Eurasia Mining (LSE:EUA) released an update regarding its West Kytlim mine on Monday morning. The company reports preparation work is expected to commence imminently ahead of first production around April when running water becomes available due to the seasonal thaw.
Last year Techstroy, the contractor employed at the mine, achieved total production of 165kg of raw platinum, exceeding its original 100kg target.
For 2019 mining activities at West Kyltim, Eurasia’s subsidiary Kosvinsky Kamen (KK) has agreed a contract with Uralmetmash, a new special purpose company formed by the directors of Techstroy. It’s been agreed that KK will receive a 35% share of platinum revenues.
Executive Chairman Christian Schaffalitzky said: "We are pleased to be working again with the team that proved so effective during 2018. They were a very efficient operator last year, with a zero accident record, and financially motivated to develop the asset in a sensible manner. Furthermore, we are looking at ways to improve metal recoveries, based on the measured efficiency of the existing process flowsheet. We look forward to updating shareholders on progress and also our longer term development strategy for the West Kytlim reserves and resources before the season commences."
West Kytlim is located in the Ural Mountains of Russia and is the second largest alluvial PGM reserve in the world. The mine, fully permitted for production until 2040, produced around 5,300 ounces of raw platinum during 2018 and contains more than 350,000 ounces of resource potential. In addition, it produces significant palladium, platinum, iridium, rhodium and gold.
Mining at West Kytlim is seasonal as the alluvial process relies heavily on running water. Uralmetmash will begin preparations for mining now, including the stripping of overburden and stockpiling of ore in preparation for washing, which can only commence once the seasonal thaw commences around the beginning of April.
Work will continue where it left off in November 2018, at the Kluchiki area. Mining moved from the Malaya Sosnovka Area to the Kluchiki Area in August 2018, and it has been previously estimated that Kluchiki contains raw platinum reserves of around 319kg. This was based on a feasibility study in 2014 but further infill drilling was undertaken at Kluchiki in 2017 and 2018.
Following the submission of the updated results, KK is awaiting formal approval of a refreshed reserve assessment for the area. once approval of the additional reserves has been received a second washplant can be commissioned.
Finally, Eurasia also highlights that KK has successfully renegotiated a slight reduction in the discount to the London Metal Exchange (LME) platinum price it receives from the Urals precious metal refinery. KK will now receive 98% of the LME quoted price instead of last year’s rate of 97%.
Author: Stuart Langelaan
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