Eurasia Mining PLC (EUA.L) General Update and Institutional Placing at 22.5p

Eurasia Mining plc, the palladium, platinum, rhodium, iridium and gold producing company, operating the established West Kytlim Mine in the Urals, and also the operator of the Monchetundra Project comprising two predominantly palladium open pit deposits located 3km away from Severonickel.

The Life Of A Chart: The rise and rise of Eurasia Mining

One of Norilsk Nickel’s largest base metals and PGM processing facilities, near the town of Monchegorsk on the Kola Peninsula, is pleased to provide a general update and announce the successful completion of a US$10m equity placing (the “Placing”) with institutional investors at a price of 22.5p per share, which is equal to the closing price on 17 August 2020.

The net proceeds from the Placing, which was undertaken by the Company’s Joint Broker Optiva Securities, will be used towards scaling up the production of West Kytlim, as announced in the Company’s Annual Report dated 1 July 2020.

33,927,057 new ordinary shares (the “Placing Shares”) will be issued pursuant to the Placing, representing 1.23 per cent of the Company’s fully diluted share capital of 2,758,701,681 ordinary shares, as enlarged by the Placing.

Following the completion of the Placing the Company will have cash of approximately US$$10.5m. If required, the Company also has access to the previously announced US$1m credit line which is provided by way of a loan agreement between Eurasia and Hamomelia Services Limited, a company owned and controlled by Dmitry Suschov, a director of Eurasia.

West Kytlim update

· Production is ongoing at site and unaffected by Covid-19 with payments for metal already received

The Company produces PGM (palladium, platinum, rhodium, iridium) and gold at the West Kytlim Mine on an owner operator basis, having decided recently to acquire full control of the operation. The project was brought to commercial scale production initially with the use of mining contractors in the 2018 and 2019 mining seasons. Using contractors allowed the project to be brought into production with minimal shareholder dilution and no debt financing, thereby maximising value for the Company’s shareholders. Following two mining seasons, during which Eurasia’s own key staff gained further mining and operational experience, a decision was taken to acquire full control of the operation. The Company had maintained personnel at site throughout for 30% of the revenue from the mine, with roles in exploration and infill drilling, geological control, mine engineering as well as being responsible for the final upgrade of the PGM concentrate at an onsite laboratory. As announced on 26 November 2019, after taking over the mining function from the contractors, Eurasia now retains 100% of the revenue from West Kytlim.

2020 Mining season

A fleet of new equipment and machinery was delivered to site during 2020, tailored to workflows. Covid-19 related safety measures were introduced early on, including longer work rosters to reduce travel, social distancing at meal-times and in accommodation, Covid-specific personal protective equipment, awareness interviews and medical screening. Mining and production are ongoing at site according to the mine plan with no adverse impact expected from the pandemic. Deliveries of PGM concentrate to the refinery are also ongoing and the payments are received on schedule and reinvested into West Kytlim.

Permitting and Licensing

· A Definitive Feasibility Study (DFS) to encompass all resources at all the sites of the production license was commissioned with GeoInvestProject (GIP) and is on track for approvals this year.

A decisive course of action was taken by the Company after the experience of using contractors.

As announced in the Company’s Annual Report of 1 July 2020, a Definitive Feasibility Study by GIP for all resources on the West Kytlim Mine Permit was commissioned and is being progressed through the approvals process. Following consultation with the State Reserves Committee experts and consultants, it was agreed that mining data generated from several seasons of mining operations, combined with the Company’s in-house resource database, are sufficient to warrant approval of the DFS encompassing all resources to the mineable category within all the sites of the production license. This removes a significant annual permitting hurdle and is also a cost and time saving development, as no further drilling is required to approve shovel-ready resources on an annual and site-specific basis. This in turn allows more open pit sites to be mined concurrently to increase the production volumes. The DFS is to be submitted for review and the final approval is expected before the end of 2020, in advance of the 2021 mining season.

The above timeline has been recommended by GIP and by the relevant permitting authorities in Russia.

Monchetundra update

· The Flanks application advanced through all federal bodies including FSB and Ministry of Defence and is awaiting license issuance.

· Extensive prior drilling campaigns with c.48,000m drilled at NKT, a part of the Flanks application.

The Monchetundra Project is Eurasia’s flagship world class PGM project and comprises two open pittable deposits near the town of Monchegorsk on the Kola Peninsula, Northwest Russia. A production permit was received in November 2018. A Detailed Project Design Report was developed by Central Kola Expedition (Eurasia’s contractor that works with Norilsk Nickel, SeverGroup, Fosagro, Rusal and other mining majors on the Kola Peninsula) and approved by the Ministry of Natural Resource’s regional branch in October 2019, while an engineering, procurement, construction and finance (“EPCF”) agreement is in place with Sinosteel for the turn key launch of production and providing for full financing of Monchetundra (as per the Company’s announcement of 4 December 2019).

In addition to developing the currently approved open pittable resources, the Company has utilised its exclusive right to apply for further licenses adjacent to its mining rights. Russian Federal law states that a licence application is uncontested in an area within 5km radius of the approved resource. Monchetundra contains two identified ore bodies (West Nittis and Loipishnune) separated by 2km. Both ore bodies are known to be open on strike and beyond the current mining concession. Furthermore, the immediate vicinity of the project is known to contain type examples of the majority of the layered intrusion- and contact-hosted PGM deposit types recognised globally. An application for a license surrounding Monchetundra referred to as the Flanks was optimised based on data supplied by the State Cadastre of Mines and the Company’s in-house proprietary data set, and submitted in September 2019. The application has been approved by all federal bodies including FSB and Ministry of Defence and awaits license issuance.

A further area to the north and east of West Nittis known as NKT is a standout part of the Flanks. Between 1996 and 2001 an extensive drilling programme was carried out creating a valuable catalogue of drilling data now available to Eurasia. Our predecessors also developed targets in the NKT area, and areas to the east of the Loipishnune deposit, and these work programmes in 2015-2017 resulted in pre-feasibility studies lodged with the State Cadastre of Mines in Russia.

Christian Schaffalitzky, Executive Chairman commented: “The Directors are delighted at the advances made at both of our world class projects in 2020 and at the progress with receiving our predecessors’ data, including an extensive 48,405m drilling campaign completed at NKT, a part of the Flanks area. We are also encouraged that institutional investors are investing at the market price. This fact, together with our production expansion plans and the progress on our license applications, strengthen our position in the Formal Sale Process that we are focused on now”.

Application for Admission & Total Voting Rights

The Placing Shares will rank pari passu in all respects with the existing ordinary shares of 0.1p each in the capital of the Company. Application will be made to the London Stock Exchange for the Placing Shares to be admitted to trading on AIM (‘Admission’). It is expected that Admission will become effective on or around 31 August2020.

As a result of the issue of the Placing Shares as described above, the issued share capital of the Company, with voting rights, will consist of 2,758,701,681 ordinary shares of 0.1p each. As the Company does not hold any shares in Treasury, this figure may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the share capital of the Company under the Disclosure and Transparency rules.

Market Abuse Regulation (MAR) Disclosure

Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement. In addition, market soundings (as defined in MAR) were taken in respect of the matters contained in this announcement, with the result that certain persons became aware of inside information (as defined in MAR), as permitted by MAR. This inside information is set out in this announcement. Therefore, those persons that received inside information in a market sounding are no longer in possession of such inside information relating to the company and its securities.

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