Eastern Platinum (Eastplats) has announced it has approved and the Company has executed updated Retreatment Project Agreements.
The Company, its subsidiary Barplats Mines (Barplats) and Union Goal Offshore Solution signed the original agreements in 2018.
Operations at the Crocodile River Mine include re-mining and processing its tailings resource, with an offtake of the chrome concentrate to Union Goal from the Barplats Zandfontein UG2 tailings facility.
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The Company recently reported a review of the Retreatment Project operations for 2019 and 2020. This review highlighted the excellent operating results achieved. The updated Retreatment Project Agreements capitalize on two years of operating knowledge and Eastplats continued commitment to the long-term benefits of the Retreatant Project.
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Diana Hu, President and Chief Executive Officer of Eastplats comments:
“The Retreatment Project and the magnetic separation technology utilized have transformed Eastplats, from a company with potential but no operations or cashflows, into a resource company generating revenue and mining operation income from chrome concentrate, PGM operations and revenue, and multiple project opportunities for 2021 and beyond.”
The benefits are summarized as follows:
- Formalized the 2019 agreed rate per ton of R40.26/ ton (29% increase in the recovery rate);
- Update of the rate charged on each ton re-mined and linking that to annual South African CPI increases, the rate for 2020 was R41.87/ ton and based on the SA CPI adjustment for 2021 is R43.17/ ton;
- Recognition of the total capital recovery of the project required by Barplats, which includes the original capital estimated and provides for a future determination on how this recovery can be achieved;
- Incorporation of the optimization program requirements;
- Extension of the due date of the construction loan and the equipment payment to 210 days following the commissioning of the optimized equipment and circuits, which are currently delayed due to COVID-19, (allowing additional time for assessment and determining best corporate option);
- Incorporation of the optimization equipment purchase on the same updated deferred terms as the original equipment;
- Provided additional loan capacity to recognize the original loan amount and the optimization loan amount required and updated with the deferred repayment terms;
- Removal of all the interest on the outstanding amounts due to COVID-19 delays (additional savings);
- Updated warranties on all the optimized equipment;
- Clearer language regarding the future use of all the Retreatment Project technology and equipment in other South African projects;
- Improved notice requirements regarding the potential reprocessing of tailings at the end of the project; and
- Cancelation of the 2018 escrow agreement based on the two-year operational history.