VANCOUVER, BRITISH COLUMBIA--(Marketwired - April 19, 2013) - Eastern Platinum Limited ("Eastplats" or the "Company") (TSX:ELR)(AIM:ELR)(JSE:EPS) reports that due to the continuing negative outlook in the global economic environment, the sustained weakness in PGM pricing and the current operating environment in South Africa, it has decided to suspend funding for the Crocodile River Mine ("CRM") "Development Plan" previously announced on June 12, 2012. The Company will continue to reassess the viability of production at CRM and reinitiate funding for production once conditions support such a decision.
This decision to suspend funding for CRM was influenced by both macro and micro-economic issues. The 2008 financial meltdown and its impact on European car sales resulted in a reduction in platinum demand and this shows no signs of a near term recovery; year-on-year European car sales have declined every single month since October 2011. At CRM, the costs per tonne milled have risen by 82% since the beginning of 2007 and the PGM basket price has fallen by 17% in Rand terms over the same period. Ongoing labour unrest continues to negatively impact productivity throughout the South African mining sector. When taken together, the impact of a stagnant commodity market, the rising costs of mining and decreasing productivity have resulted in it becoming increasingly difficult to justify the continued level of funding required for the CRM development plan.
"Given the stagnation of the European car market together with a continuing resistance to any significant large scale production cuts from the larger producers, we expect that the industry will have to contend with much lower metal prices than previously projected in the short and medium term. Ongoing cost pressure and decreasing productivity in South Africa continue to significantly reduce free cash flow. After a considerable amount of review and evaluation Eastplats sees no merit in depleting the financial resources of the Company in this economic and operating environment," stated Ian Rozier, President and CEO.
Total shares issued and outstanding - 928,187,807
Cautionary Statement on Forward-Looking Information
This press release, which contains certain forward-looking statements, is intended to provide readers with a reasonable basis for assessing the financial performance of the Company. All statements, other than statements of historical fact, are forward-looking statements. The words "believe", "expect", "anticipate", "contemplate", "target", "plan", "intends", "continue", "budget", "estimate", "may", "will", "schedule" and similar expressions identify forward looking statements. These forward-looking statements pertain to assumptions regarding the price of PGMs, fluctuations in currency markets (specifically the Rand and the U.S. dollar), the future funding of the Company's projects, the future development of the Company's projects, the Company's plans for its properties, the anticipated timing for the awarding of tenders, and the accounting policies issued but not yet effective for the Company. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by the Company, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Known and unknown factors could cause actual results to differ materially from those projected in the forward-looking statements. Such factors include, but are not limited to, the risk of fluctuations in the assumed exchange rates of currencies that directly impact the Company, such as Canadian dollar, South African Rand and U.S. dollar, the risk of fluctuations in the assumed prices of PGM and other commodities, the risk of changes in government legislation, taxation, controls, regulations and political or economic developments in Canada, the United States, South Africa, or Barbados or other countries in which the Company carries or may carry on business in the future, risks associated with mining or development activities, the speculative nature of exploration and development, including the risk of obtaining necessary licenses and permits, and assumed quantities or grades of reserves. Many of these uncertainties and contingencies can affect the Company's actual results and could cause actual results to differ materially from those expressed or implied in any forward-looking statements made by, or on behalf of, the Company. Readers are cautioned that forward-looking statements are not guarantees of future performance. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those acknowledged in such statements. Specific reference is made to the Company's most recent Annual Information Form on file with Canadian provincial securities regulatory authorities for a discussion of some of the factors underlying forward-looking statements.
The Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except to the extent required by applicable laws.
No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein.
