Eastplats investigation nearing completion

VANCOUVER (miningweekly.com) – An investigation into the dealings of the ousted management of TSX- and JSE-listed Eastern Platinum (Eastplats) is drawing to a close, which will allow the company to file its 2016 audited financial statement within the next two weeks.

The South Africa-focused miner missed the March 31 deadline to file its statements for the financial year ended December 31, as investigations into transactions entered into by former management dragged on.

The Vancouver-based company has placed its South Africa-based assets on care and maintenance pending improvement in the platinum market outlook, or possible strategic alternatives.

The company has been investigating the proposed sale of Eastplats’ Barplats Mines, which holds the Crocodile River mine (CRM), to China-based precious metals mining services provider Hebei Zhongheng Tianda Platinum (HZT) for $50-million ahead of a proxy contest last July that removed the entire incumbent board.

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.

Eastplats said on Tuesday that it was continuing its review and investigation of its rights and obligations and attending to the satisfaction of its covenants under the agreement, which had not been completed or formally terminated.

Barplats Investments’ shareholders had rejected the sale.

Further, Eastplats had on Friday filed its response to a claim filed by British Virgin Islands-based creditor Alpha Global Capital in the High Court of South Africa, refuting Alpha’s assertion that it is entitled to bring its action to wind-up Eastplats under a provision of South African law on the basis that an alleged default occurred under a promissory note originally issued in 2007, and that it is now entitled to about R31-million plus default interest.

In its response, Eatplats has denied Alpha’s allegations regarding the company's solvency or the state of its business. The company also contested that Alpha has legal standing to bring its action under the above provision since, even based on the facts as asserted by Alpha, the claim under the note has prescribed and no amount is currently owing to it. 

Easplats also pointed out that the note was written under British Virgin Islands law, meaning that if there is any dispute as to Alpha’s status as a creditor of the company to whom money is owed,t his is a matter for the courts of that jurisdiction.

Eastplats has requested that Alpha’s claim to be dismissed with costs.

ASSET DEVELOPMENT
Meanwhile, the company is implementing its 2017 capital plan for a portion of the flagship  CRM processing plant as well as work on the resource and reserve determination of the CRM tailings storage area. Eastplats is investigating options for re-mining the tailings storage area at the CRM, which includes both metallurgical and mining testwork and engineering design and refurbishing of the CRM processing facility.

SRK Consulting is undertaking the mineral resource and reserve estimation for the tailings facility.

Eastplats stated that it remains well-financed to continue with its current operations with cash, cash equivalents and short term investments as of March 31, of $24-million and current liabilities of $1.73-million.