Eurasia Mining plc (AIM: EUA)
("Eurasia" or the "Company")
West Kytlim Platinum Production 2016 - Update
Eurasia Mining plc, the Russia focused PGM exploration and development company, is pleased to announce an update with regard to positive developments at the West Kytlim project.
In the latter half of 2015 Eurasia secured all necessary approvals and received a production licence for Platinum production at the West Kytlim project.
Eurasia is delighted to confirm that production preparatory work has continued in recent months and the Company remains on progress for first Platinum production in 2016.
Notwithstanding the pressures evident in the mineral exploration and development sector, we consider that the West Kytlim project is a low capital cost and high margin Platinum production opportunity. The production is of alluvial platinum, gathered from river sands, washed and sent as a bagged black sand to a local refinery for Platinum smelting. As such we believe we will be able to generate revenues upon commencement of production, an event which will dramatically transform Eurasia Mining operationally and financially.
The key operational developments recently accomplished are highlighted below:
- The contractor for the power line construction (OOO StroiCentre) has started engineering and ecological studies to back up the planned route surveyed last month. This work comprises flora and fauna studies as well as geotechnical drilling.
- The surveying teams have completed all field work necessary for incorporation into an application for the Mining Allotment covering the initial production site at Malaya Sosnovka. Survey of the next area scheduled for mining, at Kluchiki, is underway. Mining allotment coverage within the Mining Licence area will be progressively expanded as additional production sites are sequentially added.
-The Technical Design Report for the full project is underway, while the report for the initial diesel operation at Malaya Sosnovka is about to be completed. This later report is a detailed mine engineering study for a hydraulic mining operation developing Reserve blocks at the Malaya Sosnovka area, and will in due course be incorporated to the complete development plan.
Christian Schaffalitzky Managing Director of Eurasia Mining said: "We are absolutely delighted with operational progress achieved to date at West Kytlim. Shareholders should expect a series of further updates in the coming weeks and months as we put into action the plan to bring the Company into production. That production should deliver first revenues and operating margins for Eurasia after many years of build up and preparations.
Despite the continuing subdued markets for the mineral exploration and development sector the team at Eurasia Mining are driving our business forward. We believe that by entering the eagerly anticipated recovery phase for the mineral sector as a Platinum producer, we will be in a great position to create real value for shareholders and grow our business accordingly.
We continue to work across our business, driving forward a number of existing and new initiatives, complementary to our work at West Kytlim, and look forward to updating the market as matters crystalise.
In the meantime the Board of Eurasia Mining would like to wish shareholders and investors generally a Happy New Year!"
Further background to the West Kytlim project and its production potential
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.
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 using a previously constructed route. 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 approximately 5 tonnes of raw platinum with further potential if the exploration for additional reserves is successful.
The Mining Licence of 21.5 square kilometres is for alluvial platinum and is valid until 15 October 2040. The licence is granted to Eurasia's subsidiary company on the basis of first discovery and includes the rights for extraction of platinum and gold.
Enquiries:
Eurasia Mining Plc
Christian Schaffalitzky/Michael de Villiers
+44 (0)207 932 0418
WH Ireland Limited
Katy Mitchell/Nick Prowting
+44 (0)161 832 2174
Beaufort Securities
Elliot Hance
+44 (0)207 382 8300
Loeb Aron
John Beresford-Peirse
+44 (0)207 628 1128
