Gediminas Jasionis
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Eastern Platinum Ltd. (TSE:ELR) (PINK:ELRFF) Stock Struggles Under Increasing Selling Presure

by Gediminas Jasionis Nov 21, 2011
6elr_chart.pngEastern Platinum Ltd. (TSE:ELR) (PINK:ELRFF) stock keeps struggling to stay above the last strong support on its way down, while the recent news only brought in more selling pressure. 

ELR had another spike in trading volume and a resulting 3.3% increase in the share price on Friday, but the stock remains closely bound to the support at roughly 60 cents per share

Friday's are known to produce increased trading activities which were likely the case here as well. The effect was stronger because traders are still excited by the recent news flow.

On November 7, the company was forced to stop production on two sections of Crocodile River Mine for a whole week because of a fatal accident and a follow-up investigation. Production resumed last Monday.

eastern_platinum_logo.jpgOn the same day the company published their financial results for the third quarter, which led to a share price drop. The changes in the financial statements were mostly disappointing:

  • Revenue dropped by nearly 17.4% to $31.45 million;
  • Recorded a net loss of 549 thousand, compared to $3.1 million profit over Q3 2010;
  • The loss was significantly lowered by additional income from interest and on foreign exchange;
  • Stock dilution rate was nearly 33%;
  • Working capital decreased by 21.9%, mostly affected by $27.8 million spending on property, plant and equipment.

Eastern Platinum also has significant issues with losses due to varying exchange rates. The currency translation adjustment increased the comprehensive loss for the period by $133.99 million.

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