Eurasia Mining (LON:EUA) today announced that it has raised £468,500 through an equity placing.

The proceeds will help the small cap mine developer continue its exploration activities over the next few months.

Through the placing 46.85 million shares are being issued priced at 1 pence each. Each investor is receiving one warrant for every new share that is subscribed for.

Stockbroking firm WH Ireland is facilitating the placing and the new shares are expected to join the AIM market on October 3. 

Chief executive Christian Schaffalitzky and non executive director Dmitry Suchov both participated in the placing, subscribing for 5 million and 9.5 million respectively.

Schaffalitzky now holds 20.9 million shares in the company, which equates to a 3.1 per cent stake. Meanwhile Suchov, who is already the company’s largest shareholder, now owns 234.5 million shares or 34.75 per cent.

Of the 9.5 million shares Suchov subscribed for 4.5 million were in lieu of salary.

Eurasia is focused on the development of alluvial platinum mining operations in Russia. It is currently awaiting the conclusion of the permitting process so that it can ontain a production licencefor its first project, but in the meantime it is also exploring the surrounding area.

As a result it recently booked Russian classified reserves for two additional areas within its exploration licence and it has subsequently applied to the authorities for a discovery certificate. After that it will have the opportunity to apply for additional production licences for those two areas.

Eurasia Mining (LON:EUA) shares shot up more than 20 percent this afternoon, as it extended an important exploration license and found a new area of palladium mineralisation.

The Monchetundra exploration licence, on the Kola Peninsula in Russia, has now been extended for 2 years.

It has also released results of a drilling programme, which tested the West Nittis area of Monchetundra for the first time. 

Drilling returned palladium mineralisation grading up to 10.28 grammess per tonne, and it also discovered a new ‘hanging wall zone’ of platinum group metals (PGM) mineralization.

"While we are delighted that the licence has been extended, we are also very excited by the new discoveries made at West Nittis,” managing director Christian Schaffalitzky said.

“The results greatly enhance the value of the Monchetundra licence and we look forward to seeing the results of further drilling in the coming months."

The microcap stock gained almost 0.25 pence, more than 20 percent, after the statement on London’s AIM market. Eurasia was last changing hands at 1.325 pence per share.

The new Monchetundra licence will now run until December 2012. The company has a 60 percent interest in the project, alongside its JV partner Anglo Platinum.

At West Nittis nine holes were drilled for a combined 1,316 metres, with the mineralized zone being confirmed in 7 holes. 

Here it intersected palladium equivalent grades of up to 10.28 grammes per tonne. 

Eurasia highlighted that drill-hole MT-79 was particularly significant. Here it discovered the hanging wall mineralisation, which had 2.66 grammes per tonne platinum and 8.2 grammes per tonne palladium.

With the new license in hand, Eurasia now plans to define the resource potential of the West Nittis zone. 

It will also focus on developing mine plans that will allow it to apply for a production licence. 

Premier is an AIM quoted investment company which is developing a new mineral resources strategy. Its stated objection is to create value for its shareholders through the acquisition of early stage mining projects.

For a fee yet to be determined, Eurasia will provide ongoing technical support and management to Premier in the implementation of this strategy.

Eurasia chief executive Christian Schaffalitzky has been appointed as a non-executive director of Premier to assist with this approach.

A further announcement will be made if any agreements relating to this arrangement are executed.

Schaffalitzky commented "We believe this is an exciting opportunity for Eurasia which will enable Premier to utilise our skill set whilst potentially creating an interesting diversification of Eurasia's exploration strategy."

The placing was arranged by WH Ireland, and the company is issuing 132 million new shares at 1 penny each.

"We are very pleased to receive this strong support from investors,” managing director Christian Schaffalitzky said.

“Now that our licence is extended at West Kytlim, we look forward to adding to the mining potential of the area.” 

Additionally the participants of the placing will also receive warrants (with one warrant issued for every two shares subscribed for), which allow them to buy another share at 1 penny each during the next 12 months.

On Friday the company announced that it extended the West Kytlim exploration license.

The licence over the platinum project in Russia’s Urals will now run for another two years until December 2012.

The work planned for this period will target further expansion of the total resource base via continuing exploration in additional identified prospective areas within the license area, which spans over 171 square kilometres.

Meanwhile, Eurasia continues to work on finalizing a production permit application.

“We are now looking forward to the granting of a production licence, which would allow us to begin platinum production at West Kytlim next summer,” Schaffalitzky said last week.

Mine preparatory work will commence once the production license area application is approved.

Eurasia said it now had no debt, while Deloan Investments has become the company’s largest shareholder with a 37.9% stake as a result of the reorganization. Eurasia’s pre-tax losses for the six months to 30 June widened to £2.02 million from £0.8 million a year ago, while losses per share increased to 0.87 pence from 0.64 pence for H1 2008.

On the operational side, the company reported “excellent progress” at its West Kytlim platinum project in the Urals and said initial reserves had been approved for the Bolshaya Sosnovka area, where a pre-feasibility study confirmed the viability of the project. Eurasia is currently awaiting feedback from the authorities regarding the paperwork for the mining license it submitted back in June.

“Looking forward, I am hopeful that at long last development plans for the West Kytlim project are reaching fruition. The timescale is still uncertain due to the permitting process but we look forward to seeing first platinum metal production in the near future,” said Chairman Michael Martineau.

Drilling on other areas of the project is ongoing, targeting the expansion of platinum resources and reserves. The company, which is developing license areas in the Kola Peninsula and the Urals jointly with the world’s largest platinum producer Anglo Platinum, said it would look for more partners to explore its license area in Kola, where fieldwork has been limited by “budgetary cutbacks”.

Eurasia reaffirmed its intention to expand activities in Russia beyond the current focus on platinum group metals (PGM) to other commodities such as gold.

Under the original Deloan subscription agreement, warrants to subscribe for 40 million new shares at 5p were issued. Eurasia propose to increase this number to 200 million, exercisable at 1p.

Similarly, Series A Loan Note holders are to have their previously granted warrants raised to 47 million exercisable at 1p, as opposed to 9.4 million exercisable at 5p.

Both the Deloan convertible loan notes and the Series A Loan Notes will now convert at 1p per share instead of the previously arranged 5p per share.

The company also proposes to grant shareholder warrants exercisable at 1p per share within 9 months of their issue, in the ratio of one warrant per three shares held.

The capital restructure is necessary to allow new shares and warrants to be issued, as the share price is currently below the par value of the shares, which prohibits the issue of equity to raise funds. Eurasias propose to sub-divide each existing ordinary share of 5p into one ordinary share of 0.1p and one deferred share of 4.9p.

As the issue of the proposed warrants would result in Deloan Investments holding more than 30% of the company's share capital, a waiver of Rule 9 of the Takeover Code - which would entail Deloan being obliged to make an offer for the company - has been requested. If the Takeover Panel agree to such a waiver, shareholders will be asked to vote on a resolution at the General Meeting.

The end result, if all loan notes convert and if all warrants - excluding the shareholder warrants - are exercised, will be 535.4 million shares in issue, in return for the receipt of £2,470,000 of additional new funding from the exercise of warrants. The Series A warrant-holders have all committed to exercise in full within 14 days of the meeting, if the necessary resolutions are approved by shareholders. Additionally, if all shareholders take up their warrant entitlement, and exercise in full, a further 47 million shares will be issued, raising an additional £470,000 to further the company's progress.

Eurasia have been working closely with Dmitry Suschov, a director of the company, who wholly owns and controls Deloan Investments, for over a year and have developed plans to expand gold exploration activities in Russia and to use the current market conditions to secure investment opportunities in the minerals industry together. The directors see considerable opportunities but believe that if the company is to continue and flourish, it is essential that these new arrangements are put in place to enable flexibility in fundraising.

Christian Schaffalitzky, Managing Director, purchased of 1,939,643 shares, increasing his interest to 4,956,783 shares, or 3.5% of the Company.  Gary Fitzgerald, Non-Executive Director, purchased 1,454,732 shares, increasing his total interest to 2,881,301 shares, or 2.04% of the Company.

West Kytlin is a alluvial platinum project, and is part of a Joint Venture agreement with Anglo Platinum, the world’s largest platinum producer, whereby Anglo are paying for all exploration work up to the completion of a bankable feasibility study.

Eurasia added that it also received approval for the first stage of its Russian Feasibility Study over the Bolshaya Sosnovka River within the West Kytlim licence.

“The Company is currently submitting a resource and reserve statement to the relevant authorities for approval and registration, as part of the process for obtaining a comprehensive mining licence,” the company said.

“Exploration drilling is continuing to expand the area of reserves and potential resources in a number of areas within the licence area. In addition, bulk samples have been processed as a check of grades obtained by drilling as well as for metallurgical test work.”