Trade Finance Loan Agreement

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS DEFINED IN REGULATION NO. 596/2014 (AS IT FORMS PART OF RETAINED EU LAW AS DEFINED IN THE EUROPEAN UNION (WITHDRAWAL) ACT 2018) AND IS IN ACCORDANCE WITH THE COMPANY'S OBLIGATIONS UNDER ARTICLE 7 OF THAT REGULATION.

6 September 2024

Eurasia Mining Plc

Trade Finance Loan Agreement

Eurasia Mining Plc ("Eurasia" or the "Company"), the platinum, iridium, rhodium, ruthenium, palladium ("PGM") and gold mining company, is pleased to announce that it has entered into a trade finance loan agreement with Sanderson Capital Partners Limited ("Sanderson") for up to £2.5 million (the "Trade Finance Loan" or the "Loan").

Highlights:

·      As announced on the 28 August 2024, the purpose of the Trade Finance Loan is to provide the Company with working capital finance.

·      To assist with the management of the Company's working capital position, each of the Company's Directors has agreed to defer payment of accrued fees and expenses from the previous 12 months, along with any future compensation due whilst any part of the Trade Finance Loan remains outstanding.

·      Christian Schaffalitzky, the Company's Chairman, has pledged 94,619,517 of his ordinary shares in the Company as collateral for the Trade Finance Loan (the "Chairman's Pledge"). The shares will  be kept in escrow by Eurasia's solicitors (OBH Partners, Dublin) whilst any part of the Trade Finance Loan remains outstanding. No other security has been provided in respect of  the Trade Finance Loan.

·      The Trade Finance Loan is interest free and is repayable by 29 August 2025, or by another date as the parties may agree.

·      The Loan is convertible at Sanderson's election (save for during the first 90 days of the agreement, see below), at an average conversion price of 2.7p per share, a premium of 17% to the closing price of on 28 June 2024 (being the last trading day before the suspension of trading in the Company's shares).

·      Sanderson has agreed that it will not elect to convert any of the Trade Finance Loan to shares in Eurasia during the first 90 days the Trade Finance Loan is in place.

·      The Trade Finance Loan may be drawn down by the Company in five tranches, in each case at the option of the Company, subject to certain milestones being achieved (as described below).

·      The initial two tranches totalling £1.0 million are linked to the Company's proposed restoration to trading on AIM, which was also announced today and will become effective at 7.30am on Monday 9 September 2024.

The  principal terms of the Trade Finance Loan are as follows:

The Trade Finance Loan may be drawn down on the following basis: £250,000 immediately; £750,000 on or around 24 September 2024; £500,000 following the Company listing its shares on an additional Recognised Exchange; and the balance of the Loan (being tranches 4 and 5) subject to the Company entering into a term sheet to sell its Russian assets and signing a share purchase agreement relating to such a sale (of which there can be no guarantee).   

Sanderson may  elect to convert all or part of the outstanding Trade Finance Loan balance into such number of the Company's ordinary shares of 0.1 pence each ("Ordinary Shares") that represents the outstanding balance at the conversion prices of 2.5 pence for tranches one, two and three, and 3.0 pence for tranches four and five, representing 9% premium and a 30% premium respectively to the latest closing price of 2.3p on 28 June 2024 (prior to the Company's temporary suspension from trading on AIM).

The Trade Finance Loan is interest free. Eurasia will pay Sanderson a financing fee of 12.5% of the  total amount of the Trade Finance Loan facility to be settled in Ordinary Shares at a price of 2.3 pence per Ordinary Shares. On drawdown of any tranche, Sanderson will be paid a further fee of 5% of the amount drawn down, settled in Ordinary Shares at a price of 2.3 pence per share.

Sanderson will also be granted warrants over 54,347,826 Ordinary Shares in Eurasia, exercisable over a two-year period with an exercise price of 4.0 pence each, that represents 74% premium to the latest closing price of 2.3p on 28 June 2024.

Christian Schaffalitzky, Executive Chairman of Eurasia, has pledged 94,619,517 Ordinary Shares, out of his holding of 95,569,517 Ordinary Shares in the Company to be held in escrow by Eurasia's solicitors (OBH Partners, Dublin) for so long as part of the Trade Finance Loan remaining outstanding, being the only collateral provided for the Trade Finance Loan.

The grant of the warrants and any issue of new Ordinary Shares pursuant to the Trade Finance Loan is dependent upon the approval of share issuance authorities at the Company's next Annual General Meeting, details of which will be announced shortly (the "AGM").

Financial Position

When taken with the Company's current cash reserves, the £1.0 million from the first two tranches of the Trade Finance Loan is expected to provide the Company with sufficient working capital to meet ongoing obligations until September 2025.

In addition, the Company can elect to draw down on further tranches of the Trade Finance Loan (subject to achieving the milestones set out above) and Eurasia also intends to generate additional cash from sales of the Company's stored inventory of PGM concentrates.

Furthermore, in addition to the Trade Finance Loan, the Company is due VAT refunds totalling approximately £323,000 from HMRC. A case is also being prepared, based on proposals from two law firms, to represent Eurasia to recover a possible refund of circa £1.3 million from a third party in relation to a previous transaction.

The Company's cash reserves outside of Russia are held in GBP and USD accounts and therefore not directly or indirectly exposed to Rouble foreign exchange fluctuations.

Related Party Transaction

Christian Schaffalitzky is a Director  of the Company. The Chairman's Pledge therefore constitutes a related party transactions in accordance with Rule 13 of the AIM Rules for Companies.

Accordingly, the Company's Directors who are independent of the Trade Finance Loan (being all the Directors with the exception of Christian Schaffalitzky) consider, having consulted with the Company's nominated adviser, that the terms of  the Chairman's Pledge  is fair and reasonable insofar as the Company's shareholders are concerned.

Christian Schaffalitzky, Eurasia's Executive Chairman commented: "We are delighted that our long-term shareholder Sanderson Capital Partners reached out to help bridge the potential liquidity gap, should it arise. I have a long standing and successful business relationship with the partners of Sanderson including with Eurasia previously, where Sanderson helped fund the first production at West Kylim. Sanderson remains a long-standing shareholder that shares the Company's strategic goals, with the possible sale of our assets being our main focus".

Tanvier Malik, Founder and Partner of Sanderson commented: "Sanderson enjoys a strong relationship with Eurasia and has been supporting Eurasia over the long term from funding first production in 2016 to the most recent participation in a capital market transaction in 2020 at 22.5p. We are pleased to help Eurasia achieve its goals in the near future and we are delighted with the continued support and belief held by the Directors and major shareholders contributing alongside us, as our interests continue to be aligned with the Company".

For further information, please contact:

Eurasia Mining Plc

Christian Schaffalitzky

+44 (0)207 932 0418

SP Angel Corporate Finance LLP (Nomad and Broker)

Jeff Keating / David Hignell / Adam Cowl

+44 (0)20 3470 0470

Yellow Jersey PR (Financial PR) 

Charles Goodwin / Shivantha Thambirajah                              

+44 (0)207 932 0418

[email protected]

Notification of transaction by Person Discharging Managerial Responsibilities ("PDMR")