13th Feb 2006 07:01
Eurasia Mining PLC13 February 2006 Eurasia agrees acquisition of three major Platinum projects in Kola and agreesjoint venture on Kola projects with Anglo Platinum Eurasia is pleased to announce that it has entered into an agreement to acquirea 100% interest in three large exploration areas on the Kola Peninsula inMurmansk Oblast, Russia. The Kola projects are located in three explorationlicences held by two Russian companies and comprise a number of advanced andearly stage platinum group metals (PGM) targets. The consideration for theselicences is $1.5 million and 10 million new Ordinary Shares in Eurasia, to beissued at par value. The vendor is Audley Investments Limited, a BVI basedcompany with mineral interests in Russia. The three licence areas areVolchetundra, held by LLC Yuksporskaya Mining Company, and Monchetundra and WestImandra, held by Joint Stock Company Terskaya Mining Company. The transactionwill be completed following transfer of the funds, about which a furtherannouncement will be made, and the allotment of the shares in the two Russiancompanies to Eurasia. Simultaneously, Eurasia has agreed with Rustenburg Platinum Mines Limited(Cyprus) ("RPM"), a wholly owned subsidiary of Anglo Platinum Limited of SouthAfrica, to include these projects in their existing joint venture with Eurasiaby selling an 80% interest in the Russian companies into the 50:50 joint venturecompany, Urals Alluvial Platinum Limited ("UAP"). This transaction is subject tocertain conditions, which include normal regulatory approvals in South Africa,the UK and Russia. RPM will acquire their interest by providing $1 million aspart of the total consideration. On completion, Eurasia will hold a 60% interestin the Kola projects. Under the agreement, RPM will fund the first $10 million of Kola expenditurebefore both parties fund in proportion to their equity interest. On completionof a bankable feasibility study or the completion of the $10 millionexpenditure, which ever is the sooner, RPM have 90 days to purchase the 20% heldby Eurasia for $6 million or $5 per ounce of platinum group metals in Russian C1and C2 categories, whichever is the lesser. Should they exercise this option,Eurasia would hold 40% of the projects through UAP. RPM can also opt to requireUAP to purchase this interest under the same conditions. Exploration expendituretotaling approximately $589,000 incurred during 2004 and 2005 will also berefunded, of which Eurasia's liability represents $246,000. Eurasia's planned exploration programmes will target mineralization in a majorgroup of ultramafic and mafic intrusive rocks that occur in several areas withinthe Kola region. They are very similar to geological host rocks for PGMmineralization elsewhere around the world, including the Norilsk Complex ofRussia and the Bushveld Complex of South Africa. The areas examined by Eurasiaand selected for exploration work comprise at least three large intrusions.Exploration work in 2004 and 2005 on the three areas included trenching,drilling and geochemical work, with samples collected in 2005 currently awaitinganalysis. Pending these results, a preliminary exploration program to includedrilling on all three areas has been drawn up. The most advanced area is at Monchetundra, located close to the city ofMonchegorsk. Drilling has identified four platinum bearing horizons withdifferent characteristics. Two are palladium rich while the other two carryhigher platinum grades. High grade results include intersections of 3.58 to38.78 grams per tonne (g/t) of combined platinum and palladium, with the highgrades over intervals of 0.4 to 2.8 metres. Lower grade intersections at somepoints overlap and extend beyond them - for example 35.9 metres and 13.4 metresof 1.94 g/t and 2.2 g/t of combined platinum and palladium, respectively. Thework completed to date allows Eurasia to plan a detailed drilling program toassess continuity along strike and down dip. There is good evidence that thezones are continuous, except in an area where faulting has disrupted thegeology. During 2005 additional drilling was completed on two of the horizonsfor which analytical results are expected in the coming weeks. At Volchetundra, trenching work to date has identified two target areas: onewith grades of 0.7 g/t of platinum group metals over a thickness of 10 metres,and a second 4.7 g/t of platinum, 4.6 g/t of palladium and 2 g/t of gold over athickness of 2.6 metres. The licence covers a major intrusion with a strikelength of 40 kilometres. Drilling is planned to commence as soon as a drill rigcan be mobilized to site. The 229 square-km West Imandra licence covers a large intrusion hosting layeredunits of chromitite towards the base and magnetite with anorthosite towards thetop, both often associated with PGM mineralization. A drill hole on a chromititeunit has assayed platinum at 1g/t. A recent trench on anorthosite below themagnetite layers gave 2.94g/t of PGMs over a 1 metre-thick zone. The Kola region has a long history of mining and metal refining, principally ofnickel and copper with PGMs as by-product. PGM mineralization was discovered inassociated ultramafic and mafic intrusive complexes, which extend over severalhundred kilometers, in 1996. Exploration has only been carried out in recentyears but with increasingly favourable results. As in the Urals, Eurasia is responsible for the management of UAP's work, with acurrent indicative budget of $2.5 million for all areas being worked on thisyear. Currently all funds are provided by RPM, with Eurasia entitled to a 5%management fee. In the Urals, detailed appraisal of an alluvial platinum targetis underway, with a bulk mining test planned for the summer. Anglo Platinum, theworld's largest PGM producer, has been working with Eurasia in Russia over thepast five years. Commenting on the above, Managing Director Christian Schaffalitzky said: " I amdelighted to have finally agreed this important transaction which has occupiedthe company for some time. Furthermore we are very pleased that Anglo Platinumis joining us on these substantial platinum projects. We look forward toexpanding our existing working relationship which has been in place since 2000.The Kola licences hold out excellent promise and in Eurasia's opinion rank asone of the most exciting new opportunities in platinum in the world today." For further information contact: Michael Martineau/Christian Schaffalitzky, Eurasia Mining PLC: +44 (0) 20 7976 1222Laurie Beevers, W H Ireland: +44 (0) 7903 164 004Allan Piper, First City Financial Public Relations: +44 (0) 20 7436 7486 +44 (0) 7736 064 982 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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