The company’s cash is dwarfed by its working capital deficit. From Moneyweb.
Auditors for Eastern Platinum (Eastplat) have cast doubts on the company’s ability to continue as a going concern given its cash of just $3.1 million measured against a working capital deficit of $38.7 million.
Most of this deficit is money owed to contract miner Union Goal Offshore Solution for construction, remining and processing of tailings at the Barplats Zandfontein operation. Barplats is 74% owned by Eastplat.
The latest results show a 41.5% drop in revenue to $62.5 million for the year to December 2024 from $106.9 million in 2023. It reported a net loss of $12.7 million for the year to December 2024, reversing the prior year’s profit of $13.8 million.
The troubled chrome and platinum group metals (PGM) company is gasping for oxygen after these latest results blow a hole in an already shrinking balance sheet.
Funding
“Although the company has been successful in raising equity and debt financing in the past, there can be no assurance that additional funding will be available to the company when needed, or, if available, that this funding will be on acceptable terms,” say auditors Davidson & Company.
“These factors and material uncertainties may raise significant doubt about the company’s ability to continue as a going concern.”
Davidson & Company took over as auditors in October 2024 following the resignation of PwC, which in 2022 cautioned that there was material uncertainty that the company would be able to achieve sufficient cash inflows in the next 12-month period to meet expected financial obligations.
The going concern doubts raised by the new auditors come after the British Columbia Securities Commission in Canada imposed a temporary cease trade order on Eastplat for late filing of financial statements. This order was revoked in May 2024.
Activity … and inactivity
Eastplat’s main activities involve the mining of PGMs and chrome processing at Zandfontein, and tailings workings at Crocodile River Mine.
The group’s other projects at Kennedy’s Vale, Spitzkop and Mareesburg – known as the Eastern Limb projects – have been under care and maintenance or hold since 2012.
The company has lacked the financial resources to develop these projects, leaving them sterilised underground.
The Mineral and Petroleum Resources Development Act’s stated purpose is to unlock mining opportunities for communities.
None of these Eastern Limb projects are identified on the balance sheet as held for sale, so it remains uncertain what management intends to do with them.
There are claims – denied by Eastplat – that the Mareesburg mining licence has been unlawfully altered to reflect a 20-year rather than a 12-year mining right.
The Pakaneng community in Mpumalanga claims Eastplat has effectively sterilised its PGM deposit for more than a decade by failing to develop or sell it to another group with the necessary finance and expertise.
Read: Eastplat accused of sterilising community’s mining deposit [Feb 2025]
Prior to this, in 2023, the company said it had received unproven whistleblower allegations of a related party transaction involving chrome concentrate being sold at about half the going market price to Great Wall Enterprise, a company reportedly linked to Dijun Liu, the sister of Eastplat director and 32% shareholder Changyu Liu.
Read: Troubling whistleblower allegations and law suits hit Eastplats [Apr 2023]
Union Goal launched court proceedings against Eastplat in Canada in February 2024 claiming breach of contract and unjust enrichment over a loan extended to the company. The matter has been referred for arbitration.
