Eastern Platinum* (ELR : TSX : $1.48), Net Change: 0.02, % Change: 1.37%, Volume: 6,549,239
Is Temasek watching? Eastplats reported Q4 results as expected, and according to a Bay Street analyst, the company has set up
a solid foundation for a big lift in production and profit for 2010. Eastplats delivered EBITDA at the mine level of US$28.5
million for the year compared to Canaccord Adams’ estimates of US$28.1 million. Mine EBITDA for Q4 therefore was
US$10.0 million compared to Canaccord Adams’ US$9.7 million estimate, with the result being just over double the result from
Q3. Cash costs before chrome were down 6% on average for 2008 and the result benefitted from a US$4.5 million contribution
from re-pricing provisional sales. Net profit for the year came in at US$5.6 million with EPS at US$0.01/share in line with the
consensus estimate and above. Highlights for the quarter were: 1) a contribution of US$28.5 million from Crocodile River Mine
(CRM) came from a difficult year in which the basket price received by EastPlats for PGMs in concentrate was down 42% from
US$1,255/oz to US$723/oz yet mine EBITDA was down just US$6.2m year over year; 2) cash costs before chrome credits were
down an estimated 6% year over year from US$674/oz to US$636/oz; and 3) once the chrome credits are accounted for, another
strong initiative by EasPlats management, cash costs for PGMs were down 16% from US$622/oz to an estimated US$521/oz.
Chrome sales have become an important part of Eastern Platinum’s revenue now that it is being removed from the PGM
concentrate stream. Looking forward, Canaccord Adams Mining Analyst Damien Hackett estimates PGM production for 2010
at 144,000 ozs, up 10%, mine EBITDA for the year at US$71 million and net profit of US$27 million, equivalent to
US$0.04/share. In case you missed it, Temasek Holdings, Singapore's sovereign wealth fund, announced it will purchase a
US$100 million convertible debenture in Platmin (PPN) this week. Upon conversion a little more than 82.3 million shares will
be issued to Temasek. Earlier this month, Temasek said it wanted to increase its exposure to mining in Mongolia and is also
looking for opportunities to invest in the mining sector in Africa.