Eurasia Mining

  • Eurasia lodges application to expand major West Kytlim platinum project in Russia (EUA)

    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

    The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.

    Catalyst Information Services Ltd, the owner of MiningMaven.com, owns a position in the stock(s) and/or financial instrument(s) mentioned in the piece.

    Catalyst Information Services Ltd, the owner of MiningMaven.com, has been paid for the production of this piece by the company or companies mentioned above.

    MiningMaven.com and Catalyst Information Services Ltd are not responsible for its content or accuracy and do not share the views of the author.  News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance.

  • Eurasia Mining – accelerating growth into 2020 (EUA)

    The past two years have been particularly busy for Russia-focused precious metals business Eurasia Mining (LSE:EUA). As well as delivering record platinum production and posting a maiden gross annual profit, the company has taken major steps towards bringing its significant Monchetundra palladium project 'into a different league of Platinum Group Metal (PGM) producers'.

    Despite this, the firm has struggled to gather much market momentum since January, with shares currently sitting at just under 0.50p each. This price is towards the lower end of its 52-week range and values the company at £12m. Here we look at what could reinvigorate this stock over the coming months.

    Platinum production growth at West Kytlim

    Eurasia’s most important asset is West Kytlim, a producing palladium, platinum, iridium, rhodium and gold mine based in Russia’s Ural Mountains.

    West Kytlim is a significant source of cash flow for Eurasia, helping the business to post a maiden gross profit from operations of £292,000 last year and freeing it up to pursue the development of its other assets. 2018 not only saw the mine enter industrial-scale output for the first time, but also saw it outperform Eurasia’s forecasted production volumes and grades considerably. Indeed, the mine produced a total of 165kg of raw platinum throughout its active months – an average of 1.146kg a day - compared to an expected 100kg of raw platinum. This output translated into production revenues of £2.57m against a total of £180,000 in 2017.

    Development strategy at West Kytlim

    As well as maintaining production, the last year has also seen Eurasia work to develop West Kytlim into the largest soft rock PGM mine globally. It is currently the second largest behind the Kondyor mine operated by Russian Platinum, which is thought to be winding down after producing an impressive 275kg of raw platinum last year.

    Eurasia's expansion efforts have taken several forms. In December last year, the company revealed that it had been granted an additional 71.1km2exploration licence at the project.  The ground is thought to have the potential to bolster West Kytlim’s resource base and life of mine considerably. Following this, in June, Eurasia announced that it had applied for another licence called Tipil in the West Kytlim area. Tipil contains around 17km of river course and sedimentary units that have been proven to host platinum group metal deposits. With Tipil covering 24.5km2, West Kytlim’s total project area will grow to 117km2when Eurasia is granted the Tipil licence formally.

    Eurasia has had its Definitive Feasibility Study approved for West Kytlim’s Kluchiki area – a revised reserves statement for this area has also been lodged with authorities and is due for approval imminently. Furthermore, the Company aims to upgrade the entire mine's existing reserves into the Russian C1 category through a single ‘aggressive’ drilling programme.  This work is fully funded and is on track to be completed by the end of this year. A total of 2,600m of drilling is planned at the reserves occurring as separate areas within the broader West Kytlim deposit. The aggressive reserves upgrade program is part of a ‘phased mine development strategy’ to ensure sufficient mineable material for multiple washplants operating on site from 2020.  The business has also made several process improvements to West Kytlim’s washplant aimed at increasing overall recovery of precious metals, and improving efficiencies.

    Most recently, in September, Eurasia announced that it has acquired its own enrichment plant and some mining equipment from the operating free cash flow at West Kytlim. The firm will now produce from the asset on an owner-operator basis, meaning it is entitled to 100pc of revenues, up from 30-35pc. As a result, Schaffalitzky expects to see an ‘obvious concurrent increase’ in the project’s profit margin moving forward.

    Huge resource upside at Monchetundra 

    Another key focus for Eurasia this year has been the advancement of its second key asset – the Monchetundra project – towards production. Monchetundra is based on the Kola Peninsula in northwest Russia and contains combined reserves and resources of 1.9Moz (or 59t) palladium equivalent alongside significant quantities of nickel and copper. The asset is slated to enter full production in 2021, lasting until 2038.

    According to an Optiva Securities valuation last October, Monchetundra offers a base case NPV(12) of $188m as it stands. The broker expects production revenues to ramp up from $28m in 2021 to $55m in 2022, and $75m annually from 2023 using a $1,000/oz palladium price assumption. However, it is worth noting that these estimates looked particularly conservative in light of current palladium prices, which are sitting way above $1,000/oz at more than $1,600/oz, indicating the potential for even more significant future revenues. The metal is expected to be driven higher by a supply deficit in the face of increasing demand from vehicle manufacturers battling to meet tighter emission standards

    Eurasia also believes that Monchetundra offers a considerable amount of resources upside, estimating that it contains an in-situ reserve and resource value of approximately $2.1bn across two open-pittable locations.

    Bringing Monchetundra towards production

    Eurasia has made exciting progress over recent years at Monchetundra. Firstly, it was able to secure an engineering, procurement, and construction (EPC) contract for the project with Chinese company Sinosteel. This includes a financing package that will cover the majority of the project's $176m total capex requirement in the form of a $149.6m 10-year loan. Meanwhile, a $50m sub-contract has been assigned to Eurasia's 80pc subsidiary, and Monchetundra owner, TGK, for engineering and pit development works ahead of mining. Critically, the Sinosteel deal means that Eurasia can finance its obligations at Monchetundra without equity dilution.

    Having secured its deal with Sinosteel, Eurasia took another significant step forward at Monchetundra in November last year when it received a mining permit for the site. This was fully approved and authorised by Rosnedra- the Russian federal agency responsible for mining.

    In a project update released in August, Eurasia revealed that it has been completing several workstreams at the project since receiving the permit. Indeed, the business said it is currently completing production preparation activities and has secured a route to improving its metallurgical process and profitability. Critically, Eurasia also noted that it had completed a detailed project design report for Monchetundra alongside its long-standing working partner Central Kola Expedition. This comprises details such as open-pit design, a comprehensive land works of the asset's two open-pit sites, and proposals for mining locations. 

    Schaffalitzky tells us that completing much of this work is a necessary prerequisite to beginning the EPC contract and meeting the requirements of Russia's mining authority. He adds that the company plans to ramp up activity at the asset over the next six to 12 months, supported by West Kytlim mine revenue and the proceeds of a £500,000 placing carried out in April

    'This year, we are doing site preparation activities like land surveys to initiate the EPC. We are also fulfilling reporting requirements as required by Rosnedra. Central Kola Expedition are putting a detailed project design report together, for submission to authorities. Passing all of these milestones will really kick off the next phase of the project, moving us into a position where we can begin to build up the plant, begin mining, and then enter full production.'

    Expanding Monchetundra ‘severalfold’

    August’s update also saw Eurasia announce that it had finalised its application for the 'flanks area' surrounding Monchetundra . Under Russian law, companies that have been granted a mining licence hold the right to apply for further ground adjacent to an identified deposit and within 5km of an approved reserve.

    In the case of Monchetundra, Eurasia believes that this area could increase project resources 'severalfold', at a very minimum covering extensions of identified ore bodies where mining can eventually continue. What's more, the business said several deposits are adjacent to Monchetundra's deposits. It is currently reviewing these in detail. Schaffalitzky elaborates: 

    'There is a 5km boundary around the entire mining licence where we can apply for further ground. At Monchtundra there are two distinct deposits, and the 5km perimeter extends from both of these deposits, so what we are doing now is applying for an exploration licence directly adjacent to our current mining licence. We expect the deposit to be expanded by a certain amount because it is obvious that there is an on-strike continuation of mineralisation at both deposits into this unlicensed ground. We were previously limited in our exploration works by the boundaries of our assigned exploration license -this application could be a very effective way of extending Monchetundra's lifespan severalfold. Notable occurrences are in an area known as the Nittis-Kamuzhya-Travyanaya massif,- we intend to update on this as and when the application is submitted to authorities.

    Seeking out deals

    In its latest development Eurasia has added to its management team’s M&A experience by hiring Alexei Churakov as a strategic advisor to its board. Churakov is a former Goldman Sachs and Morgan Stanley senior investment banker specialised in the mining sector and has facilitated many cross-border M&A transactions from Moscow, London, and New York.

    Churakov has already assisted Eurasia in structuring its EPC contract with Sinosteel, and supported the creation and progress of its phased production increase strategy at West Kytlim.

    More recently, he has helped to arrange detailed due diligence and multi-day visits to both Monchetundra and West Kytlim for James Nieuwenhuys, chief executive and director of Lesego Platinum. Lesego is a South African PGM company developing a c 50MMoz project in the eastern limb of the Bushveld Complex.

    During these visits, Lesogo has studied and evaluated infrastructure availability and logistics access, drill core samples, results of laboratory test works along with other information and raw data at both of Eurasia’ assets. These efforts will inform Lesogo’s consideration of a partial acquisition of Eurasia's subsidiaries and joint venture opportunities at both sites, among other options.

    Poised for growth

    With West Kytlim already generating significant revenues and expansion efforts in place, Eurasia is already a much more advanced and de-risked prospect than many of its junior market peers. Alongside this, the company has previously stated its belief that taking Monchetundra into operation will take it 'into a different league of PGM producers'

    August’s update showed that the company is well on its way to achieving this goal, with plenty of milestones waiting to be crossed over the coming months. Complementing this progress is a palladium market that is enjoying a healthy supply/demand dynamic at the hands of anticipated electric vehicle demand and a greater focus on reducing emissions. As a low-cost producer in this market, Eurasia could be well set to enjoy a considerable rise from its currently depressed 0.50p share price over the coming months and years.

    Author: Daniel Flynn

    The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.

    Catalyst Information Services Ltd, the owner of MiningMaven.com, owns a position in the stock(s) and/or financial instrument(s) mentioned in the piece.

    Catalyst Information Services Ltd, the owner of MiningMaven.com, has been paid for the production of this piece by the company or companies mentioned above.

    MiningMaven.com and Catalyst Information Services Ltd are not responsible for its content or accuracy and do not share the views of the author. News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance.

  • Eurasia Mining geared up to move Monchetundra PGM project forward (EUA)

    Article updated 11th Dec 2018:

    Following the release of further details on its approved Monchetundra Mine permit on Wednesday 5th December, Eurasia Mining (LSE:EUA) announced on Tuesday that it has now received the official license certificate for the permit. The project is a platinum group metals (PGM) and base metals mine located near the town of Monchegorsk on the Kola Peninsula in northwest Russia. 

    Granting of the mining permit was announced by Eurasia on 20th November and is based on a previously issued discovery certificate. Eurasia is fully authorized to construct a mine at Monchetundra which contains approximately 1.9m ounces of palladium-led reserves including platinum, gold, nickel, and copper resource. The company estimates the site has a gross in-situ value of $2.1bn based on current spot prices.

    Eurasia later advised on Friday 7th December that it had been given notice of the payment terms for the license by Rosnedra, the Russian Federal agency responsible for mining. The total one-time payment for the license will be RUR 20,843,788 (£244,265) with 20% (RUR 4,168,758 or £48,853) to be paid within 30 days of registration of the licence at the state register of subsoil licences. The remaining 80% of the fee is payable within 5 years of the date of the licence's registration.

    With the official permit document now transferred to Eurasia and registered with the state registry of subsoil mining licences in Moscow, it is the company's intention to pay the initial 20% from available funds.  The remaining balance is expected to be met as part of the capital development of the project.

    Monchetundra Mine permit

    The Kola Peninsula, borders Finland and Norway in the far Northwest of Russia and forms the eastern margin of the archean Baltic Shield. This ancient terrane is punctuated by numerous ultramafic igneous bodies of Paleoproterozoic age, some of which are layered intrusions analogous to the Bushveld Complex in South Africa.

    Eurasia's interests lie at the contact of three such intrusions including the Nittis-Kumuzhya-Travyanaya (NKT) Massif that was extensively drilled for base metal mineralisation and mined for sulphidic copper nickel mineralisation from 1937-1971.

    Eurasia began work at the Monchetundra Project in 2006 developing the site from a green fields exploration project. This was initially as part of a joint venture with Anglo American Platinum whose interest Eurasia bought in 2014. A Feasibility study, combining open pit targets West Nittis and Lopishnune, was completed during 2015 and 2016, and the mining license was lodged in December 2017.

    Eurasia already has an Engineering Procurement Construction & Financing (EPCF) contract in place with the Chinese state-owned major infrastructure project group Sinosteel for a total value of US$176m. Sinosteel will be responsible for the debt finance of 85% of the total, i.e. US$149.6m. The loan is for a period of 10-years with early repayment permitted at an indicative interest floating rate at 6 month LIBOR plus 3.5%. A US$50m sub-contract for engineering and pit development works is specified within the contract and is assigned to Eurasia's 80% subsidiary Terskaya Gornaya Kompany (TGK), or a sub-contractor of its choosing. 

    Eurasia is engaged in discussions with potential sub-contractors with regard to contracting part of the mining operation, as well as acting as the company’s representative during the mine construction phase. The aim is to emulate the contract mining arrangement utilised at the company's operating PGM and gold mine at West Kytlim by contracting the mining operation, for a percentage of gross revenue, to a reputable international specialist company with experience in Russia, with Eurasia retaining control and ownership of the project.

    The palladium spot price recently hit all-time highs at $1253 in a rare move seeing the metal surpass the price of gold. With a 3:1 palladium/platinum ratio in favour of palladium at Monchetundra, mining economics have naturally improved as a result.

    Timeline of Development

    Christian Schaffalitzky, Managing Director and Executive Chairman for Eurasia, commented: "This is the start of a new chapter for the Company and its ambitions.  Our commercial arrangements regarding the Monchetundra Project development can now be realised at this large low cost PGM and base metals project.

    The issue of this mining permit represents a sea change for the company, as this is a major project which the company intends to develop alongside our West Kytlim PGM and gold mine, which achieved steady state industrial scale production during 2018.

    It is also significant that very few mine permits are issued for PGM projects, reflecting the lack of investment in this sector, something that we the Directors feel makes this project particularly valuable. The vast majority of permits issued in Russia are for gold projects, and it is also quite rare in the current phase of the resources cycle to find an exploration company taking a project all the way from green fields exploration through mine permitting. Now we progress onto mine development and production, at Eurasia’s second mining license, based on its own discoveries, issued in less than three years.

    As regards funding requirements, our arrangements with Sinosteel mean the Company can move forward with the project's development without recourse to further dilution of its shareholder base.

    It is our intention to offer specific timelines and objectives for the projects development through 2019 in due course."

    Author: Stuart Langelaan

    The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.
    Catalyst Information Services Ltd, the owner of MiningMaven.com, owns a position in the stock(s) and/or financial instrument(s) mentioned in the piece.
    Catalyst Information Services Ltd, the owner of MiningMaven.com, has been paid for the production of this piece by the company or companies mentioned above.
    MiningMaven.com and Catalyst Information Services Ltd are not responsible for its content or accuracy and do not share the views of the author.  News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance

     

    Article originally published 5th Dec 2018 and updated 7th Dec 2018 to include permit cost and 11th Dec on receiving mine permit certificate.

  • Eurasia Mining reports upgraded washplant at West Kytlim Mine is now fully operational (EUA)

    Monday saw Eurasia Mining (LSE:EUA) reveal that full scale washing and production has commenced at its West Kytlim Mine in the Urals Mountains of Russia. Processing at West Kytlim is seasonal as 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 washplant to provide a buffer of material to ensure constant production. The firm adds that ‘ore has been and will be continuously sampled during excavation to confirm the grades’.

    The open-pit mine is the second largest alluvial PGM reserve in the world and contains palladium, platinum, iridium, rhodium and gold mineralisation. Mining at West Kytlim has moved on to the Kluchiki area where forest clearance was undertaken in February.  A number of improvements have been made at the plant to improve washing efficiency and metal recovery. Ore is now being fed through the trommel using a feeder system which is designed to ensure a more consistent flow of gravel through the plant. Additionally, a jig has also been added to the overflow of the sluice to attempt to capture more of the finer platinum bearing nuggets.

    Last year, output from the West Kytlim mine exceeded expectations with platinum production of 165kg, and during a podcast interview in April Eurasia’s chairman, Christian Schaffalitzky told MiningMaven the company is targeting similar production levels in 2019.

    Meanwhile, The company has been developing its larger Monchetundra asset towards production since it was issued a mining permit in November last year. An engineering, procurement, construction (EPC) and financing agreement is in place with Chinese group Sinosteel for the development of the mine, which is estimated to hold 2 million ounces of palladium & platinum equivalent.

    Christian Schaffalitzky, Chairman of Eurasia commented: 'We are confident of a strong second year at West Kytlim in 2019 with mining ongoing since the first quarter and with the full scale production and washing started in Q2. Our own team and that of our Contractor are building on their experience of last year with several modifications to the circuit aimed at further increasing efficiency and metal recovery. We will publish the improved grades and recovery numbers later this year, after these improvements are confirmed over longer term production period.'

    Author: Stuart Langelaan

    The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.

    Catalyst Information Services Ltd, the owner of MiningMaven.com, owns a position in the stock(s) and/or financial instrument(s) mentioned in the piece.

    Catalyst Information Services Ltd, the owner of MiningMaven.com, has been paid for the production of this piece by the company or companies mentioned above.

    MiningMaven.com and Catalyst Information Services Ltd are not responsible for its content or accuracy and do not share the views of the author.  News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance.

  • Eurasia Mining reveals revenues of £2.57m in maiden year of production from West Kytlim (EUA)

    On Wednesday, Eurasia Mining (LSe:EUA) released its annual report and accounts revealing revenues jumped to £2.57m in its first year of production from the West Kytlim mine. The majority of sales came from mined platinum with smaller credits of gold, palladium, rhodium, and iridium.

    The firm, which is now debt free, generated a gross profit of £293k during the period compared with a loss of £34k in 2017.

    The company’s primary focusses are the West Kytlim platinum and gold mine in the Ural Mountains and the 2 million ounces of palladium & platinum equivalent Monchetundra asset on the Kola Peninsula. Last year, output from the West Kytlim mine exceeded expectations with platinum production of 165kg. Last month Eurasia’s chairman, Christian Schaffalitzky told MiningMaven the company is targeting similar production levels in 2019.

    Mining at West Kytlim has moved on to the Kluchiki area where forest clearance was undertaken in February. Seasonal preparations, including the mobilisation of machinery, have been in progress ahead of gravel washing, which is due to commence in the middle of May 2019.

    Improvements have been made to improve washing efficiency and metal recovery including the addition of a jig to the overflow of the sluice to attempt to capture more of the finer platinum bearing nuggets. Eurasia has renewed its contract for mine development with the directors and operational staff at Techstroy, who underwent a name change to Uralmetmash.

    Meanwhile, The company has been developing its larger Monchetundra asset towards production since it was issued a mining permit in November last year. An engineering, procurement, construction (EPC) and financing agreement is in place with Chinese group Sinosteel for the development of the mine.

    In the chairman’s statement published with the accounts, Mr Schaffalitzky said:

    “At the time of writing production is ramping up for the year to full scale at West Kytlim and the Directors now regard Eurasia as an established mining Company.

    The Company's strategy, as outlined since 2015/16 was to develop the West Kytlim Mine to production, and to generate sufficient revenues to allow the Company to pursue development of its further interests, while minimising possible dilution of the shareholder base.

    The Company's plans for the project's development with Eurasia's working partners at Sinosteel (one of the largest corporations in China) and the Central Kola Expedition, the key contractor in the region for both Russian and international companies, can now be progressed. The project is a more considerable undertaking than West Kytlim and could be transformational for the Company.”

    Author: Stuart Langelaan

    The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.

    Catalyst Information Services Ltd, the owner of MiningMaven.com, owns a position in the stock(s) and/or financial instrument(s) mentioned in the piece.

    Catalyst Information Services Ltd, the owner of MiningMaven.com, has been paid for the production of this piece by the company or companies mentioned above.

    MiningMaven.com and Catalyst Information Services Ltd are not responsible for its content or accuracy and do not share the views of the author.  News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance.

  • Eurasia Mining reveals substantial development progress at Monchetundra (EUA)

    Eurasia Mining (LSE:EUA) was sitting at 0.45p in midday trading on Tuesday after providing an update on developments at its Monchetundra project in Russia over the first half of the year. The company is advancing the asset towards production after being issued a mining permit for its 2Moz palladium, platinum, and gold deposit in November last year.

    In Tuesday’s update, Eurasia said it is making progress on the production preparation activities stipulated by its engineering, procurement, and construction contract with Chinese firm Sinosteel. As previously outlined, this covers 85pc of a total contract value of $176m.

    Eurasia also said it has now submitted a flanks licence for submission to Rosnedra in September on areas surrounding the mine sites. As a minimum, the business expects this application to cover on-strike extensions of identified ore bodies where mining can continue. Furthermore, it believes that numerous deposits exist adjacent to Monchetundra that may contribute directly to the long-term development of a PGM-base metal operation. These prospects and potential applications are now being reviewed in detail, with further claims to be made going forward as appropriate.

    Elsewhere, Eurasia revealed that the detailed project design report for Monchetundra – including open pit design and a comprehensive land survey of the project’s two open-pit sites – is now ready. As part of this, provisional locations for surface facilities and related infrastructure have been determined and approved by government agencies. Likewise, Eurasia’s partner Central Kola Expedition has prepared a work programme for trial mining locations that can begin under Russian legislation on already-approved C2 category ore body.

    Finally, Eurasia said it had signed an agreement with Intec International Projects to look at process improvements to enhance Monchetundra’s profitability further.

    The company’s chairman Christian Schaffalitzky said: ‘Our team and our contractors at CKE continue to progress our plans for the development of this palladium dominated open pit mine. It is our intention to significantly increase activity on site over the next 6 to 12 months to accomplish activities stipulated by the EPC with Sinosteel as TGK's responsibilities to initiate the payments from Sinosteel to TGK. We look forward to launching this mine walking in the steps and learning from our experience from the successful mine launch at West Kytlim'.

    Author: Daniel Flynn

    The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.

    Catalyst Information Services Ltd, the owner of MiningMaven.com, owns a position in the stock(s) and/or financial instrument(s) mentioned in the piece.

    Catalyst Information Services Ltd, the owner of MiningMaven.com, has been paid for the production of this piece by the company or companies mentioned above.

    MiningMaven.com and Catalyst Information Services Ltd are not responsible for its content or accuracy and do not share the views of the author.  News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance

     

  • Eurasia Mining rises after revealing regulatory progress in Russia (EUA)

    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

    The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.

    Catalyst Information Services Ltd, the owner of MiningMaven.com, owns a position in the stock(s) and/or financial instrument(s) mentioned in the piece.

    Catalyst Information Services Ltd, the owner of MiningMaven.com, has been paid for the production of this piece by the company or companies mentioned above.

    MiningMaven.com and Catalyst Information Services Ltd are not responsible for its content or accuracy and do not share the views of the author.  News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance.

  • Eurasia Mining talks operational progress and strong PGM prices after signing major contracts at Monchetundra (EUA)

    Eurasia Mining (LSE:EUA) jumped 6.3pc to 0.6p on Tuesday after revealing that it has signed an engineering, procurement, and construction (EPC) contract with a major Chinese firm for its Monchetundra project in Russia.

    The company has been developing Monchetundra towards production since being issued a mining permit a c.2Moz gold and PGE deposit in November last year. In Wednesday’s update, the organisation revealed that it has been in discussions with Chinese business Sinosteel around securing an EPC contract and associated mine finance package since receiving the permit.

    Sinosteel is a base and enterprise metals enterprise and a major importer of iron ore to China. It has also built chrome and nickel operations in South Africa, China, Indonesia, and Australia.

    According to Eurasia, the Sinosteel EPC financing covers 85pc of total $176m contract value for Monchetundra. A $50m sub-contract is specified within the contract and assigned to Eurasia’s 80pc-owned subsidiary TGK, or a chosen sub-contractor, for engineering and pit development works in advance of mining.

    Alongside the Sinosteel deal, Eurasia also revealed that it has awarded a detailed project documentation contract for Monchetundra to Central Kola Expedition (CKE). This work must be submitted and approved within a year of receiving a mining permit.

    The report will outline further geotechnical, hydrogeological, metallurgical, and resource and reserve base work required as part of the broader mine development plan. These details will then contribute to a more detailed feasibility study of permanent conditions at Monchetundra alongside a revised reserves statement. The latter will be made using the site’s existing, state-approved feasibility study and reserves report.

    Eurasia intends to fast track this work, running it in parallel with the mine studies and programmes outlined in the Sinosteel EPC contract.

    CKE has already successfully developed the site’s feasibility study and ecology report and has an extensive track record in working with firms such as Norilsk Nickel, B2Gold, and Barrick. Eurasia added that Sinosteel has advised that it is prepared to work in close co-operation with CKE towards beginning the EPC contract and the expected associated financing.

    Next steps

    Elsewhere in Tuesday’s update, Eurasia said it plans to complete a survey of the land on and adjacent to Monchetundra’s proposed open pits during Spring this year. This information will be used to determine the final location and design of mine infrastructure such as tailings storage facilities, mine wastes dumps, plant locations, and roadworks. Although government agencies have approved provisional positions for the infrastructural elements, Eurasia said a ‘further level of precision is now required for more careful planning’.

    Finally, the business said it has also begun evaluating the flanks that surround the deposits at Monchetundra as potential new development licences. Under Russian law, the holder of a mining licence has the right to apply for further ground adjacent to an identified deposit and within 5km of an approved reserve.

    With this in mind, TGK - which holds the Monchetundra Mining Permit - can apply uncontested for areas on the 'flanks' of the existing licence that do not contain an approved reserve. It can also apply for areas on the flanks of the permit where a state-approved reserve is already registered, though this can be contested.

    In Tuesday’s update, Eurasia said it is aware of numerous deposits adjacent to Monchetundra and is now reviewing them as potential new development licences. Speaking to MiningMaven, the company’s resource and exploration geologist Keith Byrne expanded on this:

    ‘We are now in the process of a thorough desktop review of all the available literature. It is quite remarkable how much exploration work has already been done in the area, and the volume of occurrences and deposits already identified. Our previous exploration licence straddled the boundary between several mafic and ultra-mafic massifs – PGM’s and sometimes other metals concentrate at the base of, and close to the edges of these massifs, and are a focus of exploration. Of course, where you have several joined at a sort of triple junction - as we have just to the west and southwest of the town of Monchegorsk on Kola Peninsula - then it gets quite exciting and also a little complex.

    ‘We are in the process of modelling this area now in order to make sensible applications for further exploration ground -we have had communication from the local Nedra on that, and will be identifying which of the areas most suit our corporate strategy. There is certainly the potential to develop several further exploration targets in the immediate vicinity of our two current fully permitted licences, either as standalone mines or as a toll treatment opportunity.’

    Against this backdrop of strong operational progress, Byrne added that Eurasia is also enjoying a boost from favourable conditions in its associated metal markets:

    ‘It is more or less good news in the PGM sector these days, as regards metal prices at least. Of course, we have most direct exposure to Platinum and are now just weeks away from production at West Kytlim, so any positive news regarding platinum prices is most welcome as our sales contract to the Urals Precious metal Refinery is tied to the LME price. We also welcome the recent gains in Rhodium, admittedly a much smaller contribution than platinum, but a contribution none the less. When we started our first full season of mining in May 2018 we did not expect the ‘other PGM’ revenue stream to be very significant – subsequently, as it turned out that the grade in our resource was significantly understated, as often happens in alluvials, the ‘other PGM’ revenue took on a much greater significance. We recover Rhodium and Iridium at West Kytlim, alongside platinum and some gold.

    ‘Palladium has come off a little from the highs of over $1,600, but most commentators expected this bull run to be choppy, and that it may have some ways to go. It certainly revalues assets like our Monchetundra project, where future mine revenues are led by a high palladium to platinum ratio. We see this style of open pittable project with high palladium content and major contributions from other base metals (in our case nickel and copper, both of which now emerging as important battery metals) as the future of the PGM industry.

    Author: Daniel Flynn

    The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.

    Catalyst Information Services Ltd, the owner of MiningMaven.com, owns a position in the stock(s) and/or financial instrument(s) mentioned in the piece.

    Catalyst Information Services Ltd, the owner of MiningMaven.com, has been paid for the production of this piece by the company or companies mentioned above.

    MiningMaven.com and Catalyst Information Services Ltd are not responsible for its content or accuracy and do not share the views of the author.  News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance

     

     

  • Eurasia Mining to be granted permit to extend exploration area at West Kyltim (EUA)

    This morning, Eurasia Mining (LSE:EUA) announces it has been officially informed an exploration license for an additional 71.1km2 at its West Kytlim Open Pit Mine will be granted. West Kytlim is Eurasia's operating alluvial PGM gold mine in the Ural Mountains, Russia.

  • Eurasia Mining’s chairman Schaffalitzky on the significance of last week’s strong numbers in Russia (EUA)

    Last week saw Russia-focused Eurasia Mining (LSE:EUA) reveal that it has majorly surpassed production expectations and submitted an increased reserves estimate at its West Kytlim platinum project. With Eurasia’s shares now sitting at 0.4p, we asked chairman Christian Schaffalitzky to explain the positive impact that last week’s news could have on the firm’s operations moving forward.

  • Interview: Eurasia chairman Schaffalitzky discusses potential doubling of reserves and increased efficiency at West Kytlim mine (EUA)

    In its most recent update regarding its West Kytlim mine, Eurasia Mining (LSE:EUA) announced preparation work is underway ahead of first production. This is likely to commence in April once the seasonal thaw sets in. West Kytlim is located in the prolific platinum-producing region of the Ural Mountains of Russia, and the alluvial process relies heavily on running water. This is obviously problematic when everything is frozen solid. We caught up with Executive Chairman Christian Schaffalitzky to find out more about how Eurasia plans to ramp up its activities in Russia, once winter has loosened its grip.

    Eurasia is focused on two main projects, which are at different stages of development. Aside from the West Kytlim mine - which Eurasia brought online in spring 2017 – Eurasia is targeting first production on its Monchetundra license by 2021. Monchetundra is located in the Kola Peninsula in the far Northwest of Russia, and is the largest of Eurasia’s projects. State approved reserves and resources amount to 1.9 million ounces of palladium equivalent, which includes platinum and gold.  Eurasia received the mining license certificate for Monchetundra in December 2018, and can now look to advance the project through construction. In addition, a third smaller project is a gold and silver tailings project at Semenovsky.

    West Kytlim Potential

    As the stockpiling of ore commences in the chilly Ural Mountains, Eurasia can look back on a successful first full season of production at West Kytlim. 2018 production totalled 165kg of raw platinum, well in excess of the 100kg target.

    Eurasia will continue to work with the same team of contractors in 2019. The directors of Techstroy, the contractor who ran the front-end processing of the mine last year, have registered a new company Uralmetmash specifically to focus on the project.

    Uralmetmash is in the process of making operational tweaks to further improve extraction efficiency. A hopper to improve loading is to be added, improving the flow of material and the addition of a jig at the end of the process is being considered. Tailings from the alluvial process are being tested and may contain significant fine platinum fractions, which could be extracted in this manner.

    Eurasia is now turning its attention to building its available reserves and resources base, to extend the life of the mine and add value to the project. As Christian Schaffalitzky explained to MiningMaven, the reserves are there, they just need rubber-stamping;

    “We already have worked on wider areas of the license at an exploration level but when we came to apply for the mining license we could only apply for the areas that we had proved to be reserves and advanced resources. We dropped the rest of the license area because we hadn’t got to the reserves definition stage yet, but we know there’s platinum in those areas, so that’s going to add to the future life of the mine.” 

    And the potential reserves are plentiful;

    “We’re talking of the potential of certainly doubling the reserve or resource base, but that’s speculation at this stage until we receive official confirmation.” Schaffalitzky adds.

    State approved reserves are currently being mined at the Kluchiki area A revised reserves calculation for this area was submitted for approval in October 2018. This will increase the mineable reserves allowing Eurasia to take a decision on adding a second washplant to expand its operations. A larger development program is now being finalized, to upgrade all of the currently identified resources and reserves on the mining license to mineable reserves. This reserves development program will be specifically tailored to suit proposed ore schedules.

    Operating in Russia

    You might expect operating in Russia could be problematic, but Schaffalitzky tells us this is simply not true.

    “We have successfully applied for and have been granted two mining licences on two areas in Russia. We have been operating since 1996 in Russia, exploring and now mining, and at no stage have we had any obstacles relating to the jurisdiction.

    The only delaying factor is a bureaucratic one.

    We have a certain amount of reserves to mine this year but really want to extend our active reserves further and that required another report to the government, and then the government, in this case at local level, becomes the logjam.” 

    Schaffalitzky also told us that he feels the market can underestimate how long bureaucratic processes can take when progressing an asset through to production. This is particularly the case when aspiring to develop larger projects such as Monchetundra.

    Monchetundra

    In 2016, Eurasia completed a Feasibility study for two open pits at Monchetundra – West Nittis and Loipishnune. This culminated in the granting of a mining license for 2m ounces of palladium-lead mineralisation, including platinum, gold, nickel, and copper.

    Having received the official certificate a month ago, Eurasia now looks forward to progressing the project on a number of fronts. Work is starting on an engineering and development plan for the mine. Outline terms for an Engineering Procurement and Construction (EPC) contract have been agreed with Sinosteel, the Chinese state-owned equipment manufacturing and engineering firm. Under the terms of the agreement, Sinosteel would provide finance to the tune of $151m. That’s 85% of the estimated $178m costs required to build the mine.

    “Sinosteel will carry that loan on their books until the plant is fully operational. The remaining 15%, roughly $24m, is to be Eurasia’s equity contribution.”says Schaffalitzky.

    That’s not pocket change for Eurasia to find, however another factor of the deal may make potential investment in the project even more attractive. There is to be a cash back element from Sinosteel, which will accelerate the return on investment back to Eurasia. Sinosteel will sub-contract Eurasia to do certain proprietary works such as geo-technical work for the mine, road infrastructure and so on. Schaffalitzky says this could equate to $50m less what it costs to do the works, over the total construction period of roughly two years. The mine is expected to take 18-24 months to build and will have the capacity to produce around 120,000 ounces of Palladium-lead mineralisation per annum.

    Although there is still much to do to piece together the Monchetundra puzzle, Schaffalitzky highlights the project is perfectly located.

     “The Monchetundra project is within 6km of a town of 50,000 people, there’s power, rail, and main roads. The infrastructure is fantastic, this is really unusual in Russia, for people to be so close to potential work.

    There’s even a nickel-copper refinery near the town. It’s not running at full capacity anymore, but there used to be other nickel-copper mines in the district which supplied it, so it’s actually running with spare capacity at the moment.”

    Steady progress

    With some commodities, notably palladium and gold, starting to show signs of recovery, there is cause for some optimism across the junior resource sector. Palladium has had an incredible run hitting around $1450 an ounce this month. The move, which has coincided with a sharp decline in the platinum price, is likely down to news headlines condemning diesel vehicles in favour of petrol – diesel vehicles require platinum while petrol favour palladium.

    Schaffalitzky believes a ‘crunch’ may happen in the platinum supply since many labour-intensive South African mining companies are running at a loss with the platinum spot price so low. Subsequently, it seems likely that platinum will eventually recover, once the widespread headlines become chip-paper.

    Regardless of the current cyclic dip in commodity prices, Schaffalitzky told MiningMaven the market should anticipate steady progress over the next 6 months across all of its projects. The company seems on course for a positive start to 2019.

    Author: Stuart Langelaan

    The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.
    Catalyst Information Services Ltd, the owner of MiningMaven.com, owns a position in the stock(s) and/or financial instrument(s) mentioned in the piece.
    Catalyst Information Services Ltd, the owner of MiningMaven.com, has been paid for the production of this piece by the company or companies mentioned above.
    MiningMaven.com and Catalyst Information Services Ltd are not responsible for its content or accuracy and do not share the views of the author.  News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance.

     

  • Mining to commence again at Eurasia’s West Kytlim PGM Project (EUA)

    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

    The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.
    Catalyst Information Services Ltd, the owner of MiningMaven.com, owns a position in the stock(s) and/or financial instrument(s) mentioned in the piece.
    Catalyst Information Services Ltd, the owner of MiningMaven.com, has been paid for the production of this piece by the company or companies mentioned above.
    MiningMaven.com and Catalyst Information Services Ltd are not responsible for its content or accuracy and do not share the views of the author.  News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance

  • MiningMaven Podcast 103 - with Chairman of Eurasia Mining, Christian Schaffalitzky (EUA)

    Today’s guest is Christian Schaffalitzky, Chairman of Eurasia Mining (LSE:EUA).  Eurasia is a palladium, platinum, rhodium, and gold producer with a number of producing and exploration projects in Russia. The company’s primary focusses are the West Kytlim platinum and gold mine in the Ural Mountains, and the 2 million ounces of palladium & platinum equivalent Monchetundra asset on the Kola Peninsula. Last year, output from the West Kytlim mine exceeded expectations with platinum production of 165kg. With seasonal preparations well underway and the washplant expected to re-start shortly, Mr Schaffalitzky says Eurasia is targeting similar production levels in 2019.

    This interview was recorded on 23rd April 2019.

    All opinions expressed are those of MiningMaven and the respective guests, unless otherwise stated and should not be construed as investment advice or a recommendation to buy shares in any featured Company. From time to time MiningMaven principals may take equity positions in companies featured. Listeners are advised to do their own extensive research before buying shares which, as with all small cap exploration stocks, should be viewed as high risk. Investors should also seek the advice of a qualified investment adviser or stockbroker as they deem appropriate. MiningMaven.com is a trading division of Catalyst Information Services Limited. Registered in England no. 06537074 (Registered Office Address 3rd Floor Ivy Mill, Crown Street, Manchester, M35 9BG) #gold #mining #investing

    Author: Stuart Langelaan

    The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.

    The Author has been paid to produce this piece by the company or companies mentioned above.

    Catalyst Information Systems Ltd, the owner of MiningMaven.com, owns a position in the stock(s) and/or financial instrument(s) mentioned in the piece.

    Catalyst Information Systems Ltd, the owner of MiningMaven.com, has been paid for the production of this piece by the company or companies mentioned above.

    MiningMaven.com and Catalyst Information Systems Ltd are not responsible for its content or accuracy. News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance.

     

     

  • MiningMaven Q&A: Eurasia Mining’s Christian Schaffalitzky on his firm’s ambitious plans for 2019 (EUA)

    MiningMaven recently caught up with Eurasia Mining’s (LSE:EUA) chairman Christian Schaffalitzky to discuss the Russia-focused exploration firm’s plans following a busy news period.

    Last month saw the business announce that preparatory work, including tree felling, had begun ahead of this year’s production at its West Kytlim mine in Russia’s Urals region. This is expected in April once the seasonal thaw sets in.

    Meanwhile, the company is also continuing to make progress at its 80pc-owned Monchetundra project in the Kola Peninsula, where first palladium, platinum, and gold production is targeted in 2021. The business received a mining licence for the project in December 2018, and can now look to advance the project through construction.

    Read on for more details on Schaffalitzky’s plans at its principal assets over the coming year as well as his views on the platinum market and Russia as an operational jurisdiction:

    MiningMaven: Can you give us an overview of your plans at West Kytlim now that operations have re-started?

    Christian Schaffalitzky: We are waiting for the ice to melt so we can start the washing process. If things go well, we could begin to produce in April. It depends on when the thaw kicks in because we need running water to wash the gravel.

    The preparatory work required ahead of mining is relatively straightforward. First of all, the site contains ‘pay gravels’ that contain ore. We can start working on clearing forest and non-ore from above these gravels because we have identified where the platinum-bearing gravels are. Forest is removed, overburden is stripped back, and this is work that can be undertaken in winter and early spring. So that’s the immediate work plan.

    We are actually mining sediments that are in an active river system. So, once the river is flowing, we redirect it for the section on which we are working and also the terraces on the side of the river, from earlier river systems. Those terraces are also platinum bearing, giving us several generations of sand and gravel that are potentially platinum-bearing. That is what we are looking for when we are exploring.

    MM: Did the company deliver its production targets last year?

    CS: We did, yes. We had an informal target of around 100kgs of platinum, and we produced 165kgs. So, we were delighted with our performance in spite of difficult conditions in the platinum market, where prices remained very weak as gold and palladium roared ahead.

    MM: On that note, do you think platinum prices are basing and are ready to move up shortly?

    CS: There seems to be a perception in the market that there is an excess of platinum globally, which is pushing prices down. This is because the metal is used primarily in catalytic converters in diesel engines, which are expected to suffer declining demand over the coming years.

    Personally, I don’t buy into the idea that this dynamic is this simple. At current prices, around 80pc of the platinum mines in the world – or at least in South Africa – are operating below breakeven. They cannot keep working on negative income. You also have to remember that many of the underground mines in South Africa are old and, as such, are not mechanised. This could ultimately cause them to close, which would also throw up serious geopolitical concerns as they employ thousands of people who cannot be fired overnight. New mines are coming, of course, but as these older mines close, it will be a big problem for supply.

    MM: So, with South Africa’s potential issues in mind, is the area of Russia you are based in prolific for mineralisation?

    CS: Yes. If we focus on the Urals, it is famous for platinum. In fact, it was the first place in the world where platinum was discovered and then worked commercially. The Russians discovered significant platinum nuggets at the beginning of the 19th Century, and work has been going on since. Over this period, 16Mozs of the metal has been worked, so it really is prolific.

    There are both small-scale and large-scale platinum mining operations in the river system. What you do not find in the Urals are hard rock platinum mines, which are present in South Africa. In other words, in the current environment, the only economic platinum that we see in the Urals is as alluvial deposits like our West Kytlim Project, which are also very low cost operations, relative to the South African mines.

    At Monchetundra the focus is on Palladium as our identified ore bodies are at least 2:1 Pd:Pt. There are several other licences adjacent to our current permit and further afield, which we are reviewing. We believe Kola can be a really hot area on the global PGM map in years to come.

    MM: Moving away from the Urals, what can you tell us about developments at the Monchetundra project?

    There are a lot of elements in place at Monchetundra and a lot of things that we are currently doing. It is a complicated, big project, that very well may be a company maker for us. To recap, we have now completed a Russian style feasibility study to apply for a mining licence. This has now been granted and covers c.2Moz of palladium-rich mineralisation with platinum and gold as well as copper and nickel.

    We now have to have the mine development approved by the government, and also by ourselves. In other words, we need to get the engineers at work now, to put together the actual construction of the mine, and to make the planned detailed engineering for the mine.

    As part of this, we signed a contract back in 2016 with Sinosteel, a large Chinese engineering group to do an Engineering, Procurement, and Construction contract. They did an estimate at the time that said it would cost about $178m to construct the mine in roughly two years. They estimated that it could produce 130,000oz of palladium mineralisation per annum.

    To do the project, they would finance 85pc of the $178 million, and they would carry that loan on their books until the plant was fully operational, or commissioned and handed over. And then it goes on to Eurasia's books. The remaining 15pc, which is roughly $24 million, is our bill- our equity contribution to the development of the mine.

    However, at the same time, there is a cashback element to the project whereby Sinosteel sub-contract to us to do specific preparatory work. All that part of the work is subcontracted back to Eurasia.  So, what this means is that we have to come up with $24m now, but we get $50m back, we believe less than what it costs to do the work. We've pretty much estimated that this will actually generate positive cashflow for our development.

    MM: Excellent, so can you give shareholders any indication of when more information will be available?

    CS: Right now, we are preparing the plans for all of this work and are making sure we have the licensing schedule organised with the government, and so on. There is a lot of paperwork involved in all of the aspects of the deal, and it does take time. We have to do it right, and we are a small company, relatively speaking, and this is a massive project, so we have to get it right. We will be providing further information to the shareholders in stages over the coming months with an update due soon.

    Interview by Stuart Langelaan

    The interviewer does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.

    Catalyst Information Services Ltd, the owner of MiningMaven.com, owns a position in the stock(s) and/or financial instrument(s) mentioned in the piece.

    Catalyst Information Services Ltd, the owner of MiningMaven.com, has been paid for the production of this piece by the company or companies mentioned above.

    MiningMaven.com and Catalyst Information Services Ltd are not responsible for its content or accuracy and do not share the views of the author.  News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance.