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Eurasia Mining beginning to build scale in platinum group metals portfolio, helped by track record of competence in Russia
Monchetundra Mine Permit License Fee
Eurasia Mining plc (AIM: EUA)
("Eurasia" or the "Company")
Monchetundra Mine Permit License Fee
Eurasia Mining plc (AIM: EUA), the PGM and gold producing company, is pleased to announce that, following from the official notice of the final award of the Monchetundra Mine permit, Rosnedra, the Russian Federal agency responsible for mining, has yesterday (06 December 2018) given notice of the one-time license payment terms.
The size of the payment has now been calculated by Rosnedra as RUR20,843,788, 20% of which (RUR4,168,758 or £48,853) is to be paid within 30 calendar days of registration of the licence at the state register of subsoil licences. The remaining 80% of the one-time license fee is payable within 5 years of the date of the licence's registration. These terms are stipulated in Russian subsoil licensing laws where a licence has been awarded to a Company based on a state approved mineral resource which the Company has itself identified.
It is expected that the official document will be transferred to the Company in the coming weeks and it is the Company's intention to the pay the initial 20% of the license payment from available funds on registration of the license. The balance is expected to be met as part of the capital development of the project.
Background to the Monchetundra Project.
The Monchetundra project contains a state approved reserve and resource of circa 2Moz Pd equivalent (1.9Moz palladium dominant 2PGE as palladium, platinum and gold) with significant additional nickel and copper revenue streams. The Project is located adjacent to the town of Monchegorsk, 130km south of Murmansk on the Kola Peninsula, bordering Finland in Northwest Russia. A mine permit was awarded to the Company and was fully authorised by Prime Minister Dmitry Medvedev in late November 2018. Further communication with Rosnedra has proceeded regarding the official transfer of the physical mine permit, which the Company is obliged to register with the state. This and other administrative items are expected to proceed as per due process in the second and third weeks of December 2018.
The Monchetundra Project has an in-situ total reserve and resource value of approximately US$2.1 billion (an internal calculation based on London Metal Exchange November 2018 spot metal prices, and prepared for guidance only) and is now fully permitted for mining.
As previously announced, an Engineering Procurement Construction & Financing ("EPCF") contract is in place with the Chinese state-owned major infrastructure project group Sinosteel, for 85% (or US$149.6M) of a total contract value of US$176M. A US$50M sub-contract is specified within the contract and is assigned to Eurasia's 80% subsidiary Terskaya Gornaya Kompany ("TGK"), or a sub-contractor of its choosing, for engineering and pit development works in advance of mining.
The 1.9M oz Pd eq reserve and resource (with a 3:1 Pd:Pt ratio in favour of palladium based on production) with base metals credits is now permitted for extraction at two open pit locations, West Nittis and Loipishnune (for further details see announcement dated 31 May 2017).
Currently, state approved reserves and resources within the Monchetundra Project comprise Russian standard C1 and C2 categories of 59 tonnes (1.9 million ounces) palladium equivalent (2PGE + Gold with a Palladium to Platinum ratio of 3:1 based on production ounces) at two open-pittable locations, West Nittis and Loipishnune. These open pits also contain significant base metal credits including 28,124 tonnes of copper, 30,410 tonnes of nickel. The Directors consider the project to be unique globally in being led by high palladium grades, and that it represents a significant lower cost open pit mining operation which compares favourably to the relatively expensive underground operations in South Africa, the dominant player in the global PGM market.
This announcement includes inside information as defined in Article 7 of the Market Abuse Regulation No. 596/2014 and is disclosed in accordance with the Company's obligations under Article 17 of those Regulations.
Eurasia Mining PLC
Christian Schaffalitzky / Keith Byrne
Tel: +44 (0)207 932 0418
WH Ireland Limited (Nominated Adviser & Broker)
Katy Mitchell / James Sinclair-Ford
Tel: +44 (0)161 832 2174
First Equity Limited (Joint Broker)
Tel: +44 (0)20 7374 2212
Optiva Securities (Joint Broker)
Christian Dennis Tel: +44 (0) 20 3137 1902
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