Eastern Platinum Limited — Interim / Quarterly Report 2021

Nov 11, 2021

Condensed interim consolidated financial statements of

Eastern Platinum Limited

For the three and nine months ended September 30, 2021 (Unaudited)

Eastern Platinum Limited

For the three and nine months ended September 30, 2021 Table of contents

Notice of no auditor review of condensed interim consolidated financial statements ......................... 3 Condensed interim consolidated statements of (loss) income ........................................................ 4 Condensed interim consolidated statements of comprehensive (loss) income .................................. 5 Condensed interim consolidated statements of financial position ................................................... 6 Condensed interim consolidated statements of changes in equity .................................................. 7 Condensed interim consolidated statements of cash flows ............................................................ 8 Notes to the condensed interim consolidated financial statements ............................................ 9-30

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Notice of No Auditor Review of Condensed Interim Consolidated Financial Statements

The accompanying unaudited condensed interim consolidated financial statements of the Company have been prepared by and are the responsibility of the Company’s management. The Company’s independent auditor has not performed a review of these financial statements in accordance with the standards established by the Canadian Institute of Professional Chartered Accountants for a review of interim financial statements by an entity’s auditor.

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Eastern Platinum Limited

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Condensed interim consolidated statements of (loss) income

(Expressed in thousands of U.S. dollars, except for per share amounts - unaudited)

Note	Three months ended September 30		Nine months ended
			September 30
	2021 2020		2021 2020
Revenue 10 $ 15,927 $ 16,847 $ 52,592 $ 40,324 Production costs (12,322) (14,287) (40,673) (33,753) Production costs-depreciation (1,712) (910) (5,276) (2,551)
Mining operation income 1,893 1,650 6,643 4,020 Expenses General and administrative 602 943 2,175 2,089 Site services 1,030 1,024 3,621 3,303 Care and maintenance 647 524 2,254 1,678
Operating (loss) income (386) (841) (1,407) (3,050)
Other income (expense) Gain on disposal of property, plant and equipment 48 117 745 489 Interest income 94 95 274 407 Other income 785 462 2,382 1,983 Finance costs (1,317) (1,369) (4,149) (3,890) Settlement gain (loss) 12 — — 3,258 (2,787) Foreign exchange (loss) gain (2,328) 1,673 (1,298) (5,844)
(Loss) income before income taxes (3,104) 137 (195) (12,692) Income tax expense (13) (20) (60) (123)
Net(loss) income for theperiod (3,117) 117 (255) (12,815)
Net (loss) income attributable to Non-controlling interest (610) (55) (1,023) (1,794) Equity shareholders of the Company (2,507) 172 768 (11,021)
Net(loss) income for theperiod $ (3,117) $ 117 $ (255) $ (12,815)
(Loss) earnings per share attributable to equity shareholders of the Company Basic and diluted (0.02) 0.00 $ 0.01 $ (0.12)
Weighted average number of common shares outstanding in thousands Basic 137,723 100,639 134,614 95,442 Diluted 137,723 101,662 137,066 95,442

The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.

"George Dorin" George Dorin, Director

"Mike Cosic"

Mike Cosic, Director

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Eastern Platinum Limited

Condensed interim consolidated statements of comprehensive (loss) income (Expressed in thousands of U.S. dollars - unaudited)

	Three months ended September 30	September 30 Nine months ended
	2021 2020	2021 2020
Net (loss) income for the period $ (3,117) $ 117 $ Other comprehensive (loss) income Items that may subsequently be reclassified to loss or profit - Exchange differences on translating foreign operations (8,187) 3,958 - Exchange differences on translating non-controlling interest 2,660 (1,420)		(255) $ (12,815) (4,697) (23,049) 1,466 7,402
Comprehensive (loss) income for the period (8,644) 2,655		(3,486) (28,462)
		(3,929) (34,070) 443 5,608
Comprehensive (loss) income attributable to
Equity shareholders of the Company (10,694) 4,130 Non-controlling interest 2,050 (1,475)
Comprehensive(loss) income for theperiod $ (8,644) $ 2,655 $		(3,486) $ (28,462)

The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.

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Eastern Platinum Limited

Condensed interim consolidated statements of financial position (Expressed in thousands of U.S. dollars - unaudited)

			As at		As at
		September 30			December 31
	Note		2021		2020
Assets
Current assets
Cash and cash equivalents		$	2,565	$	1,772
Short-term investments			3,925		—
Trade and other receivables	10		22,642		12,635
Inventories			1,203		1,553
			30,335		15,960
Non-current assets
Restricted cash			90		90
Inventories			1,622		1,676
Property, plant and equipment	3		131,135		136,579
Other assets			6,759		6,787
Assets held for sale	3(a)		1,831		1,893
		$	171,772	$	162,985
Liabilities
Current liabilities
Trade and other payables		$	11,268	$	7,491
Deferred revenue	4		4,625		3,124
Lease liabilities			1,308		1,265
			17,201		11,880
Non-current liabilities
Deferred revenue	4		8,778		8,875
Contracts payable	4		49,078		50,576
Lease liabilities			2,182		3,292
Provision for environmental rehabilitation			3,234		3,060
Deferred tax liabilities			3,412		3,442
Liabilities associated with assets held for sale	3(a)		512		530
			84,397		81,655
Equity
Issued capital	8		1,240,890		1,231,563
Contributed surplus			1,175		1,290
Accumulated other comprehensive loss			(303,955)		(299,258)
Deficit			(806,928)		(808,015)
Total equity attributable to equity shareholders of
the Company			131,182		125,580
Non-controlling interest			(43,807)		(44,250)
			87,375		81,330
		$	171,772	$	162,985
Contingencies (Note 13)

The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.

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Eastern Platinum Limited

Condensed interim consolidated statements of changes in equity (Expressed in thousands of U.S. dollars - unaudited)

										Total equity
						Accumulated				attributable to
						other				equity		Non-
		Issued		Contributed		comprehensive				shareholders of		controlling
		capital		surplus		income (loss)		Deficit		the company		interest		Equity
Balance, December 31, 2019	$	1,229,967	$	501	$	(292,188)	$	(800,041)	$	138,239	$	(44,738)	$	93,501
Net loss		—		—		—		(11,021)		(11,021)		(1,794)		(12,815)
Other comprehensive (loss) income		—		—		(23,049)		—		(23,049)		7,402		(15,647)
Total comprehensive (loss) income		—		—		(23,049)		(11,021)		(34,070)		5,608		(28,462)
AlphaGlobal settlement (Note 12(b))		1,702		564		—		—		2,266		—		2,266
Share-based compensation		—		4		—		—		4		—		4
Balance, September 30, 2020	$	1,231,669		1,069		(315,237)		(811,062)		106,439		(39,130)		67,309
Net income		—		—		—		3,047		3,047		372		3,419
Other comprehensive income (loss)		—		—		15,979		—		15,979		(5,492)		10,487
Total comprehensive income (loss)		—		—		15,979		3,047		19,026		(5,120)		13,906
AlphaGlobal settlement - share
issuance cost		(106)		—		—		—		(106)		—		(106)
Share-based compensation		—		221		—		—		221		—		221
Balance, December 31, 2020	$	1,231,563	$	1,290	$	(299,258)	$	(808,015)	$	125,580	$	(44,250)	$	81,330
Net income (loss)		—		—		—		768		768		(1,023)		(255)
Other comprehensive (loss) income		—		—		(4,697)		—		(4,697)		1,466		(3,231)
Total comprehensive (loss) income		—		—		(4,697)		768		(3,929)		443		(3,486)
Rights offering for 36,841,741
common shares		9,307		—		—		—		9,307		—		9,307
Rights offering - share issuance cost		(62)		—		—		—		(62)		—		(62)
Warrants exercised for 40,000
common shares		12		(4)		—		—		8		—		8
Stock options exercised for
300,000 common shares		70		(20)						50		—		50
Share-based compensation		—		228		—		—		228		—		228
Transfer contributed surplus
relating to expired options		—		(319)		—		319		—		—		—
Balance, September 30, 2021	$	1,240,890	$	1,175	$	(303,955)	$	(806,928)	$	131,182	$	(43,807)	$	87,375

The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.

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Eastern Platinum Limited

Condensed interim consolidated statements of cash flows

(Expressed in thousands of U.S. dollars - unaudited)

	Nine months ended
	September 30
	2021 2020
Operating activities Loss before income taxes $ Adjustments to net loss for non-cash items Depreciation and amortization Stock based compensation Shares and warrants issued for AlphaGlobal settlement Gain on disposal of property, plant and equipment Interest income Finance costs Foreign exchange loss Net changes in non-cash working capital items Trade and other receivables Inventories Trade and other payables Deferred revenue	(195) $ (12,692) 5,400 2,662 228 4 — 2,266 (745) (489) (274) (407) 4,149 3,890 1,298 5,844 — (10,061) (287) 392 (163) 3,189 7,035 (3,111) (1,532)
Cash provided from operations Adjustments to net loss for cash items Interest income received Finance costs paid Taxes paid	270 6,131 269 401 (25) (11) (95) (62)
Net operating cash flows	419 6,459
Financing activities Share issued, net of issuance cost Contracts payable - credit facility Lease payments	9,303 — — 1,077 (1,266) —
Net financing cash flows	8,037 1,077
Investing activities Purchases of short-term investments Redemptions of short-term investments Decrease of other assets Property, plant and equipment additions Disposal of property, plant and equipment	(5,174) — 1,190 — (201) (193) (5,230) (1,927) 1,654 790
Net investing cash flows	(7,761) (1,330)
Effect of exchange rate changes on cash and cash equivalents	98 (1,097)
Increase in cash and cash equivalents Cash and cash equivalents, beginning of period	793 5,109 1,772 1,957
Cash and cash equivalents, end ofperiod $	2,565 $ 7,066

The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.

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Notes to the condensed interim consolidated financial statements For the three and nine months ended September 30, 2021 (Unaudited - expressed in thousands of U.S. dollars, except for per share amounts)

Eastern Platinum Limited

1. Nature of operations

Eastern Platinum Limited (“Eastplats” or the “Company”) was incorporated in Canada with limited liability under the legislation of the Province of British Columbia. The Company’s shares are listed on the Toronto Stock Exchange (primary listing) and the Johannesburg Stock Exchange (secondary listing). The head office and principal address of the Company is located at 1080 – 1188 West Georgia Street, Vancouver, British Columbia, Canada.

The Company is a platinum group metal (“PGM”) and chrome producing company engaged in re-mining and processing of tailings at the Crocodile River Mine (“CRM”) and the exploration and development of other PGM and chrome properties located in various provinces in South Africa.

The Company’s presentation currency is U.S. dollars. All monetary amounts presented in these condensed interim consolidated financial statements are in thousands of U.S. dollars (“$”), thousands of Canadian dollars (“Cdn$”) or thousands of South African Rand (“ZAR”), except for per share amounts or otherwise indicated. The Company has re-presented certain prior year figures to reflect current period presentation in these condensed interim consolidated financial statements. Accordingly, treasury shares of $204 have been combined with issued capital of the Company in the condensed interim consolidated statement of changes in equity.

These condensed interim consolidated financial statements were approved and authorized for issuance by the board of directors on November 10, 2021.

The Company and its subsidiary, Barplats Mines (Pty) Limited (“Barplats”) entered into an agreement (the “Framework agreement”) with Union Goal Offshore Solution Limited (“Union Goal”) on March 1, 2018 and subsequently various transactional agreements including equipment and chrome plant agreement, loan agreement, escrow agreement and offtake agreement were signed on August 31, 2018 under the Framework Agreement (collectively referred to as the “2018 Retreatment Project Agreements”). On March 10, 2021, the Company, Barplats and Union Goal executed updated Retreatment Project Agreements (the “2021 Updated Retreatment Project Agreements”) (see Note 4). All of these agreements are collectively referred to as the Union Goal Contracts and provide for construction, re-mining and processing of the tailings resource, and the subsequent offtake of chrome concentrate from the Barplats Zandfontein UG2 tailings facility (“Retreatment Project”). Operations from re-mining the tailings material have produced chrome concentrate since December 2018 and started to produce PGM concentrates in December 2020. Since August 2013, the Company’s other existing projects have been either in care and maintenance or on hold.

Although the Retreatment Project and PGM production have generated cash flows, CRM underground remains in care and maintenance and all other properties and projects are not generating revenue. The Company intends to carry out Zandfontein underground restart business plan, subject to final evaluation and funding arrangement. The projected cash flows for the next twelve months are sufficient to cover the Company’s operating expenses, approved capital expenditures and all other care and maintenance expenses. However significant judgements and estimates are involved in projecting the future cash flows including the level of production and the global impact of the novel coronavirus (“COVID-19”) (see below). The Retreatment Project is also dependent on its operating cash inflows from Union Goal, its sole offtaker of chrome concentrate, in order to fund its current operating activities and eventually fulfil all obligations under the Union Goal Contracts. Lastly, in addition to cash inflows from current operations, additional funding will be required in the future to commence underground production at CRM, and to develop the Kennedy’s Vale (“KV”), Spitzkop PGM (“Spitzkop”) and Mareesburg PGM Project (“Mareesburg”) (together the “Eastern Limb Projects”) and to bring them into production. For more information, refer to Financial risk management - liquidity risk (Note 9(c)(v)).

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Notes to the condensed interim consolidated financial statements For the three and nine months ended September 30, 2021 (Unaudited - expressed in thousands of U.S. dollars, except for per share amounts)

Eastern Platinum Limited

1. Nature of operations (continued)

The Company cannot accurately predict the impact COVID-19 will have on third parties’ ability to meet their obligations with the Company, including due to uncertainties relating to the ultimate geographic spread of the virus, the severity of the disease, the duration and or reoccurrence of the outbreak, and the length of travel and quarantine restrictions imposed by governments of affected countries. In particular, the continued spread of COVID-19 globally could materially and adversely impact the Company’s business including without limitation, employee health, limitations on travel, the availability of industry experts and personnel, restrictions to the optimization program of its chrome and PGM operations or other objectives and targets and other factors that will depend on future developments beyond the Company’s control. In addition, a significant outbreak of contagious diseases in the human population could result in a widespread health crisis that could adversely affect the economies and financial markets of many countries, resulting in an economic downturn that could negatively impact the Company’s financial position, financial performance, cash flows, and its ability to raise capital, in 2021 or the future. While the impact of COVID-19 is expected to be temporary, the current circumstances are dynamic and the impacts of COVID-19 on the Company’s anticipated activities, and operations, cannot be reasonably estimated at this time.

2. Basis of preparation

These unaudited condensed interim consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”), as applicable to interim financial reports including International Accounting Standard (“IAS”) 34 Interim Financial Reporting.

The preparation of these unaudited condensed interim consolidated financial statements is based on accounting principles and methods consistent with those used in the preparation of the audited consolidated financial statements as at December 31, 2020 except for below (b). The accompanying unaudited condensed interim consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2020. The Company’s interim results are not necessarily indicative of its results for a full year.

(a) Judgments and estimates

The preparation of financial statements requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, and revenue and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and further periods if the review affects both current and future periods.

The Company’s primary operation is in South Africa. On July 26, 2021, South Africa reduced its COVID19 restrictions by decreasing the alert level to stage 3. The alert level was subsequently reduced to stage 1 on October 1, 2021. The Company’s operations continue with precautions and follow the health guidelines of the Government of South Africa. The effects of COVID-19 are evolving and changing and the consequences of a further increase in the alert level in South Africa, temporary shutdown of any operations or other related issues cannot be reasonably estimated at this time, but could potentially have material adverse effects on the Company’s business, operations, liquidity and cash flows.

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Eastern Platinum Limited Notes to the condensed interim consolidated financial statements For the three and nine months ended September 30, 2021 (Unaudited - expressed in thousands of U.S. dollars, except for per share amounts)

2. Basis of preparation (continued)

(a) Judgments and estimates (continued)

As discussed in Note 4, the Company signed the 2021 Updated Retreatment Project Agreements on March 10, 2021. The assessment of the accounting effect of the 2021 Updated Retreatment Project Agreements requires significant judgement. Other areas of significant judgement and estimates made by management for the three and nine months ended September 30, 2021 in the application of IFRS that have a significant effect on the consolidated financial statements and estimates with a significant risk of material adjustment in the current and following fiscal years are discussed in Notes 4(u) and 4(v) of the Company’s audited consolidated financial statements for the year ended December 31, 2020.

(b) PGM revenue recognition

In 2021, the Company started to generate PGM concentrate revenue from processing tailings material based on an agreement with Impala Platinum Limited (“Impala”) dated September 18, 2020. PGM concentrate revenue is recognized when control is transferred to the offtake party which is upon the PGM concentrates being physically transported, assayed and accepted at the site of the offtake party.

The sale of PGM is provisionally priced at the date of sale based on the Company’s assay results for the metal contents. The final selling price (the “Final” Price) for metal contents in concentrate is based on the prevailing daily spot price averaged for the one month prior to the month of final payment with the final payment due in the fifth month following the delivery month. Revenue on these sales is measured at the amount to which the Company expects to be entitled, being the estimated price to be received and a corresponding trade receivable is recognized. The provisional price adjustments refer to the sales price based on movements in quoted market prices up to the Final Price. The trade receivables subject to provisional price adjustments are measured at fair value through profit or loss (“FVTPL”) from initial recognition and until the date of settlement. The provisional price adjustments are recorded in the statement of income (loss) each period and presented separately from PGM revenue. The Company does not have significant performance obligations for freight and shipping service.

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Eastern Platinum Limited

Notes to the condensed interim consolidated financial statements

For the three and nine months ended September 30, 2021

(Unaudited - expressed in thousands of U.S. dollars, except for per share amounts)

3. Property, plant and equipment

			Mineral	Mineral
		Plant and	properties	properties
	Right-of-use	equipment	previously	not being	Properties
	assets	owned	depleted	depleted	and land	Total
	$	$	$	$	$	$
Cost
Balance as at December 31, 2019	66	389,066	72,438	295,938	13,704	771,212
Additions	4,268	7,243	—	—	—	11,511
Environmental provision change in estimate	—	(394)	—	(97)	—	(491)
Disposals	—	(339)	—	—	(168)	(507)
Foreignexchangemovement	272	(16,339)	(3,260)	(13,326)	(630)	(33,283)
Balance as at December 31, 2020	4,606	379,237	69,178	282,515	12,906	748,442
Additions	—	5,221	—	9	—	5,230
Disposals	—	(876)	—	—	(59)	(935)
Foreignexchangemovement	(147)	(12,446)	(2,243)	(9,159)	(415)	(24,410)
Balance as at September 30, 2021	4,459	371,136	66,935	273,365	12,432	728,327
Accumulated depreciation and impairment
Balance as at December 31, 2019	—	308,574	59,310	265,708	2,223	635,815
Depreciation	329	3,982	—	—	89	4,400
Depreciation of disposed assets	—	(98)	—	—	(74)	(172)
Foreignexchangemovement	21	(13,521)	(2,625)	(11,959)	(96)	(28,180)
Balance as at December 31, 2020	350	298,937	56,685	253,749	2,142	611,863
Depreciation	993	4,374	—	—	34	5,401
Depreciation of disposed assets	—	—	—	—	(26)	(26)
Foreignexchangemovement	(43)	(9,901)	(1,806)	(8,226)	(70)	(20,046)
Balance as at September 30, 2021	1,300	293,410	54,879	245,523	2,080	597,192
Carrying amounts
AtDecember31,2019	66	80,492	13,128	30,230	11,481	135,397
At December 31,2020	4,256	80,300	12,493	28,766	10,764	136,579
AtSeptember 30, 2021	3,159	77,726	12,056	27,842	10,352	131,135

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Eastern Platinum Limited

Notes to the condensed interim consolidated financial statements For the three and nine months ended September 30, 2021

(Unaudited - expressed in thousands of U.S. dollars, except for per share amounts)

3. Property, plant and equipment (continued)

The following is property, plant and equipment categorized by project:

					Other property
	Crocodile	Mareesburg	Kennedy's Vale	Spitzkop	plant and
	River Mine	Project	**and Concentrator **	PGM Project	equipment	Total
	$	$	$	$	$	$
Cost
Balance as at December 31, 2019	388,433	17,861	297,788	66,894	236	771,212
Additions	11,511	—	—	—	—	11,511
Environmental provision change in estimate	(169)	(81)	(225)	(16)	—	(491)
Disposals	(507)	—	—	—	—	(507)
Foreign exchange movement	(16,051)	(809)	(13,417)	(3,011)	5	(33,283)
Balance as at December 31, 2020	383,217	16,971	284,146	63,867	241	748,442
Additions	5,186	9	27	—	8	5,230
Disposals	(59)	—	(876)	—	—	(935)
Foreign exchange movement	(12,637)	(550)	(9,152)	(2,071)	—	(24,410)
Balance as at September 30, 2021	375,707	16,430	274,145	61,796	249	728,327
Accumulated depreciation and impairment
Balance as at December 31, 2019	279,152	7,544	286,223	62,746	150	635,815
Depreciation	4,318	—	51	—	31	4,400
Depreciation of disposed assets	(172)	—	—	—	—	(172)
Foreignexchangemovement	(12,145)	(339)	(12,876)	(2,825)	5	(28,180)
Balance as at December 31, 2020	271,153	7,205	273,398	59,921	186	611,863
Depreciation	5,332	—	43	—	26	5,401
Depreciation of disposed assets	(26)	—	—	—	—	(26)
Foreignexchangemovement	(9,003)	(234)	(8,865)	(1,943)	(1)	(20,046)
Balance as at September 30, 2021	267,456	6,971	264,576	57,978	211	597,192
Carrying amounts
AtDecember31,2019	109,281	10,317	11,565	4,148	86	135,397
At December 31,2020	112,064	9,766	10,748	3,946	55	136,579
At September 30, 2021	108,251	9,459	9,569	3,818	38	131,135

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Notes to the condensed interim consolidated financial statements For the three and nine months ended September 30, 2021 (Unaudited - expressed in thousands of U.S. dollars, except for per share amounts)

Eastern Platinum Limited

3. Property, plant and equipment (continued)

(a) Assets held for sale

On October 24, 2019, the Company and its subsidiary Barplats entered into a sales agreement (the “Sales Agreement”) with Eland Platinum (Pty) Limited (“Eland”). The Sales Agreement provides for the sale of the mining rights, immovable property, infrastructure and equipment of the Maroelabult resource property (collectively referred to as the “Maroelabult Assets”) located near Brits in South Africa. The consideration to be received is ZAR20,000 (approximately $1,319), the assumption of the rehabilitation obligation and immediate assumption of the care and maintenance costs (the “Purchase Price”) subject to representations and warranties by both parties. The Purchase Price is payable and enforceable on closing the transaction following the transfer of legal title and the completion of the various legal and regulatory obligations required in South Africa.

As at September 30, 2021, the sale of Maroelabult Assets has not been completed. The carrying value of the Maroelabult Assets of $1,831 (ZAR27,768) (December 31, 2020 – $1,893 (ZAR27,768)) have been presented as assets held for sale and the related rehabilitation obligation in the amount of $512 (ZAR7,768) (December 31, 2020 – $530 (ZAR7,768)) has been presented as liabilities associated with the assets held for sale.

(b) Impairment of property, plant and equipment

• (i) Three and nine months ended September 30, 2021

The Company assesses the carrying values of its mineral properties for indication of impairment at each quarter end. Based on its assessment, the Company concluded that there were no indicators of impairment as at September 30, 2021.

(ii) Year ended December 31, 2020

As at December 31, 2020, there were no impairment indicators for the CRM, Kennedy’s Vale (“KV”), Spitzkop and Mareesburg CGUs. However, in the first quarter of 2020, management determined that there were indicators of impairment due to the significant fluctuation in the then forecasted metal prices, the decline in the forecasted platinum prices, the decline in the market price of the Company’s common shares at the end of the first quarter of 2020 and the uncertainty globally as a result of the COVID-19 pandemic. As a result, management performed impairment assessments of CRM, KV, Spitzkop and Mareesburg based on fair value less cost of disposal (level 3 in the fair value hierarchy). For the purpose of the impairment assessment performed in the first quarter of 2020, the Company considered CRM, KV, Spitzkop and Mareesburg each as separate CGUs which is consistent with the approach and method from prior years. As a result of the impairment analysis, the recoverable amount of CRM, KV and Spitzkop approximated the carrying amount and the recoverable amount of Mareesburg exceeded the carrying amount, and no impairment was recorded for the CRM, KV, Spitzkop and Mareesburg projects.

Page 14

Eastern Platinum Limited

Notes to the condensed interim consolidated financial statements For the three and nine months ended September 30, 2021 (Unaudited - expressed in thousands of U.S. dollars, except for per share amounts)

4. Union Goal Contracts

The continuity of the Union Goal Contracts is presented below:

The continuity of the Union Goal Contracts is presented below:
	September 30	December 31
	2021	2020
	$	$
Deferred revenue
Balance, beginning of period	11,999	12,539
Additions
- Advance payment of mining equipment	—	1,010
- Adjustments of contracts payable (a)	4,821	954
- Discounting effect from Chrome Circuit equipment payable	—	385
-Discounting effect from Credit Facility	—	164
	4,821	2,513
Recognized as revenue	(3,111)	(2,663)
Foreign exchange	(306)	(390)
Balance, end of period	13,403	11,999
Deferred revenue-current	4,625	3,124
Deferred revenue- non-current	8,778	8,875
	September 30	December 31
	2021	2020
	$	$
Contracts payable - Chrome Circuit equipment payable
Carrying value, beginning of period	43,686	36,979
Changes during the period
- Adjustments of contracts payable (a)	(4,167)	(934)
- Face value of additions	—	3,782
-Discounting effect	—	(385)
- Net present value	(4,167)	2,463
-Accretion	3,031	4,244
Carrying value, end of period	42,550	43,686
Contracts payable - Credit Facility
Carrying value, beginning of period	6,890	5,328
Changes during the period
- Adjustments of contracts payable (a)	(654)	(20)
- Face value of additions	—	1,077
-Discounting effect	—	(164)
Net present value	(654)	893
- Accretion	497	712
-Foreign exchange	(205)	(43)
Carrying value, end of period	6,528	6,890
Contracts payable, carrying value- total	49,078	50,576

Included in the finance cost, total contract payable accretion was $1,105 and $3,528 (three and nine months ended September 30, 2020 - $1,287 and $3,639) respectively for the three and nine months ended September 30, 2021.

Page 15

Eastern Platinum Limited

Notes to the condensed interim consolidated financial statements For the three and nine months ended September 30, 2021 (Unaudited - expressed in thousands of U.S. dollars, except for per share amounts)

4. Union Goal Contracts (continued)

• (a) The 2021 Updated Retreatment Project Agreements were signed on March 10, 2021 and include the following:

• (i) The 2021 Revised and Restated Framework Agreement;

• (ii) The 2021 Revised and Restated Offtake Agreement;

• (iii) The 2021 Revised and Restated Eastplats Loan Agreement; and

• (iv) The 2021 Revised and Restated Barplats Equipment and Chrome Plant Agreement.

Significant changes included in the 2021 Updated Retreatment Project Agreements are, among other things:

• (i) An upward adjustment of the overhead per tonnage charge rate and recognition of the total capital recovery of the project required by Barplats;

• (ii) Incorporation of the optimization equipment purchase on the same updated terms as the original equipment;

• (iii) Removal of the entire interest charge on Chrome Circuit equipment payable and Credit Facility from day one to the due date;

• (iv) Extension of the due date from January 14, 2022 to 210 days after the date of issuing the plant commissioning certificate on the optimization equipment, which is estimated to be the end of 2022 or later;

• (v) Cancellation of $2 million escrow fund that Union Goal was required to deposit according to the 2018 Escrow Agreement; and

• (vi) Increase of the Credit Facility from ZAR50,000 (approximately $3,387) to ZAR130,000 (approximately $8,806).

The 2021 Updated Retreatment Project Agreements is an adjustment and refinement of the 2018 Retreatment Project Agreements based on two-years of operational history. The effect on contracts payable is considered an accounting estimate change and is recognized prospectively. The present value of the Chrome Circuit equipment payable and the Credit Facility is adjusted based on the revised future payments discounted by the estimated market rate of 9%. The difference of $4,821 between the revised present value of the Chrome Circuit equipment payable and the Credit Facility, and their carry values was credited to deferred revenue in line with the treatment of the 2018 Retreatment Project Agreements, and will be recognized as revenue based on the material re-mined from the tailings and made available on a per ton basis to the chrome plant over the remaining operations of the Retreatment Project.

5. Commitments

The Company has committed to capital expenditures in South Africa of approximately $156 (ZAR2,363) as at September 30, 2021, all of which are expected to be incurred during the next 12 months.

Page 16

Eastern Platinum Limited

Notes to the condensed interim consolidated financial statements For the three and nine months ended September 30, 2021 (Unaudited - expressed in thousands of U.S. dollars, except for per share amounts)

6. Related party transactions

Related party transactions have been measured at the exchange amount of consideration agreed between the related parties. Related party transactions not disclosed elsewhere in these condensed interim consolidated financial statements are listed below:

(a) Trading transactions

The Company’s related parties consist of private companies owned by current executive officers and directors. The Company incurred the following fees and expenses in the normal course of operations:

	Three months ended September 30 September 30 Nine months ended
	2021 2020 2021 2020 $ $ $ $
Director fees Management fees Share-based payments	40 32 121 102 63 57 279 169 97 — 126 —
	200 89 526 271

• (i) The Company has a consulting agreement with Oriental Fortune Consulting Services Limited (“Oriental Fortune”) which is controlled by the Company’s Chief Operating Officer (“COO”). The Company agreed to pay $22 (Cdn$28) per month to Oriental Fortune for management consulting services rendered. During the three and nine months ended September 30, 2021, Oriental Fortune also received a bonus payment of $nil and $88 (Cdn$112) (three and nine months ended September 30, 2020 - $nil and $nil), respectively.

(b) Compensation of key management personnel

The Company’s key management includes the Chief Executive Officer (“CEO”), Chief Financial Officer (“CFO”), COO, and the General Manager of South Africa (“GM”). The total compensation to key management for the three and nine months ended September 30, 2021 was $331 and $1,172 (including share-based compensation) (three and nine months ended September 30, 2020 - $208 and $631), respectively for management salaries, bonuses, and consulting fees. Key management personnel were not paid post-employment benefits or other long-term benefits during the three and nine months ended September 30, 2021 and 2020.

Page 17

Eastern Platinum Limited

Notes to the condensed interim consolidated financial statements For the three and nine months ended September 30, 2021

(Unaudited - expressed in thousands of U.S. dollars, except for per share amounts)

7. Segmented Information

• (a) Operating segments - The Company’s operations are primarily directed towards the mining, exploration and development of PGMs and chrome in South Africa. The Company has three reportable segments – CRM, Eastern Limb and corporate. Eastern Limb consists of Kennedy’s Vale, Spitzkop and Mareesburg projects. Barbados, British Virgin Islands (“BVI”) and Canada, collectively is the corporate segment.

• (b) Geographic segments - The Company’s operations by geographic areas for the three and nine months ended September 30, 2021 and 2020, and assets by geographic areas as at September 30, 2021 and December 31, 2020, are as follows:

		Three months ended September 30, 2021	Three months ended September 30, 2021	Three months ended September 30, 2021	Three months ended September 30, 2021
				Total Canada,
		Eastern		South Barbados
	CRM	Limb		Africa and BVI		Total
	$	$		$	$	$
Property, plant and equipment expenditures	1,463		—	1,463	3	1,466
Cost ofproperty, plant and equipment disposed	(33)		—	(33)	—	(33)
Revenue	15,927		—	15,927	—	15,927
Production costs - depreciation	(1,706)		—	(1,706)	(6)	(1,712)
Loss before income taxes	(2,622)	(88)		(2,710)	(394)	(3,104)
Income tax expense	—		(1)	(1)	(12)	(13)
Net loss	(2,622)	(89)		(2,711)	(406)	(3,117)
		Nine months ended September			30, 2021
				Total Canada,
		Eastern		South Barbados
	CRM	Limb		Africa and BVI		Total
	$	$		$	$	$
Property, plant and equipment additions	5,186		36	5,222	8	5,230
Revenue	52,592		—	52,592	—	52,592
Production costs - depreciation	(5,259)		—	(5,259)	(17)	(5,276)
(Loss) income before income taxes	(3,520)	1,681		(1,839)	1,644	(195)
Income tax expense	—	(24)		(24)	(36)	(60)
Net(loss)income	(3,520)	1,657		(1,863)	1,608	(255)

Page 18

Eastern Platinum Limited

Notes to the condensed interim consolidated financial statements

For the three and nine months ended September 30, 2021

(Expressed in thousands of U.S. dollars, except for per share amounts)

7. Segmented Information (continued)

(b) Geographic segments (continued)

		Three months ended September 30, 2020	Three months ended September 30, 2020	Three months ended September 30, 2020	Three months ended September 30, 2020
				Total	Canada,
		Eastern		South	Barbados
	CRM	Limb		Africa	and BVI	Total
	$	$		$	$	$
Property, plant and equipment expenditures	2,295		—	2,295	—	2,295
Cost ofproperty, plant and equipment disposals	(50)		—	(50)	—	(50)
Revenue	16,847		—	16,847	—	16,847
Production costs - depreciation	(905)		—	(905)	(5)	(910)
Income (loss) before income taxes	1,261		(109)	1,152	(1,015)	137
Income tax expense	—		(11)	(11)	(9)	(20)
Net income(loss)	1,261		(120)	1,141	(1,024)	117
		Nine months ended September 30, 2020
				Total	Canada,
		Eastern		South	Barbados
	CRM	Limb		Africa	and BVI	Total
	$	$		$	$	$
Property, plant and equipment additions	6,579		—	6,579	—	6,579
Cost ofproperty, plant and equipment disposals	(446)		—	(446)	—	(446)
Revenue	40,324		—	40,324	—	40,324
Production costs - depreciation	(2,538)		—	(2,538)	(13)	(2,551)
(Loss) income before income taxes	(9,143)		597	(8,546)	(4,146)	(12,692)
Income tax expense	(62)		(28)	(90)	(33)	(123)
Net(loss)income	(9,205)		569	(8,636)	(4,179)	(12,815)

Page 19

Eastern Platinum Limited

Notes to the condensed interim consolidated financial statements

For the three and nine months ended September 30, 2021

(Expressed in thousands of U.S. dollars, except for per share amounts)

7. Segmented Information (continued)

(b) Geographic segments (continued)

			September 30, 2021	September 30, 2021	September 30, 2021
				Total	Canada,
			Eastern	South	Barbados
		CRM	Limb	Africa	and BVI	Total
		$	$	$	$	$
Total	assets	142,878	23,064	165,942	5,830	171,772
Total	liabilities	71,753	1,995	73,748	10,649	84,397
			December 31, 2020
				Total	Canada,
			Eastern	South	Barbados
		CRM	Limb	Africa	and BVI	Total
		$	$	$	$	$
Total	assets	137,932	24,743	162,675	310	162,985
Total	liabilities	68,662	2,131	70,793	10,862	81,655

(c) Revenue

96% and 93% of revenues generated during the three and nine months ended September 30, 2021 and 100% of revenues during the comparable period in 2020 are related to the processing of chrome concentrate (Note 4). The remaining revenues generated during the three and nine months ended September 30, 2021 are related to PGM sales.

Page 20

Notes to the condensed interim consolidated financial statements For the three and nine months ended September 30, 2021 (Expressed in thousands of U.S. dollars, except for per share amounts)

Eastern Platinum Limited

8. Share capital

(a) Authorized

• Unlimited number of preferred redeemable, voting, non-participating shares without nominal or par value; and

• Unlimited number of common shares with no par value.

(b) Issued and outstanding

As at September 30, 2021, the Company had 137,820,773 common shares issued and outstanding (December 31, 2020 - 100,639,032).

In January 2021, the Company issued 36,841,741 common shares at a price of Cdn$0.32 per share for rights exercised on the Toronto Stock Exchange (the “TSX”) and ZAR3.77136 per share for rights exercised on the Johannesburg Stock Exchange (the “JSE”). The Company received total gross proceeds of $9,307 in connection with the rights offering.

In February 2021, 40,000 warrants were exercised at a price of Cdn$0.24 per share for total proceeds of $8.

In July 2021, 300,000 stock options were exercised at a price of Cdn$0.21 per share for total proceeds of $50.

During the nine months ended September 30, 2021, 3,770,000 stock options and 5,960,000 share purchase warrants are dilutive if exercised and would increase the EPS denominator by 2,452,054 common shares. During the three months ended September 30, 2020, 2,950,000 stock options are dilutive if exercised and would increase the EPS denominator by 1,022,500 common shares. During the three months ended September 30, 2021 and the nine months ended September 30, 2020, common share equivalents (including stock options and warrants) are not included in the computation of loss per share as such inclusion would be anti-dilutive.

(c) Warrants

As at September 30, 2021, the Company had 5,960,000 (December 31, 2020 – 6,000,000) warrants outstanding and each warrant entitles its holder to acquire one common share of the Company at an exercise price of Cdn$0.24 per share expiring on June 26, 2022.

(d) Share options

The Company has an incentive plan (the “2016 Plan”), approved by the Company’s shareholders at its special meeting held on October 12, 2016, under which options to purchase common shares may be granted to its directors, officers, employees and others at the discretion of the Board of Directors. The 2016 Plan was renewed for another three years and approved by the Company’s shareholders at its annual general meeting held on June 13, 2019.

During the three months ended June 30, 2021, the Company granted 1,420,000 stock options to its directors and officers to acquire common shares of the Company at an exercise price of Cdn$0.34 per share expiring in five years from the date of grant. These stock options vested 90 days from the grant date.

Page 21

Notes to the condensed interim consolidated financial statements For the three and nine months ended September 30, 2021 (Expressed in thousands of U.S. dollars, except for per share amounts)

Eastern Platinum Limited

8. Issued capital (continued)

(d) Share options (continued)

During the three months ended June 30, 2020, the Company granted 50,000 stock options to a member of management to acquire common shares of the Company at an exercise price of Cdn$0.24 per share expiring in five years from the date of grant. These stock options vested 90 days from the grant date.

There were no new stock options granted during the first and third quarter of 2021 and 2020.

The fair value of the options granted during the second quarter of 2021 and 2020 were estimated using the Black-Scholes options pricing model with the following assumptions:

	2021	2020
Fair value (Cdn$)	0.34	0.10
Risk-free interest rate	0.25%	0.50%
Dividend yield	0%	0%
Expected volatility	59.24%	52.94%
Expected life of options	5	5

Option pricing models require the input of highly subjective assumptions including the expected volatility. The Company’s expected volatility is based on historical volatility of the Company’s share price.

During the three and nine months ended September 30, 2021, a total of $171 and $228 (three and nine months ended September 30, 2020 – $nil and $4) was recorded as share-based compensation expense relating to general and administrative services.

The following is a summary of stock option transactions:

		Weighted
		average
	Number of	exercise price
	options	Cdn$
Balance, December 31, 2019	3,600,000	0.40
Granted	1,820,000	0.37
Balance, December 31, 2020	5,420,000	0.39
Granted	1,420,000	0.34
Exercised	(300,000)	0.21
Expired	(1,200,000)	0.71
Balance, September 30, 2021	5,340,000	0.31

Page 22

Eastern Platinum Limited

Notes to the condensed interim consolidated financial statements For the three and nine months ended September 30, 2021 (Expressed in thousands of U.S. dollars, except for per share amounts)

8. Issued capital (continued)

(d) Share options (continued)

The following table summarizes information concerning outstanding and exercisable options as at September 30, 2021:

Number of	Number of	Exercise	Remaining
options	options	price	contractual
outstanding	exercisable	Cdn$	life (Years)	Expiry date
500,000	500,000	0.32	1.11	November 9, 2022
450,000	450,000	0.33	1.19	December 7, 2022
100,000	100,000	0.39	1.57	April 26, 2023
1,350,000	1,350,000	0.21	2.70	June 13, 2024
50,000	50,000	0.24	3.58	April 29, 2025
1,470,000	1,470,000	0.37	4.05	October 16, 2025
1,420,000	1,420,000	0.34	4.73	June 23, 2026
5,340,000	5,340,000

9. Financial instruments

(a) Categories of financial instruments

		September 30	December 31
		2021	2020
		$	$
Financial assets
FVTPL
Trade receivables for PGM sales		2,076	—
Amortized cost
Cash and cash equivalents		2,565	1,772
Restricted cash		90	90
Trade and other receivables (excluding
taxes receivable)		17,311	10,830
Short-term investments (i)		3,925	—
Other assets (i)		6,759	6,787
		32,726	19,479
Financial liabilities
Amortized cost
Trade and other payables		11,268	7,491
Lease liabilities		3,490	4,557
Contracts payable		49,078	50,576
		63,836	62,624

(i) Short-term investments and other assets are mainly GICs and money market funds.

Page 23

Notes to the condensed interim consolidated financial statements For the three and nine months ended September 30, 2021 (Expressed in thousands of U.S. dollars, except for per share amounts)

Eastern Platinum Limited

9. Financial instruments (continued)

• (b) Fair value of financial instruments

• (i) Fair value estimation of financial instruments

The fair values of cash and cash equivalents, restricted cash, trade and other receivables, short-term investments, other assets, trade and other payables approximate their carrying values due to the short-term to maturities of these financial instruments.

Contracts payable and lease liabilities required assessing the appropriate market interest rates on the liabilities. Financial liabilities are initially recognized at fair value and subsequently measured at amortized cost. The Union Goal contracts payable did not contain any derivatives that required bifurcation and measurement at fair value through profit and loss.

• (ii) Fair value measurements recognized in the statement of financial position

Financial instruments that are measured subsequent to initial recognition at fair value are grouped into a hierarchy based on the degree to which the fair value is observable. Level 1 fair value measurements are derived from unadjusted, quoted prices in active markets for identical assets or liabilities. Level 2 fair value measurements are derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability directly or indirectly. Level 3 fair value measurements are derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data.

There were no transfers between levels during the three and nine months ended September 30, 2021.

(c) Financial risk management

The Company’s financial instruments are exposed to certain financial risks, including currency risk, interest rate risk, price risk, credit risk and liquidity risk. The Company’s exposure to these risks and its methods of managing the risks remain consistent.

(i) Currency risk

The Company reports its financial statements in U.S dollars. The functional currency of its head office and its BVI and Barbados intermediate holding companies is Canadian dollars and the functional currency of all South African subsidiaries is South African Rand. The Company is exposed to foreign exchange risk when the Company undertakes transactions and holds assets and liabilities in currencies other than its functional currencies.

Page 24

Notes to the condensed interim consolidated financial statements For the three and nine months ended September 30, 2021 (Expressed in thousands of U.S. dollars, except for per share amounts)

Eastern Platinum Limited

9. Financial instruments (continued)

(c) Financial risk management (continued)

(i) Currency risk (continued)

The Company has not entered into any derivative financial instruments to manage exposures to currency fluctuations. The Company’s exposure to currency risk affecting net income is summarized as below:

net income is summarized as below:
	September 30	December 31
	2021	2020
	$	$
Financial assets
Denominated in USD at Canadian head office	1	—
Denominated in USD at South African Subsidiaries	2,076	—
Denominated in Rand at Canadian head office	—	7
Total	2,077	7
Financial liabilities
Contracts payable denominated in Rand at
Canadian head office	6,528	6,890
Contracts payable denominated in USD at South
African subsidiaries	42,550	43,686
Total	49,078	50,576

As at September 30, 2021, with other variables unchanged, a 10% strengthening (weakening) of the Canadian dollar against the South African Rand would have increased (decreased) net income by approximately $593; with other variables unchanged, a 10% strengthening (weakening) of the South African Rand against the U.S dollar would have increased (decreased) net income by approximately $3,679.

(ii) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is not subject to significant interest rate risk.

(iii) Commodity price risk

The Company’s PGM concentrate sales are exposed to commodity price risk with respect to fluctuations in the prices of platinum group metals going forward. Prior to January 1, 2021, the Company did not have material PGM concentrate sales. Chrome concentrate sales are structured based on the tonnage processed referenced to the long-term chrome concentrate commodity price according to the Union Goal contract.

(iv) Credit and concentration risk

Credit risk is the risk of an unexpected loss if a customer or third party to a financial instrument fails to meet its contractual obligations. The Company’s credit risk is primarily attributable to cash and cash equivalents, trade and other receivables and other assets. The carrying value of these assets included in the consolidated statement of financial position represents the maximum credit exposure.

There is both a credit risk and concentration risk associated with the collection of revenue from Union Goal. This risk is mitigated due to the contract structure and the significant outstanding contracts payable due to Union Goal (Note 4).

Page 25

Notes to the condensed interim consolidated financial statements For the three and nine months ended September 30, 2021 (Expressed in thousands of U.S. dollars, except for per share amounts)

Eastern Platinum Limited

9. Financial instruments (continued)

• (c) Financial risk management (continued)

(iv) Credit and concentration risk (continued)

The trade and other receivable balances are monitored on an ongoing basis. The Company seeks to maintain strict control over its outstanding receivables to minimize credit risk. Provision for doubtful debts is calculated based on the payment history. With respect to credit risk arising from cash and cash equivalents and other assets, the Company limits its counterparty credit risk on these assets by dealing only with financial institutions with strong credit ratings.

(v) Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company has a planning and budgeting process in place to help determine the funds required to support the Company’s normal operating requirements on an ongoing basis and its expansionary plans. The Company ensures that there are sufficient funds to meet its short-term business requirements, taking into account its anticipated cash flows from operations and its holdings of cash and cash equivalents.

The Company’s policy is to invest its excess cash in highly liquid, fully guaranteed, bank-sponsored instruments.

The Company started generating revenue from its Retreatment Project in December 2018, and at consistent expected levels since May 1, 2019. Despite the Retreatment Project and the forecasted PGM production cash flows, CRM underground remains in care and maintenance and all other properties and projects are on hold. The Company also generated some income from interest on investments and other income from the sale of non-core properties; although not expected to be significant, some of this income will be recurring in 2021 and future years. The projected cash flows for the next 12 months are sufficient to cover the Company’s operating expenses, planned capital expenditures and all other care and maintenance expenses. Additional funding will be required in the future to commence underground production at CRM, and to develop and bring the Eastern Limb Projects into commercial production.

In the normal course of business, the Company enters into contracts that give rise to commitments for future minimum payments. The following table summarizes the Company’s significant commitments (undiscounted) and corresponding maturities as at September 30, 2021. The Company currently does not have expected payments of obligations and commitments beyond 3 years.

	<1 year	1 - 3 years	Total
	$	$	$
Trade and other payables	11,269	—	11,269
Contracts payable	—	52,134	52,134
Lease liabilties	1,620	2,459	4,079
	12,889	54,593	67,482

Page 26

Notes to the condensed interim consolidated financial statements For the three and nine months ended September 30, 2021 (Expressed in thousands of U.S. dollars, except for per share amounts)

Eastern Platinum Limited

10. Revenue contracts with customers

During the three and nine months ended September 30, 2021, 96% and 93% respectively, of the Company’s revenue was from the processing of chrome concentrates and was generated from sales to Union Goal (Note 4). The remaining amount of the Company’s revenue was from PGM concentrates sales to Impala.

As at September 30, 2021, 88% or $15,647 of the trade receivable balance of $17,723 (December 31, 2020 - $10,008) was attributed to Union Goal. The remaining amount of the trade receivable balance in the amount of $2,076 (December 31, 2020 - $nil) relates to PGM sales to Impala.

11. Headline and diluted headline (loss) earnings per share

The Company’s shares are also listed on the Johannesburg Stock Exchange which requires the Company to present headline and diluted headline (loss) earnings per share. Headline (loss) earnings per share is calculated by dividing headline earnings (loss) attributable to equity shareholders of the Company by the weighted average number of common shares issued and outstanding during the period. Diluted headline (loss) earnings per share is determined by adjusting the headline (loss) earnings attributable to equity shareholders of the Company and the weighted average number of common shares issued and outstanding during the period after taking all potential dilutive effects.

The following table summarizes the adjustments to (loss) income attributable to equity shareholders of the Company for the purpose of calculating headline (loss) earnings attributable to the equity shareholders of the Company, and the headline (loss) earnings and diluted headline (loss) earnings per share.

	Nine months ended Three months ended September 30 September 30
	2021 2020 2021 2020 $ $ $ $
Adjusted for: Gain on disposal of property, plant and equipment (Loss) income attributable to shareholders of the Company	(2,507) 172 768 (11,021) (42) (102) (652) (428)
Headline (loss) earnings attributable to shareholders of the Company	(2,549) 70 116 (11,449)
Headline (loss) earnings and diluted headline (loss)earningsper share	(0.02) 0.00 0.00 (0.12)

Page 27

Notes to the condensed interim consolidated financial statements For the three and nine months ended September 30, 2021 (Expressed in thousands of U.S. dollars, except for per share amounts)

Eastern Platinum Limited

12. Settlement gain (loss)

• (a) Settlement with the former officers and directors of the Company

On June 21, 2021, the Company reached a settlement with the former officers and directors of the Company concerning the claims filed against them in relation to the agreements entered with Ingwenya Incorporated (“Ingwenya”) and Serina Service AG (“Serina”) on behalf of Eastplats, together with its subsidiaries Eastplats Acquisition Co. Ltd. and Eastern Platinum Holdings Limited (collectively, along with Eastplats, the “Eastplats Companies”) dated June 30, 2016, pursuant to which $13,367 was transferred to Serina and Ingwenya (see Note 13 (d)) and certain other related disputes. The settlements of the filed lawsuits provide for an amount of Cdn$4,000 (approximately $3,258) in cash, which was paid to the Company.

• (b) Settlement with AlphaGlobal Capital Inc.

On June 26, 2020 the Company reached a settlement agreement with AlphaGlobal Capital Inc. (“AlphaGlobal”) to dismiss all claims against the Company and its subsidiaries and to release the Company from any and all claims that AlphaGlobal may have against the Company or its subsidiaries (the “Claims”), in exchange for the issuance of 8,000,000 common shares of the Company (the “Common Share”) at a deemed subscription price of Cdn$0.235 per share, 6,000,000 common share purchase warrants exercisable at Cdn$0.24, each share purchase warrant entitling the holder to acquire one Common Share of the Company for a period of two years (the “Warrants”), and the payment of ZAR9,000 (approximately $518) (the “AlphaGlobal Settlement”). The 8,000,000 common shares were valued to be $1,702 based on the Company’s stock trading price at the issuance and the 6 million warrants were valued to be $564 based on the Black-Scholes options pricing model. The Company recorded a settlement loss of $2,787 during the second quarter of 2020.

13. Contingencies

The Company is subject to claims and legal proceedings arising in the ordinary course of business activities, each of which is subject to various uncertainties. It is not possible to predict the outcome of such claims and the result of which may be resolved unfavorably to the Company. These include the following matters:

• (a) On November 6, 2018, the Company received a petition filed with the Supreme Court of British Columbia, by 2538520 Ontario Limited (“253”), a shareholder of the Company, seeking leave from the court to commence a derivative action on behalf of the Company against certain of its current and former directors in relation to the approval of the transactions between the Company and Union Goal. The Board of Directors of the Company formed a special committee consisting of three non-management Directors (the “Special Committee”) to review the petition and make a recommendation on the appropriate action. Following its detailed review, the Special Committee recommended opposing this petition, and this recommendation was accepted by the Board of Directors. As such, the Company filed its opposition to the petition and was provided security for costs. In June 2019 the petition was heard by the court and was dismissed on August 27, 2019. On September 27, 2019, the petitioner filed an appeal of the judgement which was heard on June 1, 2020 and dismissed on November 16, 2020. In January 2021, 253 sought leave to appeal to the Supreme Court of Canada, which was declined on May 27, 2021. The Company is seeking recovery from 253 of the costs incurred in responding to 253’s unsuccessful petition and appeals.

Page 28

Eastern Platinum Limited

Notes to the condensed interim consolidated financial statements For the three and nine months ended September 30, 2021 (Expressed in thousands of U.S. dollars, except for per share amounts)

13. Contingencies (continued)

• (b) On February 7, 2020 253 and its CEO, Rong Kai Hong, (“Plaintiffs”) filed a further claim regarding various allegations, including that the Company was acting to oppress the Plaintiffs’ rights among other claims. Several of these claims are similar to the derivative action that was dismissed by the Court (appeal denied). The Plaintiffs seek, among other relief, orders requiring a change to the Company share ownership, election of new Directors, several changes to senior management and damages of $50,000 (or such greater amount as may be proven at trial) from the Company, certain present and former Directors and Officers, and separately seven other listed defendants.

The Company intends to apply to dismiss the lawsuit. No provision is made in the consolidated financial statements as the Company assessed the allegations have no merit.

• (c) In December 2020, the Company received a petition filed with the Supreme Court of British Columbia, by Xiaoling Ren, a shareholder of the Company, seeking leave from the court to commence a derivative action on behalf of the Company against certain of its current and former directors. Ms. Ren is represented by the same law firm that filed a similar petition in November 2018 for 253, which was dismissed in 2019, the appeal denied by the British Columbia Court of Appeal in November 2020 and application for leave to appeal to the Supreme Court of Canada declined in May 2021, as discussed in (a) above.

The Company filed a response seeking a dismissal of the petition as an abuse of process. Following a hearing of the Company’s application to strike or dismiss the petition, the Supreme Court of British Columbia did not determine the Company’s application and instead adjourned the matter on its own motion. The Company has filed a Notice of Appeal asking the Court of Appeal to overturn the decision to adjourn the application and substitute its own order striking or dismissing Ms. Ren’s petition. No provision is made in the consolidated financial statements as the Company assessed the allegations have no merit.

• (d) On June 30, 2016, two days after concluding the sale of CRM (which agreements were subsequently terminated), the former management of the Company purportedly entered into a number of written agreements (the “2016 BEE Buyout Transactions”) with Ingwenya and Serina (collectively the “Vendors”) to acquire/cancel all of the interests previously held by the Company’s black economic empowerment partners (the “BEE Partners”) in the Company’s South African projects except for the 17.65% equity interest in Afriminerals Holdings (Pty) Ltd. (“Afriminerals”) for a total of $13,367. The Vendors represented to the Company and to its relevant subsidiaries that the Vendors are or will be the registered and beneficial owners of the respective equity interests in the Company’s South African projects as at the closing date defined under the agreements of the 2016 BEE Buyout Transactions. The 2016 BEE Buyout Transactions consist of the acquisition of (i) 44.12% equity interest in Gubevu for a total of $8,955 and an 18% equity interest in Lion’s Head Platinum (Pty) Ltd. (“Lion’s Head”) for $1,099 from Ingwenya; and (ii) 8% interest in Lion’s Head for $502, a 5.89% equity interest in Gubevu for $1,194 and a 33.35% equity interest in Afriminerals for $1,617 from Serina.

In 2020, the Company was provided with certain documents entitled “Settlement Agreement” showing that Serina, Ingwenya and the BEE Partners had purportedly agreed to nullify and reverse the transactions among them with the result that the BEE Partners’ interests (save for the 17.65% equity interest in Afriminerals) had reverted to Serina and Ingwenya, effective as of 2017. In 2017, the Company also received notification on behalf of the BEE Shareholders acknowledging they no longer considered themselves as the Company’s BEE Partners. The Company was not a party to these agreements nor provided with all of the background details concerning those arrangements.

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Eastern Platinum Limited

Notes to the condensed interim consolidated financial statements For the three and nine months ended September 30, 2021 (Expressed in thousands of U.S. dollars, except for per share amounts)

13. Contingencies (continued)

The Company notes that as a result of the Settlement Agreements, the BEE Buyout Agreements and the information provided to it on behalf of the BEE Partners, the Company no longer had BEE Partners as from June 2017. South African mining regulations require certain levels of BEE ownership upon a party acquiring mining rights. The Company believes that it is and will remain in compliance with the applicable BEE requirements under the “once empowered, always empowered” principle under the applicable South African mining laws, as stated in September 2021 by the High Court (Gauteng Division, Pretoria) in South Africa as a result of a court challenge by the Minerals Council of South Africa. Failure to address any such alleged noncompliance may negatively impact the Company’s operations and value of its assets and could lead to the Minister seeking to cancel or modify the mining rights under the Mineral and Petroleum Resources Development Act. The Company remains committed to working with the Department of Mineral Resources and Energy (“DMR”) to ensure ongoing compliance.

• (e) On June 7, 2018, the Company filed a claim in the Supreme Court of British Columbia against Serina and Ingwenya in relation to the payment of $13,367. The Company filed an application for default judgment against Serina in the British Columbia Supreme Court in December 2018, and default judgment was granted in 2019, as Serina provided no response to the claim. The Company has been unable to successfully contact either Serina or Ingwenya to date and any recovery of the funds or judgement appears remote. No amount has been accrued on the Company’s financial statements for this claim as it would be a contingent amount if successful.

• (f) The Company has received a notice from the DMR of an appeal launched with the DMR with respect to the Company’s mineral license issued in 2012 relating to the Spitzkop property. In addition, the claimant has launched a dispute of the issue into the High court in South Africa for review. The Company, with the assistance of counsel, is addressing this matter and intends to defend this issue related to the validly issued mineral rights of Spitzkop. Further to this, the Company and the claimant are currently engaging to amicably resolve this matter.

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