Eurasia Mining PLC (EUA.L) Monchetundra DFS progress closer to defining the mineral content

The company notes the movement in the Company’s share price yesterday and notes that the share price remains below the 26.5p price at which the $20m private placement, assisted by H.C.

Significant developments have been made at our operating West Kytlim mine, the world’s largest alluvial PGM mine, with 3 washing plants launched to production and several open-pit areas being stripped including one at Kluchiki and two at Bolshaya Sosnovka as opposed to one area and one plant in previous years – single asset risk is therefore eliminated at West Kytlim.

Electricity grid connection and electric dragline are on track to be commissioned as announced via RNS on 11 August 2021 to further reduce the mine’s carbon footprint, improve Eurasia’s ESG credentials and reduce the cost of production that is already in the lowest quartile of the global PGM cost curve.

Monchetundra geochem successfully completed

Eurasia Mining (EUA.L), confirms Monchetundra geochem was successfully completed by Norilsk Nickel’s engineering arm Gipronickel. Wardell Armstrong Intnl site visits and audit of Moncheturndra drill core results held at Central Kola Expedition (CKE) warehouse completed. EMR, known for cross-referencing Russian mineral reserves data with international JORC standard is coordinating Monchetundra DFS. EUA expects CKE’s Monchetundra detailed mining plan in the next few weeks. CKE clients include Norilsk, Anglo American Platinum and Barrick. This list of top tier companies including advisors UBS and lawyers DLA Piper de-risk our Monchetundra valuation.

EUA operations plan delayed 12 to 24 months due to 7m suspension and Formal Sale Process

2020-2023E

Rh production excluded from valuation for all but West Kytlim;

License granted 15 Moz Flanks by Sevzapnedra, reducing flanks risk;

Pd supply constrained;

PGM prices significantly exceed our valuation assumptions.

Christian Schaffalitzky, Executive Chairman of Eurasia commented: 1st September 2021 ” The Directors are delighted that our hard work on Kola that started as a joint venture with Anglo American Platinum in 2005 and is finishing as a joint venture with Rosgeo, a much stronger partner for doing business in Russia, is coming to a successful conclusion with DFS, JORC reserves as well as the EPCF (engineering, procurement, construction and finance) contract already signed. The Board is committed to execute on the strategy as announced on 12 May 2021″.

 

Research Notes

 

Eurasia Mining valuation catalysts

  • Sale of Monchetundra mine;
  • Development of Monchetundra flanks licence;
  • Successful installation of additional wash plants at West Kytlim to raise production volumes;
  • Increase in petrol cars vs. diesel;
  • Covid-19 accelerated policy drivers for the adoption of hydrogen and related clean fuel technologies (Pd if bound to Ag can replace Pt as a catalyst – this is competitive due to the relatively low price of Ag);
  • Increase in uses of palladium through technological innovation.

PGM Market Outlook Remains Strong

The Platinum Group Metals refers to six metals – ruthenium, rhodium, palladium, osmium, iridium, and platinum. Of these, the two most important are palladium and platinum. EUA focuses on the mining of these two metals.

Despite the Covid-19 driven correction (and V-shaped recovery) in Pd prices the underlying upward price drivers remain very largely unabated in a supply deficit market. We believe the Pd supply constraint, and rising demand in what is an inelastic largely non-substitutable good, is further sheltered by its tiny % contribution to overall auto costs. These characteristics of the Pd market leave head room for far higher prices than seen prior to the recent and ongoing pandemic.

EUA sum of the parts valuation £2.1bn operations contributions – it is still all about Monchetundra

(Yet to include Rosgeo JV, Iridium resource from projects or Monchetundra Lo+Wn+Flanks Rhodium resource, PGM price assumptions highly conservative vs. 2021 average and current spot prices)

1) Potential resources within the existing company licence and the flanks application of ~15 million oz.

2) Potential resources occurring within 5km of the Monchetundra mining license and areas neighbouring the company’s deposits of ~4 million oz.

3) Potential resources within the wider Monchegorsk district in which the Monchetundra license is located of ~21 million oz.

To see the latest Eurasia Mining press releases visit their website.

ACF Equity Research LTD (FRN 607274) is an Appointed Representative of City & Merchant Limited (FRN 154182) which is authorised and regulated by the Financial Conduct Authority. | Copyright © 2020 ACF Equity Research.


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