Eurasia Mining plc (LON:EUA) chief executive Christian Schaffalitzky told investors that the company is “thrilled and honoured” to have received final permission to build a mine at the Monchetundra platinum and base metal project.
“This permission and indeed recent milestones achieved by Eurasia with the Monchetundra project are the culmination of many years of hard work and conviction to pursue a PGM project in an emerging PGM district and we are extremely thankful to the cooperation we have received at local and federal level in the jurisdiction we have chosen to operate in,” Schaffalitzky said in a statement.
“This is the start of a new chapter for the company and its ambitions.”
“Our commercial arrangements regarding the Monchetundra project development can now be realised at this large low cost PGM and base metals project.”
More details are incoming
The company said that it has had communications with the RosNedra, the government agency responsible for mining, which said that an official document detailing the permit will be forthcoming.
Details of a one-time licence payment is anticipated, with the company expecting it will be required to pay 20% of the fee upfront and 80% over the first five years of mine production.
First hard rock PGM mine for years
Eurasia highlighted that this is the first hard rock PGM mining permit to be issued in the Russian Federation since February 2016.
Monchetundra has an in-situ total reserve and resource value of approximately US$2.1bln (a company estimate, based on LME spot prices for November).
The project’s 1.9mln ounce reserve and resources can, under the permit, be extracted at two open pit locations (West Nittis and Loipishnune).
The company has put in place an engineering procurement construction & financing (EPCF) contract with Sinosteel, a Chinese state-owned major infrastructure project group. The contract is worth US$176mln.
Eurasia highlighted that its arrangements with Sinosteel mean it can move forward with the project's development without recourse to further dilution of its shareholder base.
Meanwhile, a US$50mln sub-contract is to be assigned to Terskaya Gornaya Kompany (TGK), a 80% owned subsidiary of Eurasia, or some other sub-contractor.
A sea change for Eurasia
“The issue of this mining permit represents a sea change for the company, as this is a major project which the company intends to develop alongside our West Kytlim PGM and gold mine, which achieved steady state industrial scale production during 2018,” Schaffalitzky said.
“It is also significant that very few mine permits are issued for PGM projects, reflecting the lack of investment in this sector, something that we the Directors feel makes this project particularly valuable.
“The vast majority of permits issued in Russia are for gold projects, and it is also quite rare in the current phase of the resources cycle to find an exploration company taking a project all the way from green fields exploration through mine permitting.
“Now we progress onto mine development and production, at Eurasia's second mining license, based on its own discoveries, issued in less than three years.”