Eurasia Mining Plc
("Eurasia" or the "Company")
West Kytlim - Platinum Mining Preparatory Work Update
Eurasia Mining plc, the Russia focused PGM exploration and development company is pleased to report progress with regard to the Company's West Kytlim Project ('West Kytlim' or 'the Project').
Highlights:
· Contract awarded for the initial phase of detailed mine engineering work in preparation for mine development at West Kytlim;
· Plans now advanced for 2015 exploration programme, including plans for resource drilling to supplement mine ore scheduling, to commence when the production licence is issued;
· Negotiations advanced with international consultancies for award of contracts to prepare a Competent Person's Report reviewing the operational and financial model.
Christian Schaffalitzky, CEO of Eurasia Mining comments: "We believe this is an important new phase for Eurasia as we continue to shift our focus from platinum exploration to platinum production.
We have undertaken much internal work with regard to project feasibility and implementation, and we are now looking forward to seeing our mining plans substantiated independently by industry experts external to our own team. This is an important step which will assist with project-level financing and maximising returns from project development.
We anticipate that Rosnedra (The Russian Federal Agency for Subsoil Use) will submit the Company's Mining Licence for Prime Ministerial approval in the near term. Whilst that approval process is ongoing, we believe the preparatory work we are undertaking will enable the Company to mobilise into the production phase expeditiously, upon licence confirmation.
Eurasia continues to make progress across all its business operations and we look forward to further updating the market accordingly as soon as possible."
Preparatory Work Summary
Mine Engineering Study:
Contracts have now been signed with a Yekaterinburg based consultancy for an economic and technical evaluation of the West Kytlim Project with a specific focus on equipment selection and development methodology.
This reporting phase is expected to take approximately one month to complete, at which point contracts will be awarded for more detailed reporting and a development plan based on the optimal systems outlined in phase one. Further announcements will be made in due course as to the conclusions of this study.
Resource Upgrade Exploration Work:
Separately, detailed planning has been completed at our regional Yekaterinburg office for a 2015 West Kytlim exploration work programme, including drilling. This work is focused predominantly in areas of known resources which are to be upgraded to reserves and the concomitant confidence levels required for ore scheduling. This advance scheduling is key to optimised performance when the Company's West Kytlim mine becomes operational.
Competent Person's Report:
Eurasia are also finalising the assessment of tenders from international consultancies, some of which are UK based, to prepare a Competent Person's Report for the West Kytlim Project.
This independent evaluation has been requested by various Eurasia stakeholders and will be the most comprehensive English language reporting yet carried out on the West Kytlim licence. A completed feasibility study approved by the Russian authorities is already in place.
It is intended that this report will assess the operational features of the West Kytlim project and provide a financial assessment of the project, given the available mine development alternatives. The report will be prepared from and will then supplement the Company's own internally-gathered data and key findings.
Further background to the West Kytlim project and its production potential
The West Kytlim project in the Central Ural Mountains is an alluvial platinum project holding 2,283kg raw platinum* as Russian standard C1+C2 Reserves,** as approved by the Ministry of Natural Resources in April 2014 (see announcement dated 22 April 2014). Additional P category resources have also been outlined within the contours of the applied for Production Licence. The average grade of platinum in C1+C2 Reserves areas is 288 mg/m3.***
Alluvial platinum at West Kytlim occurs as nuggets in sand and gravel river deposits and can be liberated by straightforward hydro-mechanical processes. The operation is scalable and modular such that careful planning is required to ascertain the most economic solution. The project development is also iterative in that waste stripping and ore processing must be carefully scheduled to ensure all machinery deployed remains at near full capacity and that work at discrete sites is sequenced correctly.
Assuming the reports outlined above support the Company's assessment of the project, development at West Kytlim is expected to begin with an initial diesel powered operation at sites where shallow placers with little overburden are amenable to diesel powered earth moving equipment and plant. The Company also intends that a subsequent dragline operation would be phased in once the diesel operation is fully operational. Further dragline sites could later be phased in for concurrent operations at the project. Electrically powered draglines, which greatly reduce operating costs, would require renovation of a power line to the site and installation of a local substation. It is also intended that, after installation of electric power, the diesel operation and its associated plant would in part be modified to switch to the cheaper electric alternative. Cash flow from the diesel operation could then be used to fund further capital expansion from year 2 of platinum production. Under the Company's earlier estimates the operation would operate for a minimum of 10 years and produce up to 5 tonnes of raw platinum.
* Data included under Russian standards for Reserve and Resource classification must be approved by Rosnedra. C category Reserves broadly correlate to Proved or Probable Reserves, while P category Resources correlate to Inferred Resources under the JORC code.
** Milligrams per cubic metre, (abbreviated to mg/m3), is a unit measure of ore grade in platinum and gold placer deposits.
***Raw Platinum, as described by Rosnedra, is iso-ferroplatinum, and in Uralian ores typically grades 72-79% chemically pure platinum. The exact content of chemically pure platinum will be established in further laboratory work.
Consent for release
Christian Schaffalitzky, FIMMM, PGeo, MIEI, CEng, is a director of the Company. He has reviewed the update and consents to the inclusion of the exploration information in the form and context in which it appears here. He is a Competent Person for the purposes of the reporting of these results.
Enquiries:
Eurasia Mining Plc
Christian Schaffalitzky/Michael de Villiers
+44 (0)207 932 0418
WH Ireland Limited
Katy Mitchell/Liam Gribben
+44 (0)161 832 2174
Beaufort Securities
Elliot Hance
+44 (0)207 382 8300
Loeb Aron
John Beresford-Peirse
+44 (0)207 628 1128
