August 11, 2010 / 3:22 PM / in 7 years

UPDATE 1-Eastern Platinum Q2 production declines, shares fall

* Q2 profit $3.4 mln vs $317,000 yr ago

* Production 30,820 PGM ounces vs 33,383 PGM ounces yr ago

* Shares fall 6 pct

Aug 11 (Reuters) - Eastern Platinum Ltd ELR.TO reported an 8 percent fall in second-quarter production, due mainly to the dismissal of some contract crews, sending its shares down as much as 6 percent. The company reported net profit attributable to shareholders of $3.4 million, compared with $317,000 a year ago.

However, operating cash costs were $882 per ounce, compared with $554 per ounce last year.

Production at the company, which produces platinum group metals (PGM) that include platinum, palladium and rhodium, fell to 30,820 PGM ounces from 33,383 PGM ounces a year ago.

“Production was lower than expected due to the dismissal of 15 contract stoping crews (out of a total of 58 crews) in May, and the resulting build-up and training of new crews,” Chief Executive Ian Rozier said in a statement.

The company said on-reef development and production will increase once the new crews have been properly inducted and trained.

“This should put us on track for a more profitable third quarter,” the CEO said.

Shares of Eastern Platinum were down 4 Canadian cents at C$1.04 Wednesday morning on the Toronto Stock Exchange. (Reporting by Bhaswati Mukhopadhyay in Bangalore; Editing by Anne Pallivathuckal)

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