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West Kytlim and SinoSteel update

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RNS Number : 6374V
Eurasia Mining PLC
04 December 2019
 

 

Eurasia Mining plc

("Eurasia" or "the Company")

West Kytlim update

SinoSteel update

 

Eurasia Mining, the palladium, platinum, rhodium, iridium and gold producing company, operating the established West Kytlim Mine in the Urals, and also the operator of the Monchetundra Project two predominately palladium open pit deposits located 3km away from Severonickel, one of the largest Norilsk Nickel's base metals and PGM processing facility, near the town of Monchegorsk on the Kola Peninsula, is pleased to confirm that the Company remains in contact with all the relevant authorities in relation to its license applications and would like to confirm that both Monchetundra flanks and all the other applications are progressing well and on schedule within the timing as defined by the applicable laws. In particular Eurasia has just received the approval in writing from Rosnedra, Russian agency for subsoil use in relation to its Tipil license application. This is the final approval and the appropriate license is to be issued in due course.

Tipil license, West Kytlim

As announced on 17 June 2019 the new Tipil license (24.5km2) contains approximately 17 kilometres of river course and sedimentary units proven to host PGM deposits at the West Kytlim project. Geological data and historical mining information have been analysed by the Company's geologists and compiled in a report supporting the application, which includes exploration data generated by the Company in its earlier exploration licence. The application has been approved by the Russian federal bodies and requires only a formal meeting of the local mines commission. Further updates will be provided when that next step is reached.

Sinosteel EPC contact update:

As Monchetundra's flanks application is progressing, the Company keeps its EPCF contract in place with Sinosteel, which establishes the route to the Monchetundra Project's development. Sinosteel is a diversified and integrated base and industrial metals enterprise and a major importer of iron ore to China. The Sinosteel EPC financing covers 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 TGK, or a sub-contractor of its choosing, for engineering and pit development works in advance of mining. Once activated, the contract provides for a payout of the US$50M subcontract over a period of 36 months. The sub contract has not yet been activated by Eurasia as it continues to consider its options for the assets. In the meantime, the Company can trigger the start of the Sinosteel EPC contract, at any time at its discretion, until 2027. Accordingly, Monchetundra project remains 100% financed as previously announced. Further updates will be provided in due course as appropriate.

Christian Schaffalitzky, Chairman at Eurasia commented: 'The Directors are pleased that all our applications including the Monchetundra flanks and West Kytlim Flanks applications are progressing well and on schedule. And we look forward to the formal license issue, which is in line with our strategy to expand the production volumes at West Kytlim, to further increase our presence in the West Kytlim area and aim to grow the mine to strengthen our position as the largest alluvial operation globally. We believe we are now established as a dominant player in the PGM space in the region and look forward to scaling up our operation providing a low cost PGM solution that is sustainable over potentially several decades. We are also pleased to confirm that our Sinosteel EPCF contract remains valid and as yet we are not exercising our right for $50m payment option attributable to Eurasia's subsidiary TGK while talks with third parties are ongoing.

Tipil Area

The Tipil license area is 24.5km2. With Tipil the total ground licensed will stand at 95km2, which is inclusive of the Flanks Area (71Km2). These areas are adjacent to the current 21km2.

A graphic locating the above-mentioned areas within the West Kytlim mine, and the location of the Tipil Area and the previously approved Flanks Area is available on the Company's website at:

https://www.eurasiamining.co.uk/operations/west-kytlim

Shareholders are also encouraged to follow the progress at the mine site through the Company's media channels including:

VIMEO: https://vimeo.com/user71951711

TWITTER: https://twitter.com/eurasiamining

VOX MARKETS: https://www.voxmarkets.co.uk/listings/LON/EUA/

 

 

Eurasia Mining Plc

Christian Schaffalitzky/ Keith Byrne

+44 (0)207 932 0418

 

WH Ireland Limited (Nomad and Joint Broker)

Katy Mitchell / James Sinclair-Ford

+44 (0)161 832 2174

 

First Equity Limited (Joint Broker)

Jason Robertson

Tel: +44 (0)20 7374 2212

 

Optiva Securities (Joint Broker)

Christian Dennis

Tel: +44 (0) 20 3137 1902

 

The information contained within this announcement is deemed by the Company to constitute inside information under the Market Abuse Regulation (EU) No. 596/2014

 

Shareholders are reminded that the Company does have the following media channels including:

https://vimeo.com/user71951711

https://twitter.com/eurasiamining

https://www.proactiveinvestors.com/LON:EUA/Eurasia-Mining-PLC/

https://www.voxmarkets.co.uk/listings/LON/EUA/

 

About Eurasia Mining PLC (LSE: EUA)

Eurasia Mining is a long-established palladium, platinum, iridium, rhodium and gold focused production company quoted on the London Stock Exchange AIM market, with an operating PGM mine in the Ural Mountains palladium open pit deposit at Monchetundra.  In addition, Eurasia maintain an interest in the Semonovsky Gold in Mine Tailings Project, an asset demonstrating potentially low-cost new-term gold production potential.

Eurasia's two core projects are:

The West Kytlim operating mine (of which the Company owns 68%), which is the largest alluvial platinum reserve in the world currently, with 2,283 kilograms of raw platinum in reserves, and resources and resource potential to a further 10 tonnes of raw platinum. A single washplant has operated on site during 2018 and 2019, with further increases in production planned from multiple washplants. The mine was previously contracted to generate cashflow from which to finance further capitalisation of the asset. All contractors were retired from the operation in September 2019 and since then Eurasia has been operating on an owner operated (100% of revenue) basis.

The Monchetundra Project (of which the Company owns 80%), has in place (signed October 2016) an EPCF (Engineering Procurement Construction and Financing) contract with Sinosteel, a state-owned Chinese corporation focused on mining. This agreement fully finances the Project through building of the 1.7m tonnes per annum processing facility at the Monchetundra Project. This financing contract can be drawn down at the option of the Company, and to date the Company has not activated this option.


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [email protected] or visit www.rns.com.
 
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Quick facts: Eurasia Mining PLC

Price: 3.733

Market: AIM
Market Cap: £100.56 m
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