Last checked at 21 Nov 2016 10:08
Eurasia Mining plc (AIM: EUA)
("Eurasia" or the "Company")
Potential Agreement
The Company is pleased to announce that its 80% subsidiary company, Terskaya Gornaya Kompaniya ('TGK'), has granted exclusivity to Lemuria Royalties Inc. ('Lemuria') of Canada to conduct a due diligence on its Monchetundra PGM project until January 15, 2017. The purpose of the due diligence is to consider the potential financing of some of the project by Lemuria using a royalty structure.
As announced on 3 November 2016, Eurasia entered into talks with an international engineering company to manage the mining operation at the Monchetundra project, and to work for the company as the owner's representative throughout the design and build phase of the Sinosteel EPC agreement and thereafter during the operation of the mine. The directors believe a financing structure with Lemuria would put Eurasia in a safer position and would be a natural hedge for the project risks, although at this stage there can be no guarantee that any transaction will proceed.
The EPC contract was more specifically described in the announcement of 10 October 2016. This contract is on a turn-key basis, with financing and delivery of first production guaranteed. While a loan of 85% of the estimated project cost is covered by a Sinosteel loan facility that will sit on Sinosteel's balance sheet until the project is up and running, a balance of US$26 million is required for completion of the project.
Due diligence work is commencing immediately and both Eurasia and TGK staff will assist Lemuria in their assessment of the project. Further updates will be provided in due course.
Christian Schaffalitzky, Managing Director commented: "We are excited by this opportunity to further reduce the risk on the development of the Monchetundra project. The royalty structure works by providing capital upfront to advance the development and is repaid from the mine revenue streams. This is another option being considered in seeking the best way forward for Eurasia."
Enquiries:
Eurasia Mining Plc
Christian Schaffalitzky/Michael de Villiers
+44 (0)207 932 0418
WH Ireland Limited
Katy Mitchell/Nick Prowting
+44 (0)161 832 2174
Beaufort Securities
Elliot Hance
+44 (0)207 382 8300