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EUA Eurasia Mining Plc

1.50
0.00 (0.00%)
Last Updated: 08:00:26
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Eurasia Mining Plc LSE:EUA London Ordinary Share GB0003230421 ORD 0.1P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.00% 1.50 1.45 1.55 1.50 1.45 1.50 1,235,654 08:00:26
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
Miscellaneous Metal Ores,nec 120k -5.84M -0.0020 -7.50 42.97M

Eurasia Mining PLC Projects update (1768O)

03/11/2016 7:00am

UK Regulatory


Eurasia Mining (LSE:EUA)
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RNS Number : 1768O

Eurasia Mining PLC

03 November 2016

Eurasia Mining plc (AIM: EUA)

("Eurasia" or the "Company")

Projects Update

The Company is pleased to update shareholders on progress on its three projects in Russia. Eurasia's West Kytlim platinum and gold project is now in production, first shipments of concentrate began in early September (see RNS dated 9 September 2016). The Monchetundra Project is in late stage development and has been bolstered by an Engineering, Procurement, Construction and Commissioning ("EPC") contract with Sinosteel Equipment and Engineering Co Ltd, while the Semenovsky Gold in Tailings Project remains under review as metallurgical test work for cyanide gold recovery nears completion.

Monchetundra, Kola Peninsula, NW Russia

As announced on Monday 10 October 2016, Eurasia has signed an EPC contract between Sinosteel (one of the largest Chinese stated-owned engineering groups), and Terskaya Gornaya Kompaniya ('TGK'), Eurasia's 80% subsidiary which holds the Monchetundra PGM licence near Monchegorsk, an industrialized area of the Kola Peninsula close to the border with Finland.

- Under the terms of the EPC contract, Sinosteel has undertaken to build a processing facility capable of treating 1.7 million tonnes per annum from two open pits within the Monchetundra licence and capable of extracting 130,000 oz of platinum equivalent per annum. The contract value totals US$176,000,000 with a US$50,000,000 subcontract assigned to TGK in respect of preparatory and pre-strip works.

- Sinosteel is to be responsible for debt finance covering 85% of the contract value with debt obligations assigned to TGK when the facility achieves production of 130,000 oz PGM equivalent per annum. The loan is assigned to TGK only on successful completion of the works such that Sinosteel are motivated to achieve design capacity on schedule. Interest is charged at a floating rate of 6 month LIBOR +3.5% per annum and the loan term set at 10 years with no penalty for early repayment.

- Following the success of the royalty-like structure signed and implemented on the West Kytlim project, Eurasia has entered into talks with an international engineering company to manage the mining operation at the Monchetundra project, and to work for the company as the owner's representative throughout the design and build phase of the Sinosteel EPC agreement and thereafter during the operation of the mine. It is envisaged that the structure used successfully at West Kytlim, where the mining operation is outsourced for a split on revenue, can be replicated at the Monchetundra project. Further updates will be made in due course.

West Kytlim, Urals

Mining and production of platinum continues at West Kytlim, with weather not stopping production and the forecast reasonable for the coming weeks. The Company will provide details of the final production figures and projected income on completion of the season's works. The trial mining operation has tested two washplants, one owned by Eurasia and refurbished on site, and another larger plant supplied by the contractor SK-Region Stroy. The information pertaining to the constitution and washability of gravels gained from these exercises will be instrumental in ensuring a smooth path to next season's production, as we approach the close of this year's mining season.

Semenovsky Tailings Project, Urals

Metallurgical testwork continues to investigate the details of the tailings composition, in view of the material being sourced historically from three mines with different mineralogy. This work will be completed shortly and then form the basis of an assessment by metallurgists for the optimal production route. Work is being carried out at SGS Chita and further announcements will be made in due course.

MD Christian Schaffalitzky commented:

"We have endeavored 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.

We believe the transaction is very much on trend considering Sino-Russian relations over the past number of years. Chinese firms are increasingly active in the Russian market in rare earths, PGM, base metals and precious metals. It was our intention to capitalize on this evolving relationship and to offset some of the development risk to a suitably qualified and experienced engineering firm with considerable banking and political reach. Sinosteel is, under the terms of the contract, highly motivated to deliver the plant as stipulated in the contract, because they will be responsible for $150 million until they reach the production level of 130,000 oz of platinum equivalent per annum.

Further outsourcing the running of the mine to an international company with experience in operating mines is now a top priority for Eurasia. 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 look forward to updating on developments in this regard in the near term."

Enquiries:

Eurasia Mining Plc

Christian Schaffalitzky/Michael de Villiers

+44 (0)207 932 0418

WH Ireland Limited

Katy Mitchell/Nick Prowting

+44 (0)161 832 2174

Beaufort Securities

Elliot Hance

+44 (0)207 382 8300

This information is provided by RNS

The company news service from the London Stock Exchange

END

UPDFSFFMEFMSEFF

(END) Dow Jones Newswires

November 03, 2016 03:00 ET (07:00 GMT)

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