Eurasia Mining PLC Kluchiki Reserve Drilling & Mine Season Update (0965F)

TIDMEUA

RNS Number : 0965F

Eurasia Mining PLC

25 October 2018

Eurasia Mining plc (AIM: EUA)

("Eurasia" or the "Company")

Kluchiki Reserve drilling & Mine season finishing on schedule and ahead of targets.

Eurasia Mining, the PGM and gold production company, is pleased to provide a further update from its West Kytlim Mine, the second largest alluvial platinum mine globally (after Kondyor, Russian Far East). A trommel and sluice based washplant has been operating at an industrial scale on site since May of this year, initially at the Malaya Sosnovka Area, and later also at Kluchiki.

Infill reserves upgrade drilling was carried out at the Kluchiki Area in 2017 and 2018. The Company can now report on these audited drilling results. A further update will follow when the reserves calculation undertaken by the Company, based on new information resulting from the drilling program, is reviewed at Uralnedra, the official body qualifying state approved reserves locally.

The mine season is now finishing, on schedule and with total produced raw platinum well in advance of Company estimates. Work at site is now focussed on preparations for the 2019 season.

The Company is also actively engaged in progressing the mine permit application for the Monchetundra Project on Kola Peninsula. Recent communications with the relevant authorities have been answered as appropriate and the directors are hopeful of a positive conclusion to the process in the near term. A further announcement will follow in due course.

Highlights:

- Total of 895m of regular diameter core drilling undertaken in the 2017 to 2018 drill program with a further 67m of large diameter core drilled to verify regular core grades.

   -     Grades recovered in line with expectations from current state approved resource. 

- Latest Company resource calculation, showing an increase in total contained platinum for the Kluchiki Area, has now been submitted for approval at Uralnedra.

   -     Evidence for bonanza grade ore pockets within the latest Kluchiki drilling results. 

- Work at the mine site now focussed on preparations for the next season of mining, to ensure a smooth start-up in spring 2019.

Christian Schaffalitzky, Eurasia Chairman has commented. 'These new drilling data are very much in line with our expectations from many years working in the area. The grades from the drilling program, and in our Reserve calculation are very much in line with our previous Resource and Reserve grades. Grades reported during the mining season have been far in excess of our Resource grades, as it is only through actually mining a deposit like West Kytlim that the true grade of the material can be measured; we have done our best to elucidate this in the section on nugget effect below. Our appreciation of the West Kytlim project's potential, and indeed it's value to the Company, has been recast during this first year of significant production, with total platinum produced at around 165Kg, or 165% of the Company's estimates. We also acknowledge the professionalism and performance of our partners Techstroy during 2018 and look forward to working with them next year. '

Nugget effect as measured during 2018 mining:

Raw Platinum, the mine product, occurs at all grain sizes from very fine to coarse nuggets. A pronounced nugget effect is observed as a marked increase from reserve grade to run of mine ore grades, and averages 3-5 times in reserve blocks mined to date on both Malaya Sosnovka and Kluchiki. Drill results are based mostly on sampling core from holes 170-200mm in diameter with a resulting volume in exploration samples of 10-12m(3) . Most of the finer fractions and metal passing 1mm and some metal from -2+1mm fraction are captured with this sampling method, as these fractions are more or less evenly distributed. Coarser fractions are less evenly distributed and therefore unlikely to be captured. During mining, all metal is captured, and the share of medium and coarse-grained metal and nuggets increases considerably. This results in an apparent and sometimes dramatic increase in grade, from reserve/ resource grade to reported mining grade. This is well known throughout the alluvial mining industry and attributed to what is termed the Nugget Effect.

Results of 2017/2018 reserves upgrade drilling at the Kluchiki Area

Resources and Reserves at Kluchiki are outlined as tabular bodies running east west on the banks of the modern Tylai River course. Exploration drilling traverses have been set out perpendicular to these deposits on a general northwest southeast trend. Drilling occurred as infill drilling on 6 traverses within the Kluchiki Area which spans a distance of more than 2.5 kilometers in an east west direction. A sample of results from three of these traverses, Lines 169, 171 and 194 (occurring in the far east, east and west of the Kluchiki Area respectively) have been chosen as representative of the overall results and are presented here below. Ore bodies, and drilling intervals are detailed in terms of sediment type or stratigraphic unit. Where a drilling interval passes through the boundary between one stratigraphic unit and another the drilling interval is shortened and a new drill interval begun. This relates to the differences in processing characteristics of each of the units.

Figure 1: Representative Kluchiki Reserves upgrade drilling results;

 
 Drill   Drill               from    to             Pt g/m(3) 
  line    hole   Drilling                  length 
  no.     no.     diameter                   (m) 
   169    14       regular    9.1   10.3      1.2     1.04 
   169    18       regular   10.6   12.2      1.6     1.41 
             including       11.8   12.2      0.4     2.90 
 
   171    34       regular   11.8   13.1      1.3     1.60 
             including       12.4   13.1      0.7     2.67 
   171    38       regular     18   20.4      2.4     1.78 
   171       including       18.8     20      1.2     2.79 
 
   194    84         large      3      4        1     1.59 
   194    86       regular      3    3.8      0.8     1.38 
   194    104        large    4.8    7.5      2.7     1.20 
             including          6    6.4      0.4     4.66 
   194    118      regular      6    7.6      1.6     1.17 
 

Kluchiki open pit - further details

Kluchiki open pit occurs within Tylai river system and within the West Kytlim mining license awarded to Eurasia's subsidiary Kosvinsky Kamen, valid until 2040. Reserves and resources were identified in the area and achieved state approvals as part of the feasibility study approved in early 2014 (see RNS dated 22 April 2014). As per the 2014 feasibility study and reserves report a total of 319kg raw platinum has been identified at Kluchiki.

Further infill drilling was undertaken at Kluchiki in 2017 and 2018 as part of a broader and continuing reserves drilling program at Kluchiki and also Bolshaya Sosnovka, an area targeted for development after Kluchiki. Approximately 895 meters of core drilling were undertaken at Kluchiki in 2017 and 2018 as well as 67 meters of large diameter verification drilling.

Russian standard C1 and C2 Reserves were recalculated for the Kluchiki Area following the 2018 drilling program. The revised calculation, has been submitted for approvals at Uralnedra. A complete reserves statement will be provided on receipt of confirmation of the reserves from the subsoil agency.

Our shareholders are again directed to the company's media outlets where coverage of the mine operation is ongoing. This includes: twitter.com/eurasiamining and the company's Vimeo channel at https://vimeo.com/user71951711

Consent for release

Christian Schaffalitzky, FIMMM, PGeo, CEng, is a director of the Company. He has reviewed the update and consents to the inclusion of the exploration information in the form and context in which it appears here. He is a Competent Person for the purposes of the reporting of these results.

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.

Enquiries:

Eurasia Mining Plc

Christian Schaffalitzky

[phone]

WH Ireland Limited (Nomad and Joint Broker)

Katy Mitchell / James Sinclair-Ford

[phone]

First Equity Limited (Joint Broker)

Jason Robertson

Tel: [phone]

Optiva Securities (Joint Broker)

Christian Dennis

Tel: [phone]

About Eurasia Mining PLC (LSE: EUA)

Eurasia Mining is a long-established platinum and gold focused production company quoted on the London Stock Exchange AIM market, with an operating mine in the Ural Mountains and a USD$2 billion dollar valued in-situ multi-commodity 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 second largest alluvial platinum reserve in the world currently, with 2,283 kilograms of raw platinum in reserves, with resources and resource potential to a further 10 tonnes of raw platinum. A single washplant has operated on site during 2018, with further increases in production planned from multiple washplants in 2019 and subsequent years.

The Monchetundra Project (of which the Company owns 80%), has state approved reserves and resources of ca 2 million ounces of palladium equivalent (predominantly palladium, and includes 28,124 tonnes of copper and 30,410 tonnes of nickel), resulting in a total in-situ metal value of approximately USD$2 billion, before metal recoveries and all costs. Eurasia 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 toones per annum processing facility at the Monchetundra Project.

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 [e-mail] or visit www.rns.com.

END

DRLQZLFLVBFBFBL

(END) Dow Jones Newswires

October 25, 2018 02:00 ET (06:00 GMT)