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Eurasia Mining PLC

Monchetundra Update Sinosteel EPC H1 2019

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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

Christian Schaffalitzky / Keith Byrne

 

Tel: +44 (0)207 932 0418

 

WH Ireland Limited (Nominated Adviser & Broker)

Katy Mitchell / James Sinclair-Ford

 

 

Tel: +44 (0)161 832 2174

 

First Equity Limited (Joint Broker) 

Tel: +44 (0)20 7374 2212

Jason Robertson


Optiva Securities (Joint Broker)

Christian Dennis

Tel: +44 (0) 20 3137 1902

 



 

 

 

 


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 [email protected] or visit www.rns.com.
 
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