The rights will be listed and posted for trading on the Toronto Stock Exchange under the symbol ELR.RT on a when issued basis, and the Johannesburg Stock Exchange (the JSE) under the symbol EPSN at 9 a.m. SAST on Dec. 15, 2020. The rights offering will close at 12 p.m. in South Africa and 2 p.m. Vancouver time/5 p.m. Toronto time on Jan. 22, 2021, after which time unexercised rights will be void and of no value.

The rights will be issued only to shareholders on the record date who are resident in a province or territory of Canada or in South Africa. Shareholders will be presumed to be resident in the place shown on the corporate share registry or securities register (as the case may be), unless the contrary is shown to the company’s satisfaction. Neither the offering notice (defined below), nor the rights offering circular (defined below) is to be construed as an offering of the rights, and the common shares issuable upon exercise of the rights are not offered for sale in any jurisdiction outside of the eligible jurisdictions, including in the United States, or to any shareholders who are resident in any jurisdiction other than the eligible jurisdictions. Details of the rights offering will be set out in the rights offering notice and rights offering circular, which will be available from today under the company’s profile at SEDAR and on the company’s website.

The company currently has 100,639,032 common shares issued. If all rights issued under the rights offering are validly exercised, an additional 100,639,032 common shares will be issued. The company is pleased to provide all the existing shareholders of Eastplats an opportunity to directly finance the capital investment required to take advantage of the proposed opportunities. The company intends to use the net proceeds of the rights offering, subject to the results of the amount raised, on capital projects (focused on platinum group metals (PGM) opportunities) expected to be completed during 2021 and, if sufficient funds are raised, on secondary projects, which are expected to begin in 2021, but which are not expected to be completed until the following year. The company forecasts it has sufficient working capital to continue with its current operations in 2021, subject to the retreatment project option and loan assessment occurring in 2022.

The company expects to use the net proceeds from the rights offering to commence and/or complete, subject to the net proceeds from the rights offering, the following:

• Upgrades and repairs to the Zandfontein underground shaft and the rock winder to ensure they are available for PGM operations;
• Purchase and install filter press and additional standby pumps for the PGM circuit D operations, which are intended to stabilize and enhance the PGM recovery and sales from circuit D;
• Refurbishment of the existing main PGM facility (circuit 1) to increase the capacity and recovery opportunity of PGM recovery and sales;
• Mareesburg project environmental work following the completion of the environmental impact assessment (EIA);
• Prospecting and assessment work in relation to Zandfontein, Crocette and Spitzkop orebodies;
• Feasibility and assessment work in regard to a vertical furnace and pelletizer of chrome concentrate;
• Refurbishment of the existing main PGM facility (circuit 2) to further increase the capacity and recovery opportunity of PGM recovery and sales;
• Crocodile River mine underground assessment, including all chrome recovery activities in relation to the retreatment project;
• Zandfontein underground start-up investment;
• Mareesburg project start-up, infrastructure and buildout, subject to environmental and economic confirmation;
• Additional feasibility and EIA work on the various mining rights;
• Capital requirements for care and maintenance, working capital, and general and administrative costs.

Shareholders holding common shares listed on the Toronto Stock Exchange

The notice of rights offering and accompanying rights certificate will be mailed to each shareholder of the company resident in the provinces and territories of Canada as at the record date. Registered shareholders who wish to exercise their rights must forward the completed rights certificate, together with the applicable funds, to the rights agent, Computershare Investor Services Inc., on or before the expiry time. Shareholders who own their common shares through an intermediary, such as a bank, trust company, securities dealer or broker, will receive materials and instructions from their intermediary.

Each ineligible holder will be sent a letter describing how ineligible holders may, in the company’s discretion, participate in the rights offering, provided such ineligible holder satisfies the company that, among other things, the distribution to and exercise by such ineligible holder of the rights in the rights offering: (i) are not unlawful; and (ii) are exempt from any prospectus or similar filing requirement under the laws applicable to such ineligible holder or the laws of such ineligible holder’s place of residence and do not require obtaining any approvals of a regulatory authority in such ineligible holder’s place of residence. The notice to ineligible shareholders will have attached a form of exempt purchaser status certificate to this effect.

Brokers cannot exercise the rights on behalf of beneficial ineligible holders of common shares, unless the ineligible holder has completed an exempt purchaser status certificate and has provided same to the company through the applicable broker.

Shareholders holding common shares listed on the JSE

Eligible holders of certificated common shares will be sent a form of instruction in respect of their letters of allocation. Eligible holders of certificated common shares who exercise their rights must complete the form of instruction in accordance with the instructions contained therein and lodge it, together with the amount due in rand, with the Link Market Services South Africa Pty. Ltd. on or before the expiry time.

Eligible holders of dematerialized common shares who wish to exercise their rights must notify their CSDP or broker of their acceptance of the offering in the manner and time stipulated in their custody agreement with their CSDP or broker.

Ineligible holders of certificated common shares will be sent a letter advising them that their letters of allocation will be issued to, and held on their behalf by, the JSE Transfer Secretaries, and they will be sent an exempt purchaser status certificate. The exempt purchaser status certificate will set out the conditions required to be met, and procedures that must be followed, for such ineligible holders to participate in the offering.

CSDPs or brokers cannot follow the rights in respect of ineligible holders of dematerialized common shares, unless the ineligible holder has completed an exempt purchaser status certificate and has provided same to the JSE Transfer Secretaries on or prior to Jan. 13, 2021 (ineligible holders must confirm the provision of the exempt purchaser status certificate to their CSDP or broker). After Jan. 13, 2021, ineligible holders should instruct their CSDPs or brokers to attempt to sell their rights for the account of such holders and to deliver any proceeds of sale to such holders or allow their rights to lapse.

The form of exempt purchaser status certificate has been sent to ineligible holders (or their CSDP or broker) and will be available from the JSE Transfer Secretaries upon request, which can be contacted at 27-0-861-472-644 (local) or 27-11-029-0112 (international).

General

A copy of the notice of rights offering, the rights offering circular and the notice to ineligible shareholders is available under the company’s profile on SEDAR and on the company’s website.

Shareholders elected Luc Cloutier, Guy Chevrette, Michel Bouchard, Dominique Doucet and Gilles Dupuis to the Board of Directors with an approval rating between 96.8 % to 98.6 %. More than 40 % of the shareholders voted on the resolutions presented.

Moreover, during the Board meeting held after the meeting, Mr. Frederic Sahyouni was re-elected as Chief Financial Officer and Secretary of the Company while Mr. Dominique Doucet and Gilles Dupuis were re-elected as President and Chief Executive Officer, and Chairman of the Board respectively. Mr. Luc Cloutier, Guy Chevrette and Michel Bouchard were also reappointed as members of the audit committee and the governance, environment, health and safety committee.

Options grant

On December 9, 2020, the Board of Directors has granted 2,925,000 stock options under its Stock Option Incentive Plan to directors, officers, consultants and employees at an exercise price of $0.15 per share. The options expire five (5) years from the date of grant.

Assay highlights of hole PC-20-225

• MQV intercepted 4.26 metres (estimated true width 3.94 m) grading 203.8 grams per tonne (5.9 ounces per ton) silver, 27.18 per cent zinc and 16.89 per cent lead (56.28 per cent ZnEq (1)).
• STK intercepts
  • 1.02 m grading 189 g/t (5.5 oz/ton) silver, 25.40 per cent zinc, 10.4 per cent lead (45.28 per cent ZnEq);
  • 1.02 m grading 120 g/t (3.5 oz/ton) silver, 32.50 per cent zinc, 4.47 per cent lead (42.45 per cent ZnEq);
  • 1.86 m grading 205.3 g/t (6.0 oz/ton) silver, 9.43 per cent zinc, 20.19 per cent lead (42.91 per cent ZnEq).

Detailed tables

The resulting composited intervals from hole PC-20-225 are presented in the attached table.

  
                                            Length on 
Mineralization style   From (m)    To (m)     core (m)      Ag (oz/t)   Zn (%)   Pb (%)   Cu (%)   ZnEq (%)

MQV                     502.55    506.81         4.26 (2)       5.94    27.18    16.89     0.47      56.28   
STK                     506.81    508.79         1.98           2.56     5.58     8.44     0.16      19.64   
STK                     549.89    611.12        61.23           0.85     3.79     2.47     0.06       8.02    
Including               549.89    555.02         5.13           1.45    12.51     6.48     0.01      22.70   
                        561.05    563.29         2.24           1.96     8.01     9.24     0.04      22.41   
                        569.40    570.45         1.05           1.72    11.60     6.00     0.10      21.48   
                        574.04    575.06         1.02           5.51    25.40    10.40     0.57      45.48   
                        579.23    580.21         0.98           6.30     5.04     1.29     0.87      14.10   
                        587.25    590.77         3.52           2.17     8.26     6.81     0.04      19.73   
                        594.82    595.84         1.02           3.50    32.50     4.47     0.43      42.45   
                        604.09    605.95         1.86           5.99     9.43    20.19     0.42      42.91   

(1) ZnEq is (grade of Zn in per cent) plus ((grade of lead in per cent multiplied by price of lead in U.S.
    dollars per pound multiplied by 22.046 multiplied by recovery of lead in per cent multiplied by payable 
    lead in per cent) plus (grade of silver in g/t multiplied by (price of silver in U.S. dollars per oz 
    divided by 31.10348) multiplied by recovery of silver in per cent multiplied by payable silver in per 
    cent)) divided by (price of zinc in U.S. dollars per lb multiplied by 22.046 multiplied by recovery of 
    zinc in per cent multiplied by payable zinc in  per cent), where prices of silver, lead and zinc are 
    $20/oz, $1/lb and $1/lb respectively, recoveries are 92 per cent, 88 per cent and 75 per cent, 
    respectively, and payables are 81 per cent, 95 per cent and 85 per cent, as stated the in company's 
    2017 Prairie Creek property feasibility study National Instrument 43-101 technical report. 

(2) Estimated true width 3.94 m.


  

While the drill program was recently concluded per the company’s press release dated Nov 20, 2020, the company-owned drill remains on the drill pad and has been winterized, for potential reactivation once warmer conditions arrive.

New geological data, including assays, will remain archived in the company’s geological databases and will be incorporated into future geological modelling and resource estimates.

Quality assurance/quality control

Drill core samples were cut by diamond saw and securely, through chain of custody, shipped to AGAT Laboratories in Mississauga for multielement assay by ICP-OES analysis. Standard reference material, blanks and duplicates were inserted into the sample stream for additional quality control. Further assays and analyses were completed where appropriate.

A 12-month vesting schedule will apply to stock options exercisable for 50,000 common shares pursuant to which 25 per cent of the option shares will vest on each of March 10, 2021, June 10, 2021, Sept. 10, 2021, and Dec. 10, 2021, respectively.