3rd Nov 2016 10:42
LONDON (Alliance News) - Eurasia Mining PLC on Thursday said it is confident of developing its most advanced project into production despite the current climate by attempting to replicate the successful advancement of the West Kytlim project that recently began producing.
West Kytlim lies in the Urals region of Russia and production of platinum started in early September but Eurasia was not in a position Thursday to publish final production figures and projected income estimates for the asset. However, it did state that it has avoided stopping production due to the weather, adding that there is a "reasonable" forecast "for the coming weeks".
"The company will provide details of the final production figures and projected income on completion of the season's works," said Eurasia.
"We have endeavored to replicate the structure, which has been proven to work at West Kytlim, at the Monchetundra project with an additional contract to cover the considerable capital outlay. We believe this presents a route to project development which minimizes exposure for Eurasia, further shareholder dilution, and allows the project to be developed despite a continuing resource sector downturn," said Managing Director Christian Schaffalitzky.
Monchetundra lies in the Kola Peninsula in north-west Russia and Eurasia awarded an engineering, procurement and construction contract to Sinosteel, one of the largest Chinese stated-owned engineering groups, in October. Sinosteel will build the processing facility at the project, capable of processing 1.7 million tonne of ore each year taken from two open pits, which could produce 130,000 ounces of platinum per year.
"Sinosteel is, under the terms of the contract, highly motivated to deliver the plant as stipulated in the contract, because they will be responsible for USD150.0 million until they reach the production level of 130,000 ounces of platinum equivalent per annum," said Schaffalitzky.
"Further outsourcing the running of the mine to an international company with experience in operating mines is now a top priority for Eurasia. Engaging such a group to act as owner's representative during plant construction aims to ensure the plant is built in line with best international practice. We look forward to updating on developments in this regard in the near term," he added.
Eurasia shares were up 2.8% to 0.745 pence per share on Thursday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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