TIDMEUA
RNS Number : 8364I
Eurasia Mining PLC
13 August 2019
Eurasia Mining plc (AIM:EUA)
("Eurasia" or the "Company")
Monchetundra Update Sinosteel EPC H1 2019
Eurasia Mining PLC, the palladium, platinum, rhodium and gold
producing company, is pleased to provide an update on developments
at the Monchetundra Project in the first half of 2019. Eurasia is
developing its Monchetundra Project towards production following
the issue of a mining permit for the circa 2Moz (2PGE + Gold)
palladium dominated deposit (as announced on 20 November 2018).
A Engineering, Procurement and Construction (EPC) contract, with
an associated mine finance package has been signed with Chinese
company Sinosteel. Eurasia and its contractors are making progress
on the production preparation activities stipulated by the EPC as
TGK's (Eurasia's 80% subsidiary) responsibilities to initiate the
payments from Sinosteel to TGK under the subcontracted works for
the total amount of $50m, $26.5m of which will be paid by TGK to
Sinosteel, as TGK's contribution equity contribution to the EPC
(the remaining $149.5m is a 10 year loan facility at 6mLIBOR +
3.5%).
Highlights:
-- Flanks area application finalised and approved by Eurasia's
board for submission to Rosnedra. Eurasia's TGK as the production
license holder has exclusive rights for the flanks that are
expected to increase the resources severalfold
-- The Detailed Project Design Report (including open pit
design, detailed land survey of the two open pit sites, etc.), the
preparation of which was contracted to Central Kola Expedition
(CKE) is now ready
-- Agreement signed with Intec International Projects Pty Ltd to
look at process improvements to further enhance the profitability
of the project
-- Eurasia and its contractors are making good progress on the
production preparation activities stipulated by the EPC with
Sinosteel as TGK's (Eurasia's 80% subsidiary) responsibilities to
initiate the payments from Sinosteel to TGK
Christian Schaffalitzky, Chairman at Eurasia, added: "Our team
and our contractors at CKE continue to progress our plans for the
development of this palladium dominated open pit mine. It is our
intention to significantly increase activity on site over the next
6 to 12 months to accomplish activities stipulated by the EPC with
Sinosteel as TGK's responsibilities to initiate the payments from
Sinosteel to TGK. We look forward to launching this mine walking in
the steps and learning from our experience from the successful mine
launch at West Kytlim".
Detailed Project Report
Eurasia's long-standing working partner at the Monchetundra
Project, the Central Kola Expedition (CKE), which has a good track
record working with Barrick, Norilsk Nickel, B2Gold and others,
commenced site work in May. The specific physical works agreed were
related to the open pit design, and a detailed land survey of the
two open pit sites.
The area of the surface facilities and the related
infrastructure is also being surveyed. Provisional locations have
been determined and approved by government agencies in approving
the Mining Permit, however a further level of precision is required
for mining. Forestry clearing and Forestry commission approval is
not considered to be a significant factor in infrastructural
planning, and it is not expected that any population centres will
be directly affected by the open pit mines development.
CKE has also prepared a work proposal for trial mining
locations, which can commence under Russian legislation on already
approved C2 category ore body.
Sinosteel and EPCF summary
...
Sinosteel (http://en.sinosteel.com/index.html) is a diversified
and integrated base and industrial metals enterprise and a major
importer of iron ore to China. They have also built chrome and
nickel operations in South Africa, China, Indonesia and Australia.
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.
Eurasia and its contractors are making progress on the
production preparation activities stipulated by the EPC as TGK's
(Eurasia's 80% subsidiary) responsibilities to initiate the
payments from Sinosteel to TGK under the subcontracted works for
the total amount of $50m, $26.5m of which will be paid by TGK to
Sinosteel, representing TGK's equity contribution to the EPC (the
remaining $149.5m is a 10 year loan facility at 6mLIBOR + 3.5%).
Further details of this arrangement are set out in the announcement
dated 10 October 2016.
Flanks application
A 'Flanks' licence was finalised, to be submitted Rosnedra in
September 2019 on areas surrounding the mine sites. This
application is made under the 5km exclusivity zone granted to
mining licencees around approved reserves. As a minimum the Company
believes that this application will cover on-strike extensions of
identified ore bodies, and where ultimately mining can continue.
Furthermore, the Directors understand a number of deposits are
adjacent to the Monchetundra deposits, some of which may contribute
directly to the long-term development of a PGM-base metal operation
with toll treatment over distances of 2 to 8km. These prospects and
potential applications are now being reviewed in detail, with
further applications to be made going forward as appropriate.
A further statement on this application, including the quantum
of already approved resources within the area to be applied for,
will be made if an application is submitted.
Intec International Projects Pty Ltd
Discussions with specialist laboratories for detailed
metallurgical process improvement , with the aim of enhancing
profitability, have been ongoing through 2019 and an agreement has
now been signed with Intec International Projects of Australia to
look at further process optimization to add value by the Intec
Process to the final product, in particular to produce a high value
palladium final product on site. The Intec Process comprises
patented process technologies for precious and base metal ores, to
bring further metallurgical profitability enhancement to the
project having successfully implemented their technologies
internationally since 1994. For further information see
http://www.intecip.com.au/home.html
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 Tel: +44 (0)207 932 0418
Christian Schaffalitzky / Keith
Byrne
WH Ireland Limited (Nominated Adviser Tel: +44 (0)161 832 2174
& Broker)
Katy Mitchell / James Sinclair-Ford
First Equity Limited (Joint Broker) Tel: +44 (0)20 7374 2212
Jason Robertson
Optiva Securities (Joint Broker) Tel: +44 (0) 20 3137 1902
Christian Dennis
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END
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