Eastplats files audited annual consolidated financial statements

VANCOUVER (miningweekly.com) – Embattled platinum development company Eastern Platinum (Eastplats) on Wednesday filed its audited annual consolidated financial statements for 2016 after completing an investigation into certain transactions entered into by the former management.

The Vancouver-based company, with platinum group metals assets in South Africa, said it was now satisfied that the financial statements and associated filings accurately reflect the financial position of the company. The company’s TSX-V-listed stock remains subject to a cease-trade order owing to it having missed the reporting deadline.

Eastplats said it will seek further advice from its legal counsel and evaluate its options and any action that the company may consider appropriate. The investigation results provided the auditors sufficient information to allow them to complete the 2016 audit, it added.

The investigation was launched following the removal of the former Eastplats board in July 2016. It included a review of the proposed sale of Barplats Mines, which holds the Crocodile River mine, to Hebei Zhongheng Tianda Platinum (HZT) for $50-million.

In December, HZT hit Eastplats and several of its subsidiaries with a notice of civil claim in the British Columbia Supreme Court over an alleged repudiation and breach of a share purchase agreement entered into between Eastplats’ former management and HZT in June 2016.

Barplats’ shareholders in February rejected the deal.

In its response, Eastplats is seeking to have the HZT claim dismissed. On March 20, the company amended its response to the HZT civil claim asserting that, in light of the failure to obtain approval of the shareholders of BIL, the conditions precedent to completion under the CRM purchase agreement cannot be met and as a result the purported agreement is at an end and the company has no continuing obligations thereunder, and the claim ought to be dismissed with costs against HZT.

Further, Eastplats views the $5-million break-fee deposited into escrow as refundable as the conditions precedent of the CRM purchase agreement cannot be met, but the company is unable to have the funds released without the consent of HZT or court direction.

Meanwhile, British Virgin Islands company AlphaGlobal Capital in April sought to have Eastplats wound up over what it said was Eastplats’ inability to pay its debts. Eastplats denied the allegation, saying the $2.25-million promissory note has prescribed.

As at March 31, Eastplats had cash, cash equivalents and short term investments of $23.9-million, a decrease of $2.33-million from $26.24-illion as at December 31, 2016. The company recorded a loss attributable to equity shareholders of $2.03-million, or $0.02 a share in the first quarter, compared with a loss of $4.61-million, or $0.05 a share, in the comparable period of 2016.