Eurasia Mining Regulatory News (EUA)

Eurasia Mining plc (AIM: EUA)

("Eurasia" or the "Company")

Gold Tailings Production Opportunity

Eurasia Mining plc, the Russia focused PGM exploration and development company, is pleased to announce the signing of a Heads of Terms ("HOT") agreement with OOO Metallurg Complect, a Russian minerals company, whereby the Company has the exclusive right to negotiate to acquire up to 67% in a gold tailings opportunity, the Semenovsky Tailings Project ("STP"). Any acquisition will be contingent on the completion of successful due diligence on the project and the execution of an acquisition agreement, the terms of which are not yet agreed. At this stage there can be no guarantee that any transaction will proceed.

Eurasia are also pleased to confirm that they have simultaneously executed a 3 month option agreement with Metal Tiger plc (LON:MTR) whereby Metal Tiger can participate in the STP in line with the two companies collaboration agreement signed 29 December 2014, in which MTR has the opportunity to participate equally in new projects identified by Eurasia.

Highlights:

· HOT agreement signed in respect of the STP, a near term gold production opportunity in Russia;

· HOT provides for a six month period of exclusivity enabling technical study completion, sampling, metallurgical testing and general due diligence;

· Early stage, internal work undertaken by the Company indicates potential total gross revenue of approximately $57m over a 8.5 year mine life, with net project total cash inflow of approximately $29m or $3.5m per annum;

· The same work by the Company has provisionally estimated that project net present value is c.$14m at a 10% discount rate, project IRR of 65% and project payback within 1 year of production start-up, against a total estimated plant construction cost of approximately $5m. These figures will be reviewed and updated when Eurasia has undertaken more detailed work on the site;

· The STP is the first potential project to emerge from the EUA/MTR collaboration announced on 29 December 2014, and is the first in a potential series of near-term producing opportunities available;

· Under the Option Agreement, MTR has paid a $25,000, 3 month, option fee to Eurasia. If MTR elect to participate in the STP, MTR will pay up to an additional $75,000 to Eurasia to cover the 6 month exclusivity period work programme and then share project participation equally in a Joint Venture arrangement with Eurasia, this arrangement will be the subject of future announcements if it is to progress.

Christian Schaffalitzky Managing Director of Eurasia Mining said: "We are delighted to secure this opportunity which, if successfully implemented, will see Eurasia Mining become a gold producer to compliment the planned 2016 platinum production at the West Kytlim Project.

Whilst still at an early stage and in need of independent verification, we still believe our initial work demonstrates that the project economics are extremely robust and that this project could provide a considerable boost to the Company through the generation of positive cash flow.

As a business our focus is now on building operational cash inflow to achieve our aim of becoming self-financing and thus protecting investors interests by mitigating share dilution.

Our experience in-country in Russia, and our potential access to local project level financing partners, gives the board confidence that, save for project due diligence and planning, the capital cost of plant construction may be secured by in-country debt finance, aiming to shield investors from dilution at the Eurasia Mining plc level.

Furthermore, should we secure the commitment of Metal Tiger to fund the exclusivity period costs, Eurasia Mining will be free carried through this initial stage of the project work.

This project represents the first in a series of potential precious metals production projects that Eurasia is considering and we continue to evaluate and assess additional opportunities.

Further information will be provided to market in respect of each step of the project progress going forward."

Background to the Semenovsky Tailings Project ("STP")

The plant at Semenovsky operated from 1943 to 1998 processing oxide ores chiefly from four local deposits around the Semenovsky Mine in the Republic of Bashkiria. It operated as a gravity concentration plant followed by cyanide leaching of gravity tails with total historic processed ore amounting to 2.7m tonnes at grades ranging from 4 to 20 g/t. Several generations of exploration drilling and metallurgical testwork have demonstrated the potential of further gold recovery from gold in the plant tailings.

The project is owned by OOO Zolotype Peski, it generates no revenue or profit and has a book value of £77,500.

HOT and Exclusivity Agreement Summary

Eurasia has signed a HOT agreement with OOO Metallurg Complect and its wholly owned subsidiary OOO Zolotype Peski (the "Vendors"). The HOT provides Eurasia a six-month period of exclusivity to undertake further due diligence and project review of the STP.

During the next six months ending 15 April 2016 Eurasia will complete the following work:

- Completion of a Technico-Economicheskiye-Obosnovaniye ('TEO'), a Russian national instrument similar in form to a feasibility study which will demonstrate the economic development of the project to Russian Ministries for Subsoil Use.

- Following statutory approval of the TEO, Eurasia will conduct a sampling programme at STP to allow appropriate metallurgical testwork and mine scheduling of the ore.

Also, under the terms of the HOT agreement the vendors will within 60 days secure formal execution of a further, more detailed HOT, secure payment for and delivery of a project Reserves Report and provide payment in respect of administration of the approvals process attaching to this agreement.

Should the outcome of the work undertaken during the exclusivity period prove favourable then Eurasia will have the right to secure a 67% interest in the STP for nil consideration, save that Eurasia will commit to funding up to $5 million to develop the asset. Further updates will be provided in due course.

The HOT currently provides for the vendors to buy back up to 7% of the STP following plant construction, by paying in cash to Eurasia at three times the cost incurred by Eurasia in respect of the percentage bought back up to the point of buyback. If this clause is carried into the acquisition agreement, and the vendors exercise their full buyback rights of 7%, Eurasia's interest would reduce to 60% of the project.

All parties have agreed to use reasonable endeavours to complete the transaction within the exclusivity period of six months.

STP Financial Summary

Should Eurasia decide to proceed with the STP they will commit to secure funding for project planning and construction which is expected to comprise two distinct phases starting on the completion of the exclusivity period and agreement of the parties to proceed:

- within 12 months, completion of design, engineering and approvals (budgeted cost $260,000);

- within 18 months thereafter, construction of the gold processing plant (budgeted cost c.$5m).

Early stage, internal calculations undertaken by Eurasia on the STP indicates a potential 8.5 year mine life, producing an average of 5,600 ounces of gold and 682,000 ounces of silver per annum and generating total revenues of $57 million at a projected gold price of $1,082 per ounce and projected silver price of $14 per ounce (utilizing gold and silver prices as at 12 November 2015).

After allowing for processing costs, land rehabilitation and relevant taxation, Eurasia has estimated that free cashflow would total $29m or $3.5 million per annum.

Utilising a 10% discount rate Eurasia has estimated that the project Net Present Value would be approximately $14m with a project Internal Rate of Return of approximately 65%.

The figures given above are given for guidance only and are subject to updating, correction and verification. The figures will be reviewed and updated when Eurasia has undertaken its own more detailed work on the site.

Note: as outlined above the EUA interest in the STP would be 67% in total. If the vendors exercised their full buyback right of 7% the interest would reduce to 60% EUA.

Metal Tiger Option and Potential Participation Terms

Metal Tiger have paid $25,000 immediately to secure an option with Eurasia that affords Metal Tiger the opportunity to elect to participate in the STP on equal terms with Eurasia. The option period expires three months from today's date on 12 February 2016.

If Metal Tiger exercise their option, they will fund up to $100,000 of exclusivity work programme costs, with the option payment deductible therefrom, meaning Metal Tiger's additional contribution will be up to $75,000. The currently budgeted costs of the exclusivity period are $72,000, with the additional $28,000 being a contingency for coverage on unforeseen expenses.

Should Metal Tiger exercise its option, and both companies confirm they wish to pursue the STP opportunity by the end of the exclusivity period, the project financial and operational risks and rewards will be shared equally between Eurasia and Metal Tiger. It is anticipated that this will be in the form of a specially formed Joint Venture held through a UK private limited company.

Background to Eurasia Mining and Metal Tiger Collaboration Agreement

In December 2014 Eurasia and Metal Tiger entered into a New Project Collaboration and Investment Agreement which was announced to market on 29 December 2014.

This agreement gave Metal Tiger the right of first refusal to participate and co fund, on an equal basis with Eurasia, any new projects or investments undertaken by Eurasia for the period of 18 months from the date of the agreement.

Consent for release

EurGeol Christian Schaffalitzky, FIMMM, PGeo, CEng, is a director of the Company. He has reviewed the update and consents to the inclusion of the exploration information in the form and context in which it appears here. He is a Competent Person for the reporting of these results.

Enquiries:

Eurasia Mining Plc

Christian Schaffalitzky/Michael de Villiers

+44 (0)207 932 0418

WH Ireland Limited

Katy Mitchell/Liam Gribben

+44 (0)161 832 2174

Beaufort Securities

Elliot Hance

+44 (0)207 382 8300 

Loeb AronJohn Beresford-Peirse+44 (0)207 628 1128