Eurasia Mining: Revisited

Since then, a significant amount of work has been done at the Kola projects, which are held in joint venture with Anglo Platinum, and comprise three licence areas at Monchetundra, Volchetundra and West Imandra covering about 450 sq km.

These licences are in good company, with the Canadian groups Barrick Gold and Consolidated Puma Minerals Corporation carrying out advanced exploration and feasibility studies on nearby deposits along the same trend.

Exploration funding to the tune of $10 million is being provided by AmPlats as part of their 50% joint venture earn-in, and is deemed to be enough to cover all work until at least the end of 2008. 80% of the projects are held in the joint venture company ? Urals Alluvial Platinum - and the remaining 20% is owned directly by Eurasia, giving them a 60% interest overall in a portfolio with high potential.

In November, following weeks of delays at congested assay labs in St Petersburg, Eurasia were at last able to announce results for a drilling program of four target zones at Monchetundra. Zone 2 emerged as having underground mining potential, delivering grades increasing with depth from 4m at 1.7 g/t Pt+Pd at 75m depth to 3.6m grading 8.4 g/t Pt+Pd at 190m depth. In Zone 3, lower grade but potentially economic open-pittable mineralisation included 6.7m at 1.8 Pt+Pd some 90m below surface and 36m at 1.8 g/t Pt+Pd only 75m down. Overall, given the current prices of the two metals, the platinum:palladium ratio was encouraging at 0.6:1.

Volchetundra ? a 27km long and largely untested intrusion - was next on the menu, and drilling in late 2006 resulted in a new discovery. Hole VT-17, drilled to the northern side of the licence on a previously untested target, intersected thick areas of mineralisation. First came 44.6m at 1.7 g/t Pt+Pd encountered at 68m depth, though running with a high Pd:Pt ratio of between 1.5-3:1. At 145m down, a further 18.5m found 1.9 g/t, but here the palladium:platinum ratio was much more favourable at 0.3-1.1:1. Deepest of all, at 170m depth, lay a 1m section assaying 11 g/t Pt+Pd, again with a very favourable Pd:Pt ratio of 0.8:1.

Commenting on the results, Christian Schaffalitzky, Managing Director of Eurasia, said: "We are excited by the opportunity of exploring around this discovery. We are particularly encouraged by the occurrence of two types of higher unit value.? You can understand his meaning when you look at the price of platinum compared with the price of palladium, and review the balance of the two metals in the intersections above. PGM explorers are always on the qui vive for high platinum vs. palladium ratios, as it vastly improves profitability, a total reverse of the situation some years ago when palladium was the place to be!

A further round of results from Monchetundra were released in mid-April from drilling which had focused on the lower grade near surface mineralisation discovered in Zone 3 earlier in the year. Results ? all of which were contained in the first 175m of depth - included 15.3m at 2.20gm/t Pt+Pd, 11.3m at 2.93gm/t Pt+Pd, 21.3m at 1.92gm/t Pt+Pd and 18m at 1.66gm/t Pt+Pd. In all instances, palladium is dominant to a variable extent over platinum, ranging from 1:1 to 2.4:1.

These intersections represent at least two separate PGM bearing horizons that have been traced so far for several hundred metres and remain open both at depth and along strike. In view of the good widths, apparent continuity and low sulphide content Eurasia now believe that an open pit scenario at Monchetundra is workable, using flotation to produce a marketable high grade concentrate. Further drilling here will continue throughout the Spring and Summer of 2007 with resource block drilling being a priority.

And West Kytlim? Last August Eurasia said: ?In the central Urals, drilling at West Kytlim also continues to outline two alluvial platinum resources that the company hopes to develop in 2007. Assays from each of these areas are currently outstanding.? By May of this year, drilling was complete, and early results indicated average grades of platinum of 335 milligrams per cubic metre (mg/m3) - in a region where 100 mg/m3 can be commercially viable. This drilling, which focused on the area most likely to be mined first, was described by Eurasia as ?an important milestone in the completion of the bankable feasibility study?. Eurasia expects to complete a reserve report shortly to aid in the conversion of the exploration licence into a mining permit. Feasibility work is continuing and when completed, the BFS results will enable the Eurasia/Amplats JV to decide how to proceed. Ideas include using the facilities of Eurasia?s local partner, Production Artel Yuzhno-Zaozersky Priisk, although investment in a new washing plant and project finance options are also being considered. More bulk testing is planned for this summer.

About all other projects, Eurasia are reticent, including the search for gold and their 100% owned projects. But then working in Russia imposes a discipline in which Eurasia?s management are grand masters. ?Don?t say anything you don?t have to? might well be their mantra, and given some of the more recent developments in the natural resource sector in Russia, it might be a sensible course to take. In a recent interview with Proactive Investors, Christian Schaffalitsky was very guarded, and took care not to be specific about anything! He did however say that they had not yet finished making discoveries in the Kola peninsula, and that they were definitely preparing for mining at West Kytlim.

It?s clear that all eyes ? and hands - are on the Kola Peninsula where Monchetundra in particular is showing potential for an open-pittable deposit, with an initial resource likely to be published some time during 2007, if the correct inference can be drawn from what little the company do actually say.

Although long-term investors must be forgiven if they finally run out of patience with this close-mouthed and secretive operator, it is evident that AmPlats have not. In fact, their involvement with Eurasia has increased dramatically over the last 12 months, and they are happy to pay Eurasia a handsome fee to operate the Kola projects on their behalf during their earn-in period, as well as covering all exploration funding. At just £6.3 million market cap and with Kola slowly but steadily revealing its potential, plus a possibility of cash flow next year, there could be rewards ahead for those who possess tolerance and tenacity.