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LONDON (Alliance News) - Eurasia Mining PLC Wednesday said the agreement signed between fellow London-listed Metal Tiger PLC and a Russian gold miner concerning the Semenovsky tailings project has been extended to facilitate a study on the asset.
Eurasia and Metal Tiger are working in partnership after signing a heads of terms agreement back in November last year with OOO Golden Sands, which provided the two London-listed companies with the exclusive right to conduct due diligence on the tailings project over a six month period.
The agreement also gave Eurasia and Metal Tiger the exclusive right to acquire a 67% stake in the Semenovsky tailings project owned by Golden Sands.
However, that agreement has now been extended by a further three months until August 15 to allow a metallurgical study to be completed on the project, which Eurasia said demonstrated further development of the commercial relationship between all three companies.
Since the agreement was signed, a TEO covering the project has been approved by the Bashkirian Mines Department. A TEO is the Russian equivalent of a pre-feasibility study, but that is not recognised elsewhere around the world.
The document demonstrates the potential for the economic extraction of the contained gold and silver reserves according to a specific processing scheme. A drilling programme, to extract samples for metallurgical analysis, has also been completed, and these samples are currently being prepared for forwarding to an internationally accredited testing facility.
Eurasia was the only London-listed firm to originally be involved in the deal when it was signed last year, as it looked to capitalise on the project which Eurasia believed could generate total gross revenue of around USD57.0 million over an 8.5-year mine life at the project.
However, Metal Tiger secured an option from Eurasia to participate in the project, paying GBP25,000 upfront to secure the option and paying GBP75,000 to exercise it in February this year.
When Metal Tiger joined the project, the pair said the latest project data demonstrated "significantly improved" project financials, including a 64% increase in net present value to USD23 million.
Eurasia Mining shares were trading up 6.2% to 0.770 pence per share on Wednesday morning whilst Metal Tiger shares were up 1.2% to 4.86 pence per share.
Metal Tiger released a first quarter update on Tuesday, when Chief Executive Paul Johnson conceded the company was a potential takeover target following "one of the most important and value generative periods" for the company that saw Metal Tiger make "tremendous progress".
Although no offer for the company has been made, Johnson addressed the possibility due to concerns being raised about the share options being awarded to staff and directors later this year being affected by any such deal, as the CEO pledged to protect those 25.0 million share options under any proposed takeover.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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