Eurasia Mining (LSE:EUA) sat at 0.48p on Monday morning after revealing a significant step forward in its efforts to turn its flagship West Kytlim mining licence into the largest alluvial platinum operation in the world. The firm has applied to a 24.5km2 licence area called Tipil that sits adjacent to West Kytlim in the Urals region of Russia.
If the permit is approved, it will take West Kytlim’s total exploration area to 95km2 inclusive of the 71km2 flanks area that was approved for exploration in December. In turn, these exploration areas sit adjacent to and surround West Kytlim’s current 21km2 mining permit, bringing the total area licenced and under application to 116km2.
Tipil contains around 17km of river course and sedimentary units that have been proven to host platinum group metal (PGM) deposits at West Kytlim. Eurasia’s geologists have analysed geological data and historical mining information to compile a report justifying an application for the area as a new exploration licence tenement. The company’s directors are confident of finding further PGM mineralisation on site.
Chairman Christian Schaffalitzky said: ‘In line with our strategy to expand the production volumes at West Kytlim, even as the 2019 mining season is ongoing, we are again utilising one of our Company's other core competencies, i.e. our in-house expert knowledge of geology and the Russian licensing system, to further increase our presence in the West Kytlim area and aim to grow the mine to be the largest alluvial operation globally this year. We are now established as a dominant player in the PGM space in the region and look to developing an operation providing a low cost PGM solution that is sustainable over potentially several decades.'
Monday’s development comes after Eurasia revealed critical regulatory progress at West Kytlim earlier this month. In the update, Eurasia said the Russian Mining Authority had 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 its update earlier this month. 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.
Last year, output from West Kytlim exceeded expectations with platinum production of 165kg. During a podcast interview in April, Schaffalitzky told MiningMaven the firm 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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