Metals Update 26/03/2021

Eskay Mining clarifies acquisition of JV property

Eskay Mining Corp. is clarifying its press release dated March 25, 2021. All of the property that was subject to the former joint venture with St. Andrew Goldfields Ltd., including the Jeff and TV targets (referred to in the company’s press release of Feb. 2, 2021), is now owned 100 per cent by Eskay subject to the 2-per-cent net smelter return royalty in favour of St Andrew.

Amerigo earns the Globe and Mail’s 2021 Women Lead Here seal

VANCOUVER, British Columbia, March 26, 2021 (GLOBE NEWSWIRE) — Amerigo Resources Ltd. (“Amerigo” or the “Company”) (TSX: ARG OTCQX: ARREF) is pleased to announce it has earned a spot on the 2021 Women Lead Here list published by the Globe and Mail’s Report on Business, an annual editorial benchmark that identifies best-in-class executive gender diversity in corporate Canada.

The Women Lead Here initiative was established in 2020 by Report on Business magazine. Through a proprietary research methodology, it identifies corporations in Canada with the highest degree of gender diversity among executive ranks.

“We are honored and incredibly proud to be recognised in 2021 by the Women Lead Here initiative. Amerigo’s gender diversity and equity stands strong with women in the CEO and CFO roles, and we are encouraged by the growing evidence of the larger role gender diversity plays in corporate strategy and performance, as well as in determining how an organization might respond to ESG risks and opportunities We will continue to ensure opportunities exist for career advancement for our female colleagues in operational and administrative roles at Amerigo’s Minera Valle Central operation in Chile,” stated Aurora Davidson, President and Chief Executive Officer of Amerigo Resources.

For the 2021 ranking, Report on Business conducted a journalistic analysis of nearly 500 publicly traded Canadian companies, evaluating the ratio of female-identifying to male-identifying executives in the top three tiers of executive leadership. The resultant data was applied to a weighted formula that also factored in company performance, diversity and year-to-year change.

In total, 71 companies earned the 2021 Women Lead Here seal, with a combined average of 44% of executive roles held by female-identifying individuals.

The full list of 2021 Women Lead Here honourees can be found in the April issue of Report on Business magazine, distributed with The Globe and Mail on Saturday, March 27th, and online now at tgam.ca/WomenLeadHere.

Eloro Resources Closes C$25 Million Bought Deal Financing

TORONTO, March 26, 2021 (GLOBE NEWSWIRE) — Eloro Resources Ltd. (the “Company” or “Eloro”) (TSX-V: ELO; OTCQX: ELRRF; FSE: P2QM) is pleased to announce that it has closed its previously announced bought deal financing, including the exercise in full of the over-allotment option, of 6,670,000 units of the Company (“Units”) at a price of C$3.75 per Unit (the “Issue Price”) for aggregate gross proceeds to the Company of C$25,012,500 (the “Offering”). Each Unit consists of one common share (a “Common Share”) in the capital of the Company and one-half (1/2) of one common share purchase warrant (each whole common share purchase warrant, a “Warrant”) of the Company. Each Warrant is exercisable to acquire one Common Share (a “Warrant Share”) at a price per Warrant Share of C$5.25 for a period of 24 months from the closing date of the Offering, provided that, the expiry date of the Warrants may be accelerated by the Company at any time following the six-month anniversary of the closing date of the Offering and prior to the expiry date of the Warrants if the volume-weighted average trading price of the Company’s Common Shares is greater than C$7.00 for any 20 consecutive trading days, at which time the Company may accelerate the expiry date by issuing a press release to announce the reduced warrant term, whereupon the Warrants will expire on the 20th calendar day after the date of such press release.

The Offering was underwritten on a bought deal basis by Haywood Securities Inc. and Cantor Fitzgerald Canada Corporation as co-lead underwriters and joint bookrunners, and Cormark Securities Inc. as co-lead underwriter (collectively, the “Underwriters”).

The Company intends to use the net proceeds from the Offering mainly for continued exploration and development of the Company’s Iska Iska project in Bolivia.   On February 16, 2021, Eloro announced the addition of a second drill rig to commence drilling on the Central Breccia Pipe target. Planned diamond drilling for the balance of 2021 and Q1 2022 is 51,000 metres, comprising 6,000 metres already budgeted and an additional 45,000 metres planned to be funded from the Offering. Additional drills will be added in stages so that by July 2021, 4 surface drill rigs are expected to be operating with an expected production of 6,000 metres per month. This drilling will be done to explore and define a mineral resource in the Santa Barbara Breccia Pipe, Central Breccia Pipe, Porco (South) Breccia Pipe target and the Huayra Kasa Breccia Pipe and underground workings. Included as part of the 45,000 metres are 6,000 metres of drilling in outside targets at Iska Iska and the Pache property located 20 kilometres southwest of Iska Iska. Eloro also intends to pay from the proceeds of the Offering US$2,500,000 toward the US$10,000,000 option price under an option agreement to acquire a 99% interest in the Iska Iska Project.

In connection with the Offering, the Underwriters received a cash commission equal to 6% of the gross proceeds of the Offering (for a total cash commission of C$1,500,750) and that number of non-transferable compensation options (the “Compensation Options”) equal to 6% of the aggregate number of Units sold under the Offering (for a total of 400,200 Compensation Options). Each Compensation Option is exercisable into one Common Share at the Issue Price for a period of 24 months from the closing date of the Offering.

The securities offered in the Offering have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the “U.S. Securities Act”) or any U.S. state securities laws, and may not be offered or sold in the United States or to, or for the account or benefit of, United States persons absent registration or any applicable exemption from the registration requirements of the U.S. Securities Act and applicable U.S. state securities laws. This press release shall not constitute an offer to sell or the solicitation of an offer to buy securities in the United States, nor there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

Eastern Platinum loses $8-million (U.S.) in 2020

Eastern Platinum Ltd. has filed its audited consolidated financial statements for the years ending Dec. 31, 2020, and 2019 and the corresponding management’s discussion and analysis and annual information form. Below is a summary of the company’s financial results for the year ended Dec. 31, 2020, (all amounts are in U.S. dollars):

  • 43-per-cent growth in revenue for the year ended Dec. 31, 2020, of $56.1-million compared with $39.2-million in the prior year. The growth in revenue is due to the strong operating results from the retreatment project (as defined below);
  • Mining operation income (eight consecutive quarters) — Dec. 31, 2020, $5.6-million (2019 — $5.5-million) (some difficulties in direct comparison include: commercial production timing in 2019 and the most recent four quarters being negatively impacted by COVID-19 costs and 2020 South Africa lockdowns);
  • Cash generated from operations during the year Dec. 31, 2020 — $1.6-million (2019 — negative $8.8-million);
  • Positive working capital (excluding non-cash deferred revenue and lease liability) of $8.5-million as at Dec. 31, 2020;
  • Net loss to equity shareholders of $8.0-million (loss of eight cents per share) for the year ended Dec. 31, 2020, compared with earnings to equity shareholders of $100,000 (earnings of nil per share) for the prior year, resulting from an increase in non-cash finance costs, foreign exchange losses and the legal settlement with AlphaGlobal (see news release of June 26, 2020).

Operations of the retreatment project

The availability of the retreatment project as a 24-hour continuous operation (including chrome recovery plant, deposition and remining on the tailings dam) including planned maintenance has improved significantly in 2020 to 86 per cent up from 76 per cent in 2019.

Eastern Platinum reported 987,003 tons of chrome concentrate production, a 68-per-cent increase from 2019 production (see news release of March 3, 2021, for a detailed review of the retreatment project).

On March 10, 2021, the company and Union Goal signed updated retreatment project agreements (see news release of March 15, 2021), which capitalized on Eastern Platinum’s two years of operating knowledge and continued commitment to the long-term benefits of the retreatment project.

Platinum group metals

During 2020, the company completed the refurbishment of the small-scale PGM (platinum group metals) circuit (previously the scavenger plant circuit) (PGM circuit D). The company only restarted and began operating the PGM circuit D during the third quarter of 2020 (following the mandatory general lockdown imposed by the government of South Africa in connection with the COVID-19 pandemic). The company generated approximately 134 tons of pressed filter cake PGM concentrate and delivered approximately 32.18 tons during 2020.

During early 2021, the company completed the reconfiguring and optimization of the PGM circuit D, which also includes financing for some of the initial work required to restart the main PGM plant circuit.

Rights offering

On Dec. 18, 2020, the company issued rights to its existing shareholders for the acquisition of shares at a discounted price. On Jan. 22, 2021, the company completed the rights offering. Eastern Platinum issued 36,841,741 common shares of the company at a price of 32 cents per common share for rights exercised on the Toronto Stock Exchange and 3.77136 South African rand per common share for rights exercised on the Johannesburg Stock Exchange. The company is very pleased to have raised total gross proceeds of approximately $9.3-million ($11.8-million (Canadian)) to invest into additional capital projects.

Outlook

The company’s CRM retreatment project in South Africa was operating without restrictions at Dec. 31, 2020. Additionally, the company restarted the PGM circuit D in 2020 and completed further improvements during March, 2021.

The company’s targets for 2021 were updated following the completed rights offering in January, 2021, and include the following:

  • Continue operating the retreatment project efficiently;
  • Complete the upgrades and operate the PGM circuit D;
  • Complete the optimization project for the retreatment project;
  • Establish the appropriate phase 2 of the tailing storage facility capital works program;
  • Upgrade and repair the Crocodile River mine (CRM) Zandfontein underground shaft and rock winder to ensure they are available for PGM operations;
  • Complete the refurbishment of the existing PGM main circuit to increase the capacity and recovery opportunity of PGM recovery and sales;
  • Complete the environmental impact assessment (EIA) regarding the haul road for the Mareesburg project;
  • Prospect and assess work in relation to Zandfontein, Crocette and Spitzkop orebodies;
  • Conduct feasibility and assessment work regarding a vertical furnace and pelletizer of chrome concentrate;
  • Assess CRM underground including all chrome recovery activities in relation to the retreatment project;
  • Finance capital requirements for care and maintenance, working capital and general and administrative costs.

Diana Hu, chief executive officer of Eastern Platinum, commented: “Eastplats has established stable operations with the retreatment project, and is seeking to complete its optimization program by the end of Q3 2021. This stability will allow growth with PGM extraction through both the PGM circuit D and the PGM main circuit. These projects are expected to increase the revenue and income of Eastplats. During 2021, the company’s focus is on operations and cash flow to continue to build shareholder value.”

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