Eurasia, the palladium, platinum, rhodium, iridium and gold mining company, today reports its unaudited interim results and operational summary for the six months ended 30 June 2023.
A copy of this announcement is also available on Eurasia’s website at:
https://www.eurasiamining.co.uk/investors/news-announcements
Chairman’s Statement
Dear Shareholder
The first six months of 2023 saw the Company focused principally on our plan to sell our Russian assets.
Proposed sale of Russian assets
We have concentrated on this effort since 2020 and can report that we continue to make progress. Our focus on BRICS non-sanctioned counterparties continues, with several parties currently at various stages of their due diligence. Although, as stated previously, there is no guarantee of a positive outcome to this activity, the Board remains focused on achieving a successful conclusion.
West Kytlim
Site preparation work was completed during the first quarter of 2023, but due to the sale process being Eurasia’s main priority, no metal concentrate has been produced at West Kytlim since the end of 2022.
Our key focus at West Kytlim has been on the sale of 2022 concentrate, which is currently held in inventory, with no restrictions related to its sale as a precious metals bearing high grade concentrate. The Board expects the concentrates to be sold at carrying value and we are currently evaluating offers from three parties who responded to the tender process.
We have started to receive value-added tax refunds (VAT) against capital expenditure in previous years, which also contributes to our cash position (see below), in addition to the proposed concentrate sale.
Monchetundra
The Definitive Feasibility Study (‘DFS’) at Monchetundra was approved by the authorities in late June 2023. This allows Eurasia to present this development and the resulting improvement in value to potential purchasers. The Company does not believe it is appropriate to commence construction immediately, as it is expected that any counterparties to the proposed asset sale may have their own plans for the development of Monchetundra and can either proceed with the EPCF contract signed with Sinosteel, or with a different contractor.
Financial position
The Company’s current cash assets at 30 June 2023 including cash held in bank accounts (£0.4 million) and US treasury notes (£1.54 million) totalled £1.94 million. The value of unsold concentrate within Inventories at 30 June 2023 was approximately £3.5 million. In addition, the Company expects to receive VAT refunds of circa £1.5 million.
The Company’s cash reserves are held in USD and GBP accounts outside of Russia and therefore not directly or indirectly exposed to Rouble foreign exchange gains or losses against other major hard currencies.
Sanctions
The Board continues to maintain a regular dialogue with the Company’s legal advisers regarding the potential impact of any US, UK or EU sanctions on the Company, its operations and assets. The Company remains satisfied that its current operations are not prohibited under US, UK or EU sanctions rules. Furthermore, the Group does not engage and has not engaged with any sanctioned persons, entities or agencies. 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.
Management changes
Following the retirement of James Nieuwenhuys as CEO, the Company has established an Operations Committee, led by Christian Schaffalitzky, which oversees the day-to-day project development activities of the Company, alongside the proposed sale process on which the full Board is engaged. Eurasia does not intend to make any further management appointments at this stage.
Litigation
The previously announced litigation case between the Company and Queeld Investments Limited and Mispare Limited, and Eurasia remains ongoing. Further developments regarding this case will be announced as appropriate. The previously announced case filed by Logik Developments Ltd was settled in July 2023.
Outlook
We recognise that, in relation to the potential asset sale, it may be a source of frustration for shareholders that we cannot report on specific counterparties, the nature of our discussions, and the ongoing processes in more detail. This reflects the regulatory regime and the many confidentiality agreements that govern this activity. However, although there can be no guarantees, all the Eurasia Board members are engaged in contributing towards a successful outcome to this process, and we look forward to providing our shareholders with further updates as appropriate.
We again thank our shareholders for their continued support.
Christian Schaffalitzky
Chairman
Eurasia Mining PLC
