Precious Metals

Responding to comments on a news release from Beijing Hehe Fengye Investment, Eastern Platinum (TSX:ELR) stated that Hebei Zhongbo Platinum remains committed to the transaction announced late last year in which it will acquire all of Eastern Platinum’s South African platinum assets. Beijing Hehe Fengye stated that it a significant shareholder of Hebei Zhongbo, and that the transaction will not proceed.

Responding to comments on a news release from Beijing Hehe Fengye Investment, Eastern Platinum (TSX:ELR) stated that Hebei Zhongbo Platinum remains committed to the transaction announced late last year in which it will acquire all of Eastern Platinum’s South African platinum assets. Beijing Hehe Fengye stated that it a significant shareholder of Hebei Zhongbo, and that the transaction will not proceed.
As quoted in the press release:

In the Release, Beijing Hehe makes reference to a letter dated September 1, 2015 (the “September Letter”). Eastplats acknowledges receipt of the September Letter purporting to be from HZP giving notice of termination of the share purchase agreements between the Company and HZP (the “SPAs”) as detailed in prior news releases of the Company. The September Letter, which made reference to previous correspondence from HZP claiming to have communicated a change in the controlling shareholder and legal representative of HZP as of February 16, 2015, was signed by Mr. Shuming Du, an individual with whom the Company had had no prior dealings whatsoever, either as an individual, a purported shareholder, or as a representative of HZP, the Company having communicated primarily throughout the course of its dealings with HZP with Mr. Yunpu Ma and his advisors in South Africa and Canada. No such correspondence alluding to a change in shareholder or legal representative was previously received by the Company.
As the Company had reason to question the validity of the September Letter, immediately upon its receipt, the Company conducted its own due diligence in order to seek clarification from HZP regarding its validity. The Company immediately made enquiries to both HZP and its legal counsel, through the contractually defined channels in the SPAs, and was provided with verbal assurances and written correspondence from both the authorized representative of HZP and Chinese counsel acting on behalf of HZP confirming that neither Beijing Hehe nor Mr. Du had the legal authority to act on behalf of HZP to terminate the SPAs on behalf of HZP, or to make such statements on behalf of HZP.
In light of the position taken and statements made by Beijing Hehe in the Release, the Company has spoken to Canadian counsel for HZP and has been given to understand that the issuance of the Release by Beijing Hehe may be attributable to a shareholders dispute between the principal shareholders of HZP.
While the Company continues to seek further information on this issue in order to clarify its impact on the Company’s dealing with HZP, it has been advised by Mr. Ma, on behalf of HZP, that it remains committed to the transaction with the Company and is working toward a successful conclusion.
The Company has requested further clarification in writing from HZP and a further news release will be issued when the Company is able to provide clarity on the veracity of the Release. Until such time as the Company can verify the validity of the statements made by Beijing Hehe with respect to the status of the transaction, the Company’s understanding is that the transaction between Eastplats and HZP is proceeding.

Click here for the full press release.

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