Eurasia Mining Shares (EUA) Consolidating As Company Releases NKT Update

Eurasia Mining shares (LON:EUA) have been consolidating above the 4.00p level in recent months, after an early year rally saw the price hit as high as 7.69p before pulling back. A 13% decline in the share price over the past month leaves the stock 90% higher than where it began the year, although with a market cap of £125million, this will not be one for the faint of heart.

The company, a miner specializing in platinum group metals (PGM) and gold, has announced a two-year extension to its NKT licence. The NKT project, adjacent to Eurasia’s Monchetundra mine, is a restart of a formerly producing mine with substantial nickel, copper, PGM, and gold resources.

The NKT mine is classified as a Tier-1 asset, indicating a large-scale, long-life, and low-cost operation. A 2021 Competent Person Report (CPR) by Wardell Armstrong International (WAI) confirmed the presence of 305Kt of Nickel, 143Kt of Copper, and 57 tons of PGMs and Gold. WAI estimates a Net Present Value (NPV) of US$1.2-1.7 billion and an Internal Rate of Return (IRR) of 37-47% for the room and pillar mining portion of the NKT project.

Given NKT's prior operational status, the existing infrastructure significantly reduces the capital expenditure (CAPEX) and the time required to resume production. In contrast to greenfield projects, which can take upwards of 30 years to launch, restarting production at NKT could potentially take only 1-2 years. The mine's location in the Arctic further enhances its competitive edge, as the existing infrastructure mitigates the typically high infrastructure development costs associated with Arctic mining projects.

Nickel constitutes approximately 50% of the metal basket value at NKT, based on a Net Smelter Royalty (NSR) basis. The nickel is in sulphide form, which facilitates extraction through simple flotation, a process confirmed by tests conducted by Gipronickel (Norilsk Nickel's engineering arm) and previous production at NKT. This offers a low CAPEX solution compared to laterite nickel projects.

Since the CPR by WAI, Eurasia's Arctic subsidiary, TMC, has conducted additional drilling, totaling 16,417 meters, and tested 9,224 samples. These tests, performed by SGS and Alex Stewart International, aim to upgrade the resource classification to reserves under the JORC Code and Russian standards, paving the way for a production permit.

Christian Schaffalitzky, the Executive Chairman commented: “The Directors are pleased that compliance with the licence agreement has resulted in the 2-year extension of the licence for our company making Tier-1 scale NKT asset. This allows both the maintenance of the licence and the reserves upgrade to achieve our Russia exit strategy.”

The extension of the NKT license and the progress towards upgrading resources to reserves represent key milestones for Eurasia Mining. The potential for a near-term Arctic asset sale or production restart could offer significant value to shareholders.