Binding Agreement Signed with Rosgeo

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS DEFINED IN EU REGULATION NO. 596/2014 AND IS IN ACCORDANCE WITH THE COMPANY'S OBLIGATIONS UNDER ARTICLE 7 OF THAT REGULATION.

26 March 2021

Eurasia Mining Plc

Binding Agreement Signed with Rosgeo

Eurasia Mining Plc ("Eurasia" or the "Company"), the palladium, platinum, rhodium, iridium and gold producing company, is pleased to announce that it has signed a legally binding agreement ("Rosgeo Agreement") to create a new joint venture (the "JV") with Russian state-owned company Rosgeo ("Rosgeo"). Joining forces with Rosgeo in Russia with regard to the JV expands Eurasia's world-class portfolio of mining assets on the Kola Peninsula ("Kola").

Impact of the Rosgeo Agreement on the Company

The Rosgeo Agreement allows Eurasia to gain a 75% equity stake in each of the nine new mining assets (the "Additional Assets"). The remaining 25% equity stakes will continue to be held by Rosgeo.

Eurasia has paid an initial consideration of c.US$0.5 million of cash (the "Initial Consideration") for its share in the JV. In addition, incremental consideration would become payable under an earn-out structure (the "Earnout") in the event that Eurasia decides to proceed to develop the Additional Assets. The total of the Initial Consideration and the Earnout (if applicable) is capped at 75% of the value set under the relevant Russian law if the Additional Assets had initially been auctioned by the Russian state instead of being acquired by Rosgeo.

The decision on whether to proceed and thereby incur all or part of the Earnout is wholly at the discretion of Eurasia. The Earnout (if Eurasia decides to proceed) will be spread over the period of the development of the Additional Assets. Eurasia has 24 months in which to decide whether to select some or all of the assets to develop. If Eurasia determines not to proceed with any assets, no consideration would be due beyond the Initial Consideration.

The Additional Assets have a total of 104.6 Moz Platinum equivalent resources as at 31.12.2020 (source: Russian Feasibility Study ("FS"), TsNIGRI, Russian State Cadastre of Mines) according to the Russian standards and are comprised of:

·   Four palladium, platinum, copper, nickel and cobalt open pit deposits, upon which Russian FS completed and reserves (according to the Russian standards) approved by the Russian State Committee of Reserves (GKZ).

Each of the four open pit deposits, which are located directly adjacent to Monchetundra, have already been studied by Eurasia with block modelling and open pits' optimisations performed by the Company. According to the due diligence done by Eurasia, the ores are suitable for toll treatment over distances of 5 to 8km with beneficiation and mineral processing at the proposed plant site between the Company's open pit deposits at Loipishnune and West Nittis.

·    A further five mostly open pit palladium, platinum, copper, nickel and cobalt assets are included in the JV, where Eurasia has carried out due diligence including c.20km of exploration drilling and some 12 thousand samples taken by Eurasia.

Eurasia will be the operator of the JV and, if it chooses to do so, will develop the Additional Assets by implementing an EPCF (Engineering, Procurement, Commissioning and Financing) structure similar to that signed with Sinosteel for the Monchetundra open pit mines.

In total Eurasia has already invested some US$8.3 million across the Additional Assets.

The cash balance of the Company is currently around US$6 million with zero debt.

The Company's existing mining operations in West Kytlim and Monchetundra will not be affected by the JV, except that the ores from the Additional Assets could be toll treated at the extension of the Monchetundra processing plant to be constructed on "turn key" basis in accordance with the signed EPC and Financing contract signed by Eurasia's subsidiary with Sinosteel. See the Company's announcement of 4 December 2019 for further information of the Company's EPC and Financing contract with Sinosteel.

Strategic rationale

The Rosgeo Agreement brings a number of benefits for the Company, including:

·      adding highly-attractive electric battery metals to Eurasia's metal basket (copper, nickel and cobalt on top of palladium and platinum all contained in the Additional Assets);

·      partnership with 100% state owned company focused on ESG with Environmental Management System in full compliance with ISO 14001:2015 as well as Health and Safety System in full compliance with BS OHSAS 18001:2007;

·    reinforcing Eurasia's best-in-class focus on ESG and exposure to long-term green trends globally, including via the application of the expanded metal basket to green technologies, in particular hydrogen energy and electric batteries; and

·      enhancing Eurasia's balanced portfolio of assets which combines de-risked in-production and near-term production with long-term expansion.

Other key terms of the Rosgeo Agreement

The Rosgeo Agreement provides that Eurasia acquires 75% equity stakes in each of the Additional Assets and Rosgeo will retain 25% equity stakes in the Additional Assets (being those companies holding relevant licenses for palladium, platinum, copper, nickel and cobalt projects outlined above). Eurasia also has a call option to acquire 25% from Rosgeo after completion of the reserves audit under the JORC Code. Any engagement with Rosgeo as a contractor in relation to the Additional Assets will be on an arm's length basis.

Christian Schaffalitzky, Executive Chairman of Eurasia commented: "The Directors are delighted to sign this agreement with Rosgeo, which by expanding Eurasia's open pit assets both in palladium, platinum and in battery metals by a total of 104.6 Moz Platinum equivalent resources, unlocks a number of additional opportunities for the Company and its shareholders. By enhancing Eurasia's focus on 'green energy metals' it provides a unique opportunity to increase exposure to the important ESG and clean energy segments, whilst also positively balancing the asset portfolio. Furthermore, we look forward to working with Rosgeo, a global company with renowned proficient technical capabilities and the best partner we could have in Russia, as we are making progress on the strategic options available to the Company."

James Nieuwenhuys, CEO and Managing Director of Eurasia commented: "We are excited to significantly expand our portfolio by adding open pit deposits adjacent to our Monchetundra and creating a unique open pit mining PGM and battery metals district on the Kola Peninsula, where we are already established with open pit Monchetundra mine with 64% of palladium in the basket and with AISC in the first quartile of the global cost curve. With my mining EPC experience as COO of Polyus in Russia, as well as at management positions with SNC-Lavalin, Bateman and XCEL Engineering and Management and our team of experienced professionals we are going to roll out the EPCF structure we put in place for Monchetundra to the Additional Assets significantly strengthening our position in the open pit PGM and battery metals district of Kola, where similarly to the Urals open pit PGM district, we have first mover advantage in these times, when the traditional PGM districts are starting to struggle with various challenges posed by the underground mines like energy issues, environmental issues and floods to name a few".

Christian Schaffalitzky, FIMMM, PGeo, 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.

A copy of this announcement is also available on Eurasia's website at:

https://www.eurasiamining.co.uk/investors/news-announcements.

For further information, please contact:

About Eurasia Mining Plc

Eurasia Mining plc is a palladium, platinum, rhodium, iridium and gold producing company, operating the established West Kytlim Mine in the Urals, and also the operator of the Monchetundra Project comprising two predominantly palladium open pit deposits located 3km away from Severonickel, one of Norilsk Nickel's largest base metals and PGM processing facilities, near the town of Monchegorsk on the Kola Peninsula.

About Rosgeo

Rosgeo is a Russian multidisciplinary geological holding company which provides a full range of geological exploration services from regional surveys to stratigraphic drilling and subsoil monitoring. The holding company has unique expertise, including in such areas as marine geology and offshore operations. The holding company's enterprises have discovered more than 1,000 fields and deposits, including large hydrocarbon and mineral deposits. 100% of Rosgeo's shares are held by the Russian government. Rosgeo operates on a global scale and has contracts or joint ventures with a number of international companies including ones from UK (BP plc, British Gas, Buried Hill), US (Amerada Hess, Chevron, ConocoPhillips, Exxon Mobil, ION, Schlumberger), Russia (Polyus, Polymetal, Rosatom/Uranium One).