K2 Principal Fund L.P. to Vote Against the Incumbent Board of Eastern Platinum at the Company's Annual General Meeting

TORONTO, June 29, 2016 /CNW/ - K2 Principal Fund L.P. ("K2"), a significant shareholder of Eastern Platinum Limited ("ELR") (TSX:ELR), announced today that it is very concerned about the questionable transaction announced by ELR yesterday pursuant to which Hebei Zhongheng Tianda Platinum Co. Limited proposes to acquire ELR's Crocodile River Mine for $50 million net of transaction costs and unspecified "amounts payable to certain minority interests" which "remain to be determined". As such, the amount that ELR will actually receive is unclear, and could be significantly less than $50 million. This transaction follows on the heels of the oft-delayed and ultimately unsuccessful proposed transaction that was originally announced on November 7, 2014 pursuant to which Hebei Zhongbo Platinum Co. Ltd. was to acquire all of ELR's South African platinum group metal business for $225 million, net of unspecified "amounts payable to certain minority interests".

As result of its concerns, at ELR's annual general meeting scheduled for July 5, 2016 (the "AGM"), K2 intends to withhold from voting for the incumbent board of directors that was responsible for the current proposed transaction, the previous failed transaction and a significant destruction of shareholder value. By withholding its votes from the incumbent board, K2 seeks to emphasize its strong dissatisfaction with the board's performance and deliver a strong message that company management must be held more accountable going forward. Despite the claims in the company's management information circular citing "performance in the top tier of platinum producers" and "more experienced, better qualified directors", the company's performance has been hugely disappointing to shareholders.

ELR now proposes to sell its only production-ready asset at a fraction of the price implied by the previous proposed transaction and without seeking shareholder approval. It also appears that the company does not plan to return any of the proceeds from the transaction to its shareholders. Based on the company's track record over the past three years of disproportionately high expenses and enormous internal compensation payments - showing a consistent disregard for shareholder interests – K2 has no reason to believe that the current board and management team will use the proceeds from the proposed transaction in a way that will increase the value of the company.

K2 does not believe that the current board and management is acting in the best interests of shareholders and will accordingly be withholding its votes from the incumbent nominees at the AGM. The proxy voting deadline for the AGM is June 30, 2016 at 10 a.m. PST. Any beneficial shareholder who wishes to change a previously submitted proxy in order to withhold its votes in respect of the incumbent nominees should contact its broker or other intermediary to make the necessary arrangements.

K2 holds in aggregate 9,228,900 common shares of ELR, representing 9.9% of ELR common shares as at May 11, 2016, the record date for the AGM.

SOURCE K2 Principal Fund L.P.

K2 & Associates Investment Management Inc., 1-416-865-2735, [email protected]