05 December 2018
Eurasia Mining plc (AIM: EUA)
Monchetundra Mine Permit - further steps following permit award
Following the Company's announcement dated 20 November 2018 made on the final award of a mining permit for the Monchetundra PGM and base metals mine, Eurasia Mining plc (AIM: EUA), the PGM and gold producing company, is pleased to offer further details of the now fully approved mine permit and the administrative steps following the final award which bring the matter to a successful conclusion.
The mine permit was awarded by government decree made public on 20 November 2018 (see RNS dated 20 November 2018). The mining permit is granted based on a previously issued discovery certificate and fully authorises mine construction at the circa 2Moz Pd equivalent state-approved reserve and resource (1.9Moz palladium dominant 2PGE as palladium, platinum and gold) with significant additional nickel and copper revenue streams. The Monchetundra Project is located adjacent to the town of Monchegorsk, 130km south of Murmansk on the Kola Peninsula, bordering Finland in Northwest Russia.
Highlights
· Mine permit now fully approved and authorised by the office of prime Minister Dmitry Medvedev.
· The Company has conducted telephone communication with RosNedra, the Russian Federal agency responsible for mining, confirming that an order to issue the license documentation has been forwarded by the Ministry of Natural Resources to RosNedra and that an official document detailing the permit will be forthcoming, in accordance with standard procedure.
· The one-time license payment will also be confirmed to the Company. Payment terms are set out on a 20/80 basis, ie 20% initially and 80% within the first 5 years of mine production.
· The Monchetundra Project, with an in-situ total reserve and resource value of approximately US$2.1 billion (an internal calculation based on London Metal Exchange November 2018 spot metal prices, and prepared for guidance only) is now licensed to mine and can continue to the construction phase.
· As previously announced, an Engineering Procurement Construction & Financing ("EPCF") contract is already in place with the Chinese state-owned major infrastructure project group Sinosteel, for 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 Terskaya Gornaya Kompany ("TGK"), or a sub-contractor of its choosing, for engineering and pit development works in advance of mining.
· The mining license is the first hard rock PGM mining permit to be issued in the Russian Federation since February 2016.
· The 1.9M oz Pd eq (with a 3:1 Pd:Pt ratio in favour of palladium based on production) reserve and resource with base metals credits are now permitted for extraction at two open pit locations, West Nittis and Loipishnune (for further details see announcement dated 31 May 2017).
Christian Schaffalitzky, Managing Director and Executive Chairman for Eurasia, commented: "We are thrilled and honoured to have received the final permission required to proceed and build a mine at our Monchetundra PGM and base metals 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.
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. The Company would like to thank the officials in all of the relevant ministries who have accessed the projects viability. 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.
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.
As regards funding requirements, our arrangements with Sinosteel mean the Company can move forward with the project's development without recourse to further dilution of its shareholder base.
Finally, we note the recent price gains in Palladium to an all-time high in November 2018 ($1,219USD/oz at the time of writing (LBMA Prices)) as being particularly beneficial to the project.
It is our intention to offer specific timelines and objectives for the projects development through 2019 in due course."
Overview and more via link below
https://www.moneyam.com/action/news/showArticle?id=6232225