Eurasia Mining plc
("Eurasia" or the "Company")
Acquisition of 50% of Urals Alluvial Platinum Limited
Eurasia Mining plc, the platinum group metals and gold exploration and development company, is pleased to announce that it has entered into an agreement pursuant to which its wholly owned subsidiary Eurasia Investments Limited ("EIL") will acquire, from Rustenburg Platinum Mines (Cyprus) Limited ("RPM Cyprus") (indirectly a wholly owned subsidiary of Anglo American Platinum Limited ("Anglo American Platinum")), the remaining 50 percent of Urals Alluvial Platinum Limited ("UAP") which it does not already own (the "Acquisition"). The transaction will provide EIL with a 100 percent interest in UAP which holds its PGM projects in Russia, including the 171 square kilometre license area at West Kytlim which contains near to production-ready State approved platinum reserves with significant additional resources.
The agreement is conditional on RPM Cyprus and members of the Anglo American Platinum group obtaining South African exchange control approval. A further announcement will be made when the Acquisition completes.
Background to and reasons for the Acquisition
RPM Cyprus and EIL entered into a joint venture agreement ("JVA") in respect of UAP in August 2003 which governed the relationship between the parties and also established UAP in Cyprus as the operating company for, inter alia, alluvial platinum exploration in respect of licenses in the Ural Mountains in the Russian Federation, a region which historically has produced an estimated 500 tonnes of alluvial Platinum. Eurasia was appointed as Manager of UAP.
Initially exploration work focused on a number of projects, but the key project identified as having good potential was West Kytlim in the Sverdlovsk Oblast. A license over this area was granted in 2005 to the Russian holding company ZAO Kosvinsky Kamen, with UAP holding a 75 percent interest and a local partner, Yuzhno-Zaozersky Priisk, holding the remaining 25 percent. Exploration drilling, trenching, pitting and bulk sampling has been carried out over much of the license area since that time.
In parallel with work in the Ural Mountains, several new projects were targeted by UAP for acquisition on the Kola Peninsula in Murmansk Oblast, northwestern Russia. This acquisition was completed in 2006. Eurasia held a 20 percent direct interest in the two companies holding these projects with UAP holding 80 percent. After several years' work the Monchetundra license was retained and shows good potential for significant bedrock-hosted PGM mineralisation.
In 2009, following an Anglo American Platinum strategic decision to cut-back on the funding of mineral development projects outside of Southern Africa, RPM Cyprus exercised its rights under the JVA to suspend contributions to UAP. Eurasia continued exploration work on the West Kytlim and Monchetundra projects with EIL solely funding 100 percent of the work. As a result, EIL's contributions from 2009 to date have not been matched by contributions from RPM. Taking this into account, on the 19 June 2014 Eurasia, EIL and RPM Cyprus entered into an agreement that formalised the terms of the Acquisition announced today. Under the terms of the agreement, on completion RPM Cyprus will sell its 50 percent ownership of UAP, and novate all its rights and responsibilities under shareholders' loans from RPM Cyprus and an affiliate to EIL for a de minimis consideration and a full release from, and indemnification against, all claims, losses or liabilities which may arise in respect of UAP or its business.
Financial Information
In the year ended December 2012, which is the last audited accounts produced to date by the Company, UAP generated a loss of US$74,802 and had total assets of US$13,937,179.
Dr Michael Martineau, Chairman of Eurasia, commented:
"Eurasia has been executing and funding a work programme on the Monchetundra and West Kytlim projects for a significant period of time. Our work has produced attractive assets which, particularly in the case of West Kytlim, are nearing production. It is therefore an excellent outcome for Eurasia that we should enter this next phase with double the original interest in the projects. The doubling of Eurasia's equity interest in UAP also provides greater flexibility to bring in new partners or to restructure the holdings for improved efficiency of future operations, should the Company wish to do so. "
"We are very grateful for the encouragement and support that the Anglo American Platinum group has provided over the years of exploration, resource definition and license negotiation. "
Christian Schaffalitzky, Managing Director of Eurasia added:
"We believe the added opportunity attained by the Company through the Acquisition on completion will be very significant for shareholders".
Recently at West Kytlim, reserves have been approved for a multiple site alluvial mining operation that could operate for at least nine years. At Monchetundra, bedrock-hosted PGM and base metal mineralisation has been discovered which include some very high-grade PGM assays.
Christian Schaffalitzky continued: ʺThe timing of this agreement could not be better for Eurasia. We believe our planned platinum production, expected to commence in 2015, is well placed to benefit from the rapidly changing landscape in the PGM business. This can only benefit new low cost mines such as Eurasia's."
Sole Responsibility
No regulatory authority accepts responsibility for the adequacy or accuracy of this release.
Eurasia is solely and entirely responsible for the contents of this news release. No other parties, including any parties that have an interest in UAP, are in any way responsible for the contents hereof.
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Contacts:
For more information please contact:
Eurasia Mining:
Christian Schaffalitzky / Michael de Villiers
Tel: +44 (0) 207 932 0418
Katy Mitchell, WH Ireland Limited
Tel: +44 (0) 161 832 2174
