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Update On Financial Statement Filings, Crm Operations, Summary Financial Information And Outstanding Litigation
EASTERN PLATINUM LIMITED
(Incorporated in Canada)
(Canadian Registration number BC0722783)
(South African Registration number 2007/006318/10)
Share Code TSX: ELR ISIN: CA2768555096
Share Code JSE: EPS ISIN: CA2768555096
(“Eastplats” or the “Company” or “the Group”)
May 16, 2017
Trading Symbol: ELR (TSX); EPS (JSE)
NEWS RELEASE
EASTPLATS PROVIDES UPDATE ON FINANCIAL STATEMENT FILINGS, CRM
OPERATIONS, SUMMARY FINANCIAL INFORMATION AND OUTSTANDING
LITIGATION
May 16, 2017, Vancouver, British Columbia – 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.
For further information, please contact:
EASTERN PLATINUM LIMITED
Rowland Wallenius, Chief Financial Officer
rwallenius@eastplats.com (email)
(604) 800-8200 (phone)
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.
NOT FOR DISSEMINATION IN THE UNITED STATES OR THROUGH U.S. NEWSWIRE SERVICES
JSE Sponsor:
PSG Capital
Date: 17/05/2017 08:35:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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