Although the Crocodile River in South Africa sounds a dangerous spot to tread water, it may prove to be one of the safer places to operate a platinum mine.

Eastern Platinum’s third-quarter results triggered a 4p slide in the company’s share price to 47p as its margins showed the strain of a strong rand, higher electricity charges and wage rises. The company’s operating costs rose 27 per cent in the quarter.

Louise Collinge, Evolution analyst, cut her rating on the stock to “reduce” from “add” after the results, arguing that with little short-term upside apparent, the stock looks likely to tread water. The target price was also cut to 38p from 48p previously.

However, Edison maintained its 78p valuation on Eastern Platinum’s shares, arguing that its flagship Crocodile River Mine is one of the lowest-cost platinum mines in South Africa and that the company is considering a plan to expand production.

There was more sparkle among the diamond miners with Firestone Diamonds gaining 1½p to 32½p after its full-year results. Excitement came as analysts pondered the upside at the company’s BK11 project in Botswana. The company is fully funded to pursue the development and could start production as soon as mid-2010 as it transfers equipment from a South African prospect that has been written off.

Evolution reiterated its “buy” rating despite cutting its target price to 50p from 60p. The broker argued that BK11 could be transformational which is not yet reflected in the share price.

The big mover on the day was D1 Oils which gained 48 per cent, or 2.87p, to 8¾p after the biofuels technology developer said that it has preliminary and conditional approaches from a number of companies.

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