Interim Results for the six months ended 30 June 2022
- *West Kytlim operations commenced on schedule with three wash plants up and running following the winter prestripping season.
- Works on connecting the site to the grid continued including the installation of an electric draggling and a power line to site progressing through the summer months.
- A total of 434,000m3 PGM bearing gravels were processed at the site through to 31 August 2022.
- Production increased to 167kg raw platinum (FY21: 113kg) reflecting higher processed volumes with the material shipped to a secure location in Ekaterinburg for later refining.
- The team decided to stockpile the concentrate given strong cash position in anticipation of stronger realisable prices in the market.
- The Company estimated that 167kg PGM concentrate has a net realisable value of c.£3m (platinum only).
- Exploration drilling along with geological mapping, soil and stream sediment sampling carried at the adjacent 24.5km2 potentially extending life of mine at West Kytlim.
- The DFS work for the Monchetundra open pits at West Nittis and Loipishnune is well advanced and on schedule for completion and subsequent submission to local authorities before YE.
- M&A discussions regarding a potential sale of Russian assets are ongoing and carried predominantly with Russian, Indian and Chinese non-sanctioned counterparties.
- To date there has been no significant impact on the Group’s activities as a result of the ongoing updates to the UK and EU sanctions legislation.
- Financially, PAT amounted to £3.9m (H1/21: -£1.5m) reflecting revaluation of assets and liabilities with an appreciation in the RUB leading to a net gain of £6.1m in H1/22.
- Admin costs contained at £1.3m (H1/21: £1.2m).
- Sales totalled £0.1m (H1/21: £0.4m) reflecting lower volumes.
- FCF was -£7.1m (H1/21: -£2.5m) reflecting higher charge for working capital amid an increase in unsold inventories as well as higher capex during the period.
- Closing cash balance stood at £13.6m with £0.7m in debt and lease liabilities (Dec/21: £22.0m and £0.5m).
Eurasia, the palladium, platinum, rhodium, iridium and gold producing company, today reports its unaudited interim results and operational summary for the six months ended 30 June 2022.
The first half of 2022 has seen significant progress at our West Kytlim mine, as described in the Operations Update below. Eurasia’s plan to install grid power to site to reduce the carbon output associated with overburden stripping, while also reducing operational expenditure and improving efficiency, is advancing well and our electric dragline, which is currently being assembled, is aimed to significantly improve the stripping programme this coming winter.
At Monchetundra the ongoing DFS study for the Loipishnune and West Nittis open pits represents an important reporting milestone for the project’s development and is on schedule for submission before the end of 2022.
Since February the conflict in Ukraine has affected all international commerce to some extent. The effect on our operations, including funding group subsidiary companies has been minimal to date. We took the decision to stockpile ore from West Kytlim at the beginning of the mining season due to our strong cash position, volatility in the market currently, and in anticipation of higher realisable sales revenue in the future. As such, despite producing 167 kg of PGM concentrate (113kg for full year 2021), we have made no commercial sales of platinum in the period, instead opting to retain this PGM concentrate, which has a net realisable value of c.£3 million for refining at a later date. The value ascribed to this concentrate is for the platinum content only and does not include any other PGMs or gold.
Our cash balance remains robust, with more than £3 million and US$6.6 million at the time of writing in the Group’s sterling and US$ denominated bank accounts respectively. Due to volatility in exchange rates in funding subsidiaries through inter-company loans, a net gain of £6.1 million was reported for the period. The Company’s cash reserves are held in USD and GBP accounts outside of Russia and therefore not directly exposed to Ruble foreign exchange gains or losses against other major hard currencies.
Following the Company’s Annual Results announcement of 29 June 2022, Eurasia’s directors have maintained a regular dialogue with the Company’s legal advisers regarding the potential impact of any UK or EU sanctions. The Company remains satisfied that neither of its current activities at the West Kytlim Mine or on the Kola Peninsula are prohibited under UK or EU sanctions rules. Furthermore, the Group does not engage and has not engaged with any sanctioned persons, entities or agencies.
To date there has been no significant impact on the Group’s activities as a result of the ongoing updates to the UK and EU sanctions legislation. Sanctions introduced by the Russian Federal government have also not affected the Group. The Group continues to closely monitor all regulatory requirements and changes to the laws, rules and regulations, taking steps whenever necessary to ensure compliance with new legislation.
With regards to the proposed sale of our Russian assets, as previously announced, our M&A team is focusing on BRICS counterparties, and discussions are ongoing with predominantly Russian, Indian and Chinese non-sanctioned counterparties. Whereas progress has been made with certain parties, at present there can be no guarantee that the Company will enter into a legally binding sale and purchase agreement with any of the interested parties. We expect potential buyers to remain anonymous until the Company is in a position to execute a legally binding agreement and further updates regarding the sale process will be made as appropriate.
In terms of the future development of Eurasia Mining PLC, we continue to look at expanding the business in various ways, including the development of hydrogen projects internationally coupled with new mining opportunities in investment friendly jurisdictions. The Company is also committed to the continued development of Monchetundra as well as NKT (Eurasia’s project, a Tier-1 scale Nickel mine formerly operated by Norilsk Nickel) and continuing to mine at West Kytlim.
The Company’s Board has decades of experience in mineral project identification and the management of complex engineering projects during the development phase, such as the three pits at West Kytlim (Malaya Sosnovka, Klyuchiki and Bolshaya Sosnovka) which were successfully brought into production by Eurasia’s technical team. James Nieuwenhuys, our CEO launched a number of mines, including as COO of Polyus (the world’s largest gold company in terms of reserves and resources) as well as Managing Director of SNC-Lavalin and Bateman (large EPC companies).
We again thank our shareholders for their continued support.
Chairman of Eurasia Mining Plc
James Nieuwenhuys, Chief Executive Officer of the Company, commented;
“We continue to advance our plans at both operations in the Urals and Kola Peninsula, adding value to both projects while pursuing a potential sale of assets as previously announced. Despite significant geopolitical tensions the operating environment within Russia itself has not changed materially with respect to our operations there. The Board will take a view on the best opportunity to refine to saleable metals at a later date, meanwhile production is ongoing at the time of writing, and we look forward to updating on our electric power and dragline projects, both expected to contribute to the winter 2022/23 stripping programme.”
Consent for release
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 purposes of the reporting of these results.
For further information, please contact:
Eurasia Mining Plc
Christian Schaffalitzky/ Keith Byrne
*SP Angel act as Nomad and Broker to Eurasia Mining