group metals (PGM) off-taker on an annual basis.

The Canadian- and JSE-listed group said the finance facility includes a renewable 12-month revolving commodity finance facility secured by platinum group metal production from the tailings storage facility at the Crocodile River Mine.

“The finance facility will also provide guaranteed prices through a fixed-price swop hedge overlay on platinum, palladium, rhodium, and gold (4E) minerals,” the group said.

The company will also receive an immediate payout on the PGM concentrate delivery date.

According to Eastplats, operations at the Crocodile River Mine currently include re-mining and processing its tailings resource to produce PGM and chrome concentrates from the Barplats Zandfontein tailings dam.

Eastplats owns, directly and indirectly, a number of platinum group metals and chrome assets in South Africa. All the company’s properties are situated on the western and eastern limbs of the Bushveld Complex, the geological environment that hosts approximately 80% of the world’s PGM-bearing ore.

Eastplats stopped production at its Crocodile River Mine at the end of July 2013 due to the stagnant global economic outlook, weak PGM pricing, and hostile labour relations. It resumed operations in 2018 at its chrome facilities and is processing platinum group metals from the same processing circuit.

In its latest results, released last month, Eastplats said its revenue for the second quarter of 2022 increased to $20.5 million, representing a 2.5% increase.

Mine operating income increased by 25.2% to $4.2m, resulting in an improved gross margin of 20.3% from 16.6% in the previous year.

At the time, the group said it would raise capital to restart Zandfontein underground operations and complete the second phase of the tailings storage facility capital works programme.

It said it would also continue prospecting and assessment work in relation to the Zandfontein, Crocette, and Spitzkop ore bodies.

BUSINESS REPORT

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