Shares in Eurasia Mining (LSE:EUA) inched up 2.6pc to 0.5p on Monday morning after the firm revealed critical regulatory progress at its flagship West Kytlim alluvial platinum project in the Urals region of Russia.
The £12.3m palladium, platinum, iridium, rhodium and gold producer said the Russian Mining Authority has approved work equivalent to a Definitive Feasibility Study at the project's Kluchiki area. A revised reserve calculation prepared under the DFS is also scheduled for approval by the Russian government in accordance with Russian Mining standards. The reserves at Kluchiki, where drilling is ongoing, were recalculated following infill drilling last year. This expanded ore bodies across the location and upgraded calculated reserves from C2 to C1 category ore.
Mining at West Kytlim moved on to the Kluchiki area after forest clearance was completed in February. The broader West Kytlim project is currently the second largest alluvial platinum mine globally, based on 2018 production figures. Eurasia expects it to become the world's largest PGM alluvial mine in 2019. The operation was brought to industrial-scale production in 2018, with a total of 165kg raw platinum produced from May to November 2018 for revenue of £2.57m.
To help progress West Kytlim, Eurasia also announced a new asset-wide strategy for reserves approvals in Monday’s update. Russian category C2 reserves across all areas of the West Kytlim licence are expected to be upgraded to C1 in a single, fully-funded c.2,600m shallow drilling programme. The work is expected to complete this in parallel with mining, with 140m of drilling already undertaken in West Kytlim’s Bolshaya Sosnovka area. Eurasia’s chairman Christian Schaffalitzky said the work has been designed to save time and cut costs by reducing the reporting required for approvals at individual sites.
‘It also creates the potential to open the project up to much greater production volumes and, by potentially lifting the majority of ore to higher reserve categories, could increase the market value of the asset,’ he added. ‘We look forward to updating on the program as it progresses throughout this year.’
Monday’s update comes just a week after Eurasia announced that full-scale washing and production had begun at West Kytlim. Processing at the asset is seasonal because the alluvial process relies heavily on running water. Ahead of the seasonal thaw, mining and preparations have been ongoing since January. A stockpile of around 30,000m3 of ore has been built up and will be maintained at the wash plant to provide a buffer of material to ensure continuous production.
Last year, output from the West Kytlim mine exceeded expectations with platinum production of 165kg. During a podcast interview in April, Schaffalitzky told MiningMaven the company is targeting similar production levels in 2019.
Elsewhere, the company has been developing its more substantial Monchetundra asset towards production since it was issued a mining permit in November last year. An engineering, procurement, construction and financing agreement is in place with Chinese group Sinosteel for the development of the mine, which is estimated to hold 2MMoz of palladium & platinum equivalent.
Author: Daniel Flynn
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