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Eurasia Mining makes up for lost time in Russia

As well as being a shareholder, Metal Tiger can partner on future projects undertaken by Eurasia in Russia.
Picture of a platinum dore bar
Alluvial platnum is the short term goal at West Kytlim

Eurasia Mining (LON:EUA) has been making up for lost time since the mining permit for its West Kytlim alluvial platinum prospect in Russia finally came through last year.

Indeed, now allied with the aggressive resource company investor Metal Tiger PLC (LON:MTR), Eurasia is progressing on three fronts and looking for more.

As well as being a shareholder, Metal Tiger has an option to be a partner in future projects undertaken by Eurasia in Russia.

Partnership moving ahead

The idea being it will provide the local expertise and Metal Tiger the funding clout.

At Semenovsky in Bashkiria, the Eurasia/MTR joint venture has just had a pre-feasibility study for the gold tailings project (STP) approved by the local mines department.

The pair have agreed an option with current owner OOO Golden Sands to take a 67% stake.

A processing plant at the Semenovsky mine ran for 55 years up to 1998 processing oxide ores from four local deposits.

Eurasia had a six month window to carry out technical studies and other due diligence, but this has recently been extended by a further three months to August.

This will allow further metallurgical testing and for the final agreement to be thrashed out between Eurasia/MTR and OOO Golden Sands.

Construction costs for the proceessing equipment would be US$5mln, which could be paid back within a year, while early internal projections suggest gross revenue of approximately US$57mln over 8 and half years.

Net cash inflow would amount to approximately US$29mln or US$3.5m per year.

Legacy projects also moving ahead

Drill results from Monchetundra, a platinum project in the far northwest of Russia, are also due shortly and should lead to a resource estimate.

At West Kytlim, meanwhile, the plan is to bring production on line as soon as possible to generate cashflow.

Last month, RostekhNadzor (the Federal Service for Ecological, Technological and Nuclear Supervision) approved the Technical Design Report and the mine plan.

A "mining allotment" certificate was also been issued permitting work at Eurasia's first area of development at Malaya Sosnovka.

This was the final approval required to start mining. 

West Kytlim is a unique opportunity said Christian Schaffalitzky, Eurasia’s managing director, in an interview last year. as it is low capital cost but potentially high reward.

“The low capital cost is because we are simply collecting river sands from the licence area, then washing, bagging and delivering to the local refinery for platinum production.

“It is as low a capital outlay as one could expect for a producing asset and is so because we are mining alluvial platinum rather than a typical hard rock deposit that requires extensive processing and treatment.”

Funding

Eurasia has recently paid off a short-term bridging loan from finance house Sanderson with a placing that raised £500,000.

Priced at 0.55p, Eurasia said the money over would also fund completion of the work at Monchetundra and the test work at Semenovsky.

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