Eurasia Mining Regulatory News (EUA)

21 Apr 2006 07:00

Eurasia Mining PLC21 April 2006 Eurasia Mining plc ("Eurasia" or "the Company") EURASIA DISCOVERS VIRGIN PLATINUM ALLUVIAL DEPOSIT AT WEST KYTLIM, URALS, RUSSIA Eurasia Mining plc is pleased to report the discovery of a previously unknownand unmined alluvial platinum deposit on parts of the Tylai River terraces inits West Kytlim licence in the Central Urals of Russia. Drill results from the first traverse across the terraces average 335 milligramsper cubic metre (mg/m3 - the standard method of reporting drill results foralluvial deposits) over a surface width of 320 metres (m) and an averagethickness of 3.2m. Details of the results are provided on the company's web sitewww.eurasiamining.co.uk. The deposit lies under 1 - 8m of barren river sediment which hitherto hasconcealed the deposit from previous mining activity. The results are consistentwith Eurasia's exploration model, which has identified this target as beingapproximately 5 km long on the south side of this river with an estimated totalpotential of 5.1 million cubic metres. A second as yet untested target remainsto be explored on the north side of the Tylai River. In addition to this virgin discovery and located near the headwaters of theTylai river, a second drill traverse at Bolshoya Sosvovka has identifiedmaterial comprising both tailings from an earlier dredging operation and blocksof remnant unmined material that averages 320 mg/m3 from surface overthicknesses of 3.6 to15.3 m. Eurasia's work indicates a potential volume of 3.7million m3 over a surface width of some 200 m and a potential length of 2 km. An intensive drilling programme continues with the aim of delineating blocks ofmineralisation to be test-mined and processed during this (2006) summer using aplant that has been constructed by Eurasia. Additional target areas within thelicence area have yet to be assessed. Commenting on the results, Managing Director Christian Schaffalitzky said: "Weare pleased to see the fruits of our work at West Kytlim. Two potential areas ofproduction have been identified. As the capital costs for mining these projectsare modest, helped by using equipment owned by our local partner, Eurasiaexpects to see cash flow in 2007 if a mining permit is obtained in time for thesummer season. We envisage a project which would produce at least 15,000 ouncesof platinum per annum." Located approximately 350 km north of Ekaterinburg in the Urals region ofwestern Russia, the West Kytlim project is situated within the Urals alluvialplatinum belt which was historically the third largest platinum producing regionof the world after the Bushveld in South Africa and Norilsk in Russia. TheKytlim district itself has produced approximately 50 tonnes (1.6 million ounces)of alluvial platinum to date. Eurasia and Anglo Platinum, the largest platinumproducer in the world, work jointly on the Urals programme through their 50:50joint venture company Urals Alluvial Platinum Limited. Anglo Platinum is funding100% of costs up to the completion of a Feasibility Study. The joint ventureholds a 75% interest in the West Kytlim project, with the remaining interestheld by Production Artel Yuzhno-Zaozersky Priisk, a local successful platinumand gold mining company. The exploration licence covers an area of 171 km2 over a drainage system whichwas partially worked for alluvial platinum in the past by dredging and manualmethods. The joint venture is targeting previously unworked and untested terracegravels, as well as the tailings from past production which can be reworked torecover residual platinum using modern processing technologies. The exploration licence term expires in December 2008, by which time a mininglicence would replace it. An aggressive exploration and development programme isunderway on the area to facilitate early development. Detailed drilling for afeasibility study on two target areas commenced in September 2005 and the firstdrill results have allowed a preliminary assessment of the resource potential.Test mining will be undertaken to confirm both the resources and the processingmethods to be used in mining. The objective is to commence production in 2007,assuming successful grant of a mining permit. Processing of alluvial sediment is simple in principle, with excavation andwashing of the platinum-bearing sediments carried out so that a heavy mineralsconcentrate is produced. This concentrate consists of platinum-rich particles aswell as other heavy minerals such as chromite and magnetite. This concentrate isfurther processed to leave the platinum concentrate, which consists primarily ofa mineral alloy called isoferroplatinum. The platinum concentration of thisalloy ranges from 78 to 89%, with iron and copper comprising most of theremainder, with trace gold, silver and other platinum group metals. Thismaterial is sold directly to refineries, with payment based on the recoveredmetal. As this material is high grade, the refining costs are minimal comparedto the sulphide-rich materials forming the bulk of the world's platinumproduction. Resource estimates for alluvial projects are constructed differently from thosecalculated on hard rock mineral deposits. The grades are reported as therecovered weight of platinum concentrate measured against the volume ofsediments sampled or extracted. Drilling of samples proceeds on a grid which isdesigned for approval of reserves by the Russian authorities - an essential stepfor obtaining a mining permit. At West Kytlim, two drillhole profiles, one oneach target area, provide an early indication of the grade of platinum, thedistribution of metal in the sediments and the thickness and extent of themineralised layers. A number of small producers in the Urals are economicallyextracting platinum at grades of 100 to 150 mg/m3. Eurasia will be reporting the resource estimates being submitted to the Russianauthorities and these will be audited by Eurasia and Anglo Platinum for thatpurpose. A development plan will be produced based on these estimates and,following the granting of the necessary permits, production can commenceimmediately. The work completed and the technical information provided in this release havebeen verified by EurGeol Christian Schaffalitzky, PGeo, FIMMM, CEng who is aqualified person under stock exchange regulations and authorised by UralsAlluvial Platinum Limited to make this release. Eurasia is a mineral exploration company specialising in platinum and goldexploration in Russia. In addition to its Urals exploration interests Eurasiaholds three licences totaling 475 square kilometres on the Kola Peninsula innorthwest Russia which are subject to a similar joint venture with AngloPlatinum. The company also has an exploration alliance funded by AngloGoldAshanti concerning gold exploration in eastern Siberia. For further information contact: Christian Schaffalitzky / Michael Martineau, Eurasia Mining Plc: +44 (0) 20 7495 4877Laurie Beevers, W H Ireland: +44 (0) 7903 164 004Simon Mooney, Loeb Aron & Co Ltd: +44 (0) 20 7628 1128Sarah Samworth, First City Financial Public Relations: +44 (0) 20 7436 7486 +44 (0) 7977 276 023 This information is provided by RNS The company news service from the London Stock Exchange