Eurasia Mining PLC Procurement, Construction & Commissioning contract (1487M)
11 October 2016 - 12:50AM
UK Regulatory
TIDMEUA
RNS Number : 1487M
Eurasia Mining PLC
10 October 2016
Eurasia Mining plc (AIM: EUA)
("Eurasia" or the "Company")
Engineering Procurement, Construction and Commissioning
contract
Eurasia Mining (LON:EUA), the London Stock Exchange AIM listed
PGM and gold mining company, is pleased to announce that an
Engineering Procurement, Construction and Commissioning ("EPC")
turnkey contract has been signed in relation to its Monchetundra
project in the Kola peninsula in northwest Russia bordering
Finland, between Eurasia's 80% subsidiary, Closed Joint Stock
Company "Terskaya Gornaya Kompaniya" ('TGK') which holds the
Monchetundra licence and Sinosteel, a Chinese state owned group
operating primarily in mining, trading, equipment manufacturing and
engineering.
The contract is for the development of two platinum group metal
('PGM') deposits located in the Company's Monchetundra licence
area, which also contain gold, copper, cobalt and nickel.
Feasibility studies are currently underway on two deposits,
Loipishnune and West Nittis, to be completed by year-end. Together
with the EPC contract, this will be the culmination of the
Company's work since the licence was acquired in 2006. The contract
provides for engineering, procurement and construction of a 1.7
million tonnes per annum PGM beneficiation project at
Monchetundra.
Sinosteel's engineering and construction arm is Sinosteel
Equipment & Engineering Co. Ltd. Sinosteel is a major mining
company and the second largest importer of iron ore in China. It is
one of the largest global EPC contractors with a track record of
successfully commissioning similar projects in Australia, Africa,
China and Latin America.
The proposed contract would provide for Sinosteel to undertake
mine and processing plant turnkey construction and commissioning on
a commercial arms-length basis. The debt-based finance for the EPC
turnkey contract is to be arranged by Sinosteel and is an integral
part of the EPC turnkey contract. This EPC contract is being
advanced as part of discussions with third parties for the sale or
joint venture of the project.
Sinosteel's contract is based on a 2 year due diligence and
evaluation of the Monchetundra project. The principal terms of the
financing are:
-- The contract value totals US$176,000,000 with the loan covering 85% of the contract value.
-- Within the contract, a subcontract for $50,000,000 million is
assigned to TGK to cover all preparatory engineering and pre-strip
works on the two open pit deposits. TGK expects that this
subcontract will be sufficient to meet the 15% equity contribution
required for the project.
-- Sinosteel will be responsible for the debt finance of
$149,600,000 (i.e. 85% of the contract value) with the financing
terms included in the EPC contract as a 10-year loan with early
repayment permitted, at an indicative interest floating rate at 6
month LIBOR plus 3.5%.
-- Sinosteel will carry the loan on its balance sheet with its
rights and obligations under the financing and the loan will only
be assigned to TGK following completion of the EPC contract,
subject to key performance indicators to be achieved by the plant
commissioned by Sinosteel.
-- The contract is exclusive to Sinosteel for a period of ten years.
-- The contract provides for a schedule of payments commencing
within 36 months. This period is to allow for the obligatory steps
within the Russian mine permitting system.
The contract is conditional on, amongst other things, the
Company receiving all the necessary permits from the government and
therefore at this stage there is no guarantee that the transaction
will complete. Further updates will be provided in due course.
Christian Schaffalitzky Managing Director of Eurasia Mining said
"We have always considered Monchetundra to be an attractive project
and the recent expressions of interest, including the concept of an
outright proposal to acquire the project, and the desire to secure
an EPC contract in relation to Monchetundra, clearly demonstrates
that our judgment was well founded.
This contract with one of the world largest EPC contractors
provides the framework for the construction of a processing plant
designed to treat ore from two open pits in the Monchetundra
licence area. Meanwhile our other business continues to progress;
at West Kytlim, deliveries to the refinery are continuing and
payment amounts for the first batch of concentrate have been
agreed, while at the Semenovsky gold project, our metallurgical
testing program is nearing completion. We will provide separate
updates on these projects in due course."
Ends
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
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCGGGBCUUPQGWU
(END) Dow Jones Newswires
October 10, 2016 09:50 ET (13:50 GMT)
Eurasia Mining (LSE:EUA)
Historical Stock Chart
From Apr 2024 to May 2024
Eurasia Mining (LSE:EUA)
Historical Stock Chart
From May 2023 to May 2024