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Eurasia Mining to bring in contractor to run Monchetundra

Published: 07:31 03 Nov 2016 GMT

picture of platinum ore
Eurasia wants royalty income from Monchetundra's platinum

Russia-based Eurasia Mining plc (LON:EUA) intends to contract out the running of its new platinum mine at Monchetundra, with its income to be generated from royalty payments.

Last month, Eurasia unveiled a huge development deal with Chinese giant Sinosteel, which will build both the mine and processing plant through a contract worth US$176mln.

Now Eurasia also wants to appoint an engineering firm to run the operation in a similar manner to the royalty agreement signed in May at its West Kytlim alluvial platinum project.

Here, local firm SKRS will carry out the mining and processing with Eurasia receiving 30% of the revenues generated.

Talks have started with an engineering firm both to manage Monchetundra and be the owner's representative throughout the design and build phase of the Sinosteel contact.

“Further outsourcing the running of the mine to an international company with experience in operating mines is now a top priority for Eurasia,” said Christian Schaffalitzky, Eurasia’s managing director.

“Engaging such a group to act as owner's representative during plant construction aims to ensure the plant is built in line with best international practice.

"We have endeavoured to replicate the structure, which has been proven to work at West Kytlim, at the Monchetundra Project with an additional contract to cover the considerable capital outlay.

“We believe this presents a route to project development which minimizes exposure for Eurasia, further shareholder dilution, and allows the project to be developed despite a continuing resource sector downturn.”

He added that Sinosteel was highly motivated to deliver the plant as stipulated  as it will be responsible for US$150mln production reaches 130,000 oz of platinum equivalent per annum.

Elsewhere, the Semenovsky Gold in Tailings Project remains under review as metallurgical test work for cyanide gold recovery nears completion, while trial mining is underway at West Kytlim to establish the gravel constituency and how much washing it will need. 

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